Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Investor Day (May 2007)
44 slides from Cbre's investor day presentation, May 18, 2007
Slide 1: Business Review Day Case Study: The New York Times Company
Business Review Day Case Study: The New York Times Company Mary Ann Tighe Chief Executive Officer New York Tri-State Region May 18, 2007 Exhibit 99.9
Slide 2: Leveraging the CBRE Platform
Leveraging the CBRE Platform
Slide 3: The New York Times, 229 West 43rd Street
ithe Ch c N ew t dork Eimes 229 West 43rd Street CB RICHARD ELLIS
Slide 4: The Challenge: West 43rd Street
The Challenge 229 West 43rd Street
Slide 5: The Challenge
The Challenge West 43rd Street
Slide 6: The Challenge: W Eighth
229 W 43 620 Eighth The Challenge W 43 Eighth
Slide 7: A Complex Matrix of Needs
Landmarks Landmarks New York City Developer Partner New York State New York Times Co. A Complex Matrix of Needs • Designation • Designation • Real estate taxes • Economic development • Reasonable land price • Anchor tenant • Trophy property • Land proceeds • nd DP completion • Condemnation Funding •
Slide 8: A Complex Matrix of Needs: New York Times Co.
New York Times Co. A Complex Matrix of Needs Consulting/ Office Leasing • Ownership • Large floor plate • Times Square • Development expertise • Limit cost overrun risk • Limit speculative risk • Real estate tax risk • Limit 229 disposition risk
Slide 9: A Complex Matrix of Needs: New York Times Co.
New York Times Co. A Complex Matrix of Needs Consulting/ Office Leasing • Ownership • Large floor plate • Times Square • Development expertise • Limit cost overrun risk • Limit speculative risk • Real estate tax risk • Limit 229 disposition risk • Condominium Structure • 80,000 sf base floors • Time
Slide 10: A Complex Matrix of Needs: Developer Partner
Developer Partner A Complex Matrix of Needs Consulting/ Office Leasing • Reasonable land price • Anchor tenant • Trophy property
Slide 11: A Complex Matrix of Needs: Developer Partner
Developer Partner A Complex Matrix of Needs Consulting/ Office Leasing • $85 mm shared • Tower funding mechanisms • 52-story Times Square office tower • Reasonable land price • Anchor tenant • Trophy property
Slide 12: A Complex Matrix of Needs: New York City, New York State
New York City New York State A Complex Matrix of Needs • Real estate taxes • Economic development • Land proceeds • nd DP completion • Condemnation Funding • Architecture Consulting/ Office Leasing
Slide 13: A Complex Matrix of Needs: New York City, New York State
New York City New York State A Complex Matrix of Needs • $14.0 mm per year • “Multiplier Effect” • Real estate taxes • Economic development • Land proceeds • nd DP completion • Condemnation Funding • Architecture • $85 mm • Commitment to build • 120% Letter of Credit • Renzo Piano Consulting/ Office
Slide 14: A Complex Matrix of Needs: Landmarks
Landmarks A Complex Matrix of Needs • Designation • Designation Consulting/ Office Leasing
Slide 15: A Complex Matrix of Needs: Landmarks
Landmarks A Complex Matrix of Needs • Designation • Designation • Friendly landmarking Consulting/ Office Leasing
Slide 16: Resolution
New York City Developer Partner Landmarks New York State New York Times Co. Resolution • $14.0 mm per year • “Multiplier Effect” • Real estate taxes • Economic development • Reasonable land price • Anchor tenant • Trophy property • $85 mm shared • Tower funding mechanisms • story Times • Designation
Slide 17: CBRE
CBRE CB RICHARD ELLIS
Slide 18: Sale of West 43rd Street, 2004
Sale of 229 West 43rd Street Investment Sales 2004
Slide 19: Sale of West 43rd Street, 2007
Sale of 229 West 43rd Street Investment Sales 2007
Slide 20: Forest City Ratner, New York Times, CBRE
Forest City Ratner New York Times CBRE CB RICHARD ELLIS
Slide 21: Chronology: Dechert LLP 190,000 SF Eighth Avenue
Dechert LLP 190,000 SF 620 Eighth Avenue Chronology March 2006
Slide 22: Chronology: Landlord ceased negotiation
Dechert LLP 190,000 SF 620 Eighth Avenue Chronology March 2006 Landlord ceased negotiation
Slide 23: Chronology: Covington and Burling 160,000 SF
Dechert LLP 190,000 SF Covington and Burling 160,000 SF 620 Eighth Avenue Chronology March 2006 Landlord ceased negotiation April 2006
Slide 24: Chronology: Seyfarth & Shaw 96,000 SF
Dechert LLP 190,000 SF Covington and Burling 160,000 SF Seyfarth & Shaw LLP 96,000 SF 620 Eighth Avenue March 2006 Landlord ceased negotiation April 2006 June 2006 Chronology
