Team #54 | Marketing 361 | Spring 2018

Meaghan Jasman
Zack Jones
Danny Lazzerini
Angel Santiago
Adam Surico
Mackenzie Toth
 CBRE Group Inc. is the global market leader in commercial real estate services and

investments. With over 80,000 employees and revenues of $14.2 billion as of 2017, CBRE has

established itself as the dominant power in its field. The industry of real estate asset management

and consulting has many key drivers including rising home prices as well as the general demand

for buildings and contracting (CBRE group inc, 2017). Three main challenges for CBRE are

skilled labor shortages, cost escalation, and economic uncertainty. Due to high employee

expectations, finding the right skilled workers in today’s workforce is a challenge. The new

generation of workers has unique needs that businesses like CBRE must adapt to. Cost escalation

is another key factor for CBRE. Consistent changing prices can make it difficult for companies

in this industry. Lastly, economic uncertainty provides an unpredictable cash flow for the

company, forcing an evolving and eccentric business strategy (Groch, 2015).

SWOTT Analysis

STRENGTHS
●   Listed as a Fortune 500 company, as
well as highest among other
commercial real estate firms
●   Strong brand equity
●   Robust and diversified clients
●   Strong & quality workforce and
management of approx. 35,000 people
(Financial Comparison, 2017)
WEAKNESSES
●   Depend largely on US economy
●   Global market depends on the
investment in the local market
●   Environmental regulations are a
concern
●   Limited Liquidity Position
(CBRE Q1, 2008)

OPPORTUNITIES THREATS
●   Acquisition for stronger market ●   Volatile global financial markets
presence ●   Credit market crisis
●   New market contract ●   Foreign currency fluctuations
●   Expansion globally into emerging ●   Immense competition
economies ●   Highly cyclical and highly correlated
●   Positive outlooks for global to the macroeconomic state
construction industry ●   Tighter economics policy
(CBRE N. American Cap Rate, 2017)
 TRENDS
●   A current downward trend is at a crossroads and is close to its end.
●   Absorption was subdued, as hyper-scale digested last year’s enormous leasing volume.
●   National pricing standardization of rental rates continues to emerge, where price
variability is dictated more by the need and type of requirement versus geography or
market location.
●   Higher tolerance for data center development as providers become more comfortable
with the strength of their sales pipeline and the transparence of user expansion goals.
(CBRE Q1, 2008)

Competition & Unique Selling Proposition

Being one of the largest commercial real estate firms, CBRE focuses on real estate

investment management, capital markets (equity and debt) solutions, property/agency leasing,

property sales, valuation, development services and proprietary research. Compared to CBRE’s

largest competitors (Jones Lang LaSalle (JLL), Kennedy - Wilson holdings, HFF, and E House

holdings), the firm’s unique business approach and strategy earn its dominance in the industry.

CBRE particularly prides their work with nonprofit organizations in boosting their global

superiority (Groch, 2015).

Target Markets

Rather than classifying markets into primary, secondary, and tertiary markets, CBRE

classifies their target markets into an unique and company-specific, yet arguably similar Tier

system — comprised of Tier 1, 2, and 3.

Due to CBRE immense size, the company splits its markets into three metro tiers. In

order to divide the markets into these tiers, the company follows four criterion to form a

statistical basis: historical property investment, size of the real estate market (inventory),

population size, and economy size. The weights, or “scores,” from each criterion add up to a

combined weighted average rank. The tiers (split roughly at 20% Tier 1, 20% Tier 2, and 60%
Tier 3) typically all share similarities in market capitalization rates (Rice, 2016). Furthermore,

within the three tiers, each market splits its focus between office, industrial, retail, multifamily,

and hotel divisions (refer to Figures 1 and 2) (Rice, 2016).

Overview

As the world leader of real estate services and investments, CBRE has layers of

responsibility for each of its services. Ranked 214th on the Forbes 500 list, it has proven itself to

be the top market leader in the global real estate industry (CBRE group inc, 2017).

As shown by the SWOTT analysis, CBRE relies mostly on its size and reputation for its

core strengths. Its opportunities are focused on growing even more as a global presence. Its

weaknesses are based off its dependence on U.S. local investment and Limited Liquidity

Position. Its threats are caused by the volatile and highly cyclical financial markets. CBRE’s

trends often fluctuate due to standardization of pricing in services rather than geography or

market location.

What sets CBRE apart from other competitors is its unique omnipresence, an extremely

rare attribute in the commercial real estate realm. This makes it convenient for all of its clients to

be able to exchange information and capital. Another major selling point is its extensive

proposition for non-profit firms.

To simplify its markets, CBRE’s divides its markets into tiers (20/20/60 based on market

capitalization rates) based on four criterion. Within each tier, CBRE splits its focus between the

divisions of office, industrial, retail, hotel, and multifamily services.

References

CBRE group, inc. : Company profile and SWOT analysis. (2017). (). London: Progressive Media
Group. Retrieved from http://ezproxy.library.arizona.edu/login?url=https://search-
proquest-com.ezproxy2.library.arizona.edu/docview/1861643415?accountid=8360

CBRE group SWOT analysis, USP & competitors. (n.d.). Retrieved February 11, 2018, from
https://www.mbaskool.com/brandguide/real-estate-and-construction/3050-cbre-
group.html

CBRE North American Cap Rate Survey (2017). Retrieved from:

http://cbre.vo.llnwd.net/grgservices/secure/Cap%20Rate%20Survey_H1%202017.pdf?e=
1518380718&h=2a65345751a71b937871c84b986beb0f

CBRE Q1 industrial trend: Leases down; sales up. (2008). Real Estate Weekly, 54(37), 30.
Retrieved from
http://bi.galegroup.com.ezproxy4.library.arizona.edu/essentials/article/GALE%7CA1793
17339?u=uarizona_main&sid=summon

Financial comparison: CBRE group (CBG) vs. the competition (2017). Chatham: Newstex.
Retrieved from http://ezproxy.library.arizona.edu/login?url=https://search-proquest-
com.ezproxy4.library.arizona.edu/docview/1940570929?accountid=8360

Groch, Jim (2015). CFO and global director, corporate development, CBRE group inc . San
Francisco: Boardroom Insiders, Inc. Retrieved from
http://ezproxy.library.arizona.edu/login?url=https://search-proquest-
com.ezproxy4.library.arizona.edu/docview/1754295137?accountid=8360

Rice, J. (2016). Primary, Secondary Markets...Definitions as Clear as Mud. Retrieved from

http://www.cbrecapitalwatch.com/?p=1655
Attachments

Figure 1. CBRE (2017). CBRE North American Cap Rate Survey (Report H2 2017). Retrieved from:
http://cbre.vo.llnwd.net/grgservices/secure/Cap%20Rate%20Survey_H1%202017.pdf?e=1518380718&h=2a65345751a71b937871c84b986beb0f

Figure 2. Russell, Lynne (2016). CBRE & people analytics – delivering what the business needs. Retrieved from:
https://www.peopleinsight.com/blog/people-analytics-delivering-what-business-needs