CBRE Closes First Phase of $940M Purchase of ING’s Securities, Management Businesses

July 6, 2011
By Barbra Murray, Contributing Editor

The first phase of CB Richard Ellis Group Inc.’s deal to acquire ING Group N.V.’s real estate securities business and its investment management operations for a combined sum of $940 million, has closed. The commercial real estate services firm, which has long held the title of the largest such firm in the world, just wrapped up the purchase of ING Clarion Real Estate Securities and renamed the division CBRE Clarion Securities.

CBRE Clarion Securities will operate under the umbrella of CB Richard Ellis Investors, which is CBRE’s global investment management division. The former ING CRES entity brings to the table a listed securities portfolio consisting of $20.5 billion of assets under management, thereby allowing CBRE Investors to increase its $37.9 billion of assets under management by nearly 50 percent to an aggregate $58.4 billion.

The transaction also leaves CBRE with roughly $59 million of equity interests in the funds managed by CRES, in addition to another name change–the one-time ING Clarion Global Real Estate Income Fund is now the CBRE Clarion Global Real Estate Fund.

The second part of the arrangement between CBRE and ING calls for the commercial real estate services firm to purchase nearly all of ING’s Real Estate Investment Management operations in Europe and Asia, as well as a portion of the equity interests in funds managed by ING REIM Europe and ING REIM Asia. This final phase of the billion-dollar deal is on target to reach completion later this year. The source of funding for both phases consists of cash on hand and borrowings under CBRE’s secured credit facility.

Investors around the globe have come off the sidelines in the real estate game, but improvements in the market have not dissuaded ING from staying on track with its plan to significantly decrease its exposure in real estate in an effort to streamline the company’s activities and fortify its capital base. As part of the strategy, ING also orchestrated the divestment of Clarion Partners, its U.S.-based private market real estate investment manager, to a team involving Lightyear Capital L.L.C. and Clarion Partners management for $100 million. The transaction was closed in June.