Johnson Controls Sells Outsourcing Division To CBRE

Together, CBRE and GWS will manage nearly five billion square feet of real estate and corporate facilities globally.


https://facilityexecutive.com/2015/04/cbre-group-to-purchase-global-workplace-solutions-unit-of-johnson-controls/
Together, CBRE and GWS will manage nearly five billion square feet of real estate and corporate facilities globally.
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CBRE Group To Purchase Global WorkPlace Solutions Unit Of Johnson Controls

Johnson Controls Sells Outsourcing Division To CBRE

Posted by Heidi SchwartzFM Alert new logo.

CBRE Group, Inc. has announced it has entered into a definitive agreement to acquire the Global WorkPlace Solutions (GWS) business of Johnson Controls, Inc. GWS is a provider of Integrated Facilities Management solutions for major occupiers of commercial real estate and has significant operations around the world. Johnson Controls announced its intention to sell the unit in October 2014.

GWS will operate as part of CBRE’s Global Corporate Services (GCS) business, which has increased revenue over the last decade, as more corporations and other institutions outsource their real estate services. When the transaction is complete, the full range of combined occupier services—including CBRE’s leasing expertise and GWS’s engineering expertise—will be available to the clients of both companies.

“The exceptionally talented GWS team will greatly enhance our service offering for occupiers around the world,” said Bob Sulentic, president and chief executive officer of CBRE. “With GWS, we further our ability to create advantages for occupier clients by aligning every aspect of how they lease, own, use, and operate real estate to enhance their competitive position.” 

CBRE and Johnson Controls also announced a 10-year strategic relationship. CBRE will provide Johnson Controls with a full suite of integrated corporate real estate services (including facilities management, project management, and transaction services) on more than 50 million square feet and Johnson Controls will offer a factory-direct relationship on HVAC equipment, building automation systems, and related services to CBRE for its managed properties. In addition, the companies will jointly fund an innovation lab that will develop leading-edge energy management solutions to lower costs and enhance their clients’ work environments. The joint innovation lab will evaluate, connect, and leverage products, services, and energy data to create value for occupiers and investors of real estate.

“Clients are increasingly asking us for fully integrated real estate and facilities solutions, which includes self-performing building technical services across their global portfolios,” said Bill Concannon, chief executive officer, GCS for CBRE. “GWS will further improve our ability to serve clients in more than 50 countries with a market-leading capability in all services, industry sectors, and property types. The GWS team is a great fit for our business. They bring leadership and expertise in many areas that are vital to our clients, including engineering excellence, global supply chain management, mission-critical facilities, and energy management.”

GWS serves a roster of global corporations, particularly in the industrial/manufacturing, life-sciences, and technology sectors. Clients typically purchase these services under five-year contracts, and the average tenure for GWS’s 50 largest clients is 12 years. 

Upon closing, John Murphy, GWS’s president, will join CBRE as global chief operating officer, GCS. “This combination will create a global market leader in the provision of value-added occupier services that enable clients to derive maximum value from their workplaces. Together, we will assure clients of high-quality, reliable, cost-efficient, comfortable, and safe working environments no matter their core business mission,” said Murphy. “The fit between our two organizations—be it culture, values, a client-centered ethos, or our commitment to engaged and empowered employees—s outstanding. This fit will help accelerate our coming together to create new value for our clients and shareholders. I am extremely excited about our future as part of the first-class team at CBRE.”

Together, CBRE and GWS will manage nearly 5 billion square feet of real estate and corporate facilities globally, including 2.3 billion square feet in the Americas. GWS, which has approximately 16,000 employees worldwide, generated approximately $3.4 billion of revenue for the 12 months ended December 31, 2014. 

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