LaSalle Partners announced Wednesday that it has acquired Columbus, Ohio-based Galbreath Co. in a deal that will give LaSalle a solid lead as the country’s biggest office building property manager.
The stock transaction, whose financial terms were not disclosed, gives Chicago-based LaSalle’s management services business a portfolio of more than 140 million square feet of office space and more than 200 million square feet of combined office, industrial and retail space.
“We are now clearly the largest office building manager in the country,” said Robert Spoerri, chief operating officer of LaSalle Partners, a top global real estate services and investment firm with 21 offices in the U.S. and abroad.
Tops in terms of overall commercial space is the combined operation of CB Commercial Real Estate Services Group Inc. and Koll Real Estate Services, who agreed to join forces in a $137 million stock transaction just over a month ago. Together, they manage a total of 300 million square feet.
Spoerri said LaSalle and Galbreath have been talking about a merger for several months, and both recognized the industry trend toward consolidation. Galbreath is the 15th-largest property management services firm in the U.S.
“There are significant advantages in size and scale and market coverage,” Spoerri said. “This is being driven largely by clients who like to deal with fewer real estate companies.”
Another force driving consolidation is the high cost of new technology and technological training for employees, Spoerri said. Technology also enables LaSalle to absorb new portfolios into its management systems quickly, he added.
Galbreath, which was founded in 1921, brings property in 33 cities including Columbus, Pittsburgh and Philadelphia, where LaSalle has had few management contracts. Both have sizable operations in Chicago, New York, San Francisco, Los Angeles and Washington.
Lizanne Galbreath, chairman and chief executive officer of Galbreath, will become a LaSalle board member and major shareholder of the combined company, which will be headquartered in Chicago and retain the LaSalle Partners name. She will also be chairman of the management services group, LaSalle’s biggest division.
In addition, she will be CEO of LaSalle Galbreath Development Inc., which will focus on opportunities for new construction, one of Galbreath’s historic strengths.
“We’ll be able to be a much more substantial player in the re-emerging development market,” Spoerri said.
Office space demand has picked up to the point where corporations and investors are interested in development of new properties, he added. That business had been almost dormant in the 1990s until last year.