Slide 25: Chronology: Osler, Hoskin & Harcourt 60,000 SF
Dechert LLP 190,000 SF Covington and Burling 160,000 SF Seyfarth & Shaw LLP 96,000 SF Osler, Hoskin & Harcourt 60,000 SF 620 Eighth Avenue March 2006 Landlord ceased negotiation April 2006 June 2006 July 2006 Chronology
Slide 26: Chronology: Legg Mason 190,000 SF
Dechert LLP 190,000 SF Covington and Burling 160,000 SF Seyfarth & Shaw LLP 96,000 SF Osler, Hoskin & Harcourt 60,000 SF Legg Mason Inc. 190,000 SF 620 Eighth Avenue March 2006 Landlord ceased negotiation April 2006 June 2006 July 2006 August 2006 Chronology
Slide 27: 620 Eighth Avenue Tenants
Tt a Legg Mason/Western Asset Mgt. Covington & Burling ‘Multiple Tenants (Osler, Hoskin & Harcourt Seyfarth Shaw Goodwin Procter New York Times Available CBRE CB RICHARD ELLIS
Slide 28: Times Square: Investment Sales
11 Times Square Investment Sales
Slide 29: Times Square: Agency
11 Times Square Agency
Slide 30: The New York Times article, Region / New Jersey
Che New dork Cimes VOLeLr wae ‘NEW YORE Funai say 183007 Region / New Jersey CBRE CB RICHARD ELLIS
Slide 31: Edison, New Jersey: Industrial
Edison, New Jersey Industrial
Slide 32: The Challenge
The Challenge Discontinue operations at Edison, NJ printing plant Scheduled closing – Summer 2008 • Real estate dispositions – 1.3 million sf leased printing plant – 400,000 sf owned warehouse – 24.9-acre owned land site • Certainty and surety of closing • Quick results but not at financial cost • M
Slide 33: Complex Dynamics
New York Times Co. Landlord The Properties Market Environment Complex Dynamics • Printing plant lease 40% above market • Costly restoration obligation • Prior land sales efforts failed • Labor sensitivities • Real estate tax appeals • Not a seller; refinancing in-process • Opportunistic - risk adver
Slide 34: Complex Dynamics: New York Times Co.
New York Times Co. Complex Dynamics • Printing plant lease 40% above market • Costly restoration obligation • Prior land sales efforts failed • Labor sensitivities • Real estate tax appeals
Slide 35: Complex Dynamics: New York Times Co.
New York Times Co. Complex Dynamics • Printing plant lease 40% above market • Costly restoration obligation • Prior land sales efforts failed • Labor sensitivities • Real estate tax appeals • Purchase-Flip Strategy • Bundled offers: Sale & monetized lease, conventional sale • Eliminated future risks
Slide 36: Complex Dynamics: Landlord
Landlord Complex Dynamics • Not a seller; refinancing in-process • Opportunistic - risk-adverse
Slide 37: Complex Dynamics: Landlord
Landlord Complex Dynamics • Not a seller; refinancing in-process • Opportunistic - risk-adverse • Offer premium over refinancing parity • Position risks and rational pricing on re-renting
Slide 38: Complex Dynamics: The Properties
The Properties Complex Dynamics • Highest-and-best-use • Three distinct parcels: • Plant - significant capex to restore • Warehouse - outside tenant; lease below market • Land - development challenged
Slide 39: Complex Dynamics: The Properties
The Properties Complex Dynamics • Highest-and-best-use • Three distinct parcels: • Plant - significant capex to restore • Warehouse - outside tenant; lease below market • Land - development challenged • Package as one site • Long term and short term leasebacks • Position as state-of-the-art facility
Slide 40: Complex Dynamics: Market Environment
Market Environment Complex Dynamics • No large land options on NJ Turnpike • Past 5 years, no large offerings of size • Count/size of user requirements • Pensions/institutions underweighted; private equity aggressive
Slide 41: Complex Dynamics: Market Environment
Market Environment Complex Dynamics • No large land options on NJ Turnpike • Past 5 years, no large offerings of size • Count/size of user requirements • Pensions/institutions underweighted; private equity aggressive • Promote as unique, 86-acre tract • “Super Buyer” approach • Pre-emptive opportuni
Slide 42: Complex Dynamics Summary
New York Times Co. Landlord The Properties Market Environment Complex Dynamics • Printing plant lease 40% above market • Costly restoration obligation • Prior land sales efforts failed • Labor sensitivities • Real estate tax appeals • Purchase-Flip Strategy • Bundled offers: Sale & monetized lease,
Slide 43: Resolution
Resolution “Whole” vs. “Sum of the Parts” $92 million Sale = 25% Incremental Asset Value Created
Slide 44: Leveraging the CBRE Platform
Leveraging the CBRE Platform