ING Divests CRE Holdings

February 15, 2011
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user morrissey

ING is making major moves in its quest to decrease its presence in the commercial real estate market. The company has entered into an agreement to sell the majority of its ING Real Estate Investment Management business to CB Richard Ellis Group Inc., and in a separate agreement the company committed to sell Clarion Partners, its U.S.-based private market real estate investment manager, to Lightyear and Clarion Partners management. The two transactions are valued at a total of approximately $1.1 billion.

ING will rake in approximately $1 billion in cash from CBRE. In exchange, the commercial real estate services firm–already the largest in the world in terms of revenue–will walk away with a majority stake in ING REIM’s Europe and Asia operations, as well as Clarion Real Estate Securities, which is ING REIM’s U.S.-based manager of listed real estate securities, and a portion of ING’s equity interests in funds managed by ING REIM Europe, ING REIM Asia and CRES. Together, ING REIM Europe, ING REIM Asia and CRES closed 2010 with $59.8 billion in assets under management.

CB Richard Ellis CEO Brett White said that ING REIM, when combined with the company’s existing global investment management operations, provides a significantly enhanced ability to meet the needs of institutional investors across global markets with a full spectrum of investment programs and strategies.

CBRE will not have to solicit lenders to fund the purchase; the company will rely on cash on hand and borrowings under its secured credit facility.

And in a separate arrangement, ING will sell Clarion Partners, which had $22 billion in assets under management at the end of last year, to the partnership involving Lightyear and Clarion Partners management for $100 million.

The commercial real estate market may be back on the upswing, but the change has is not stopping ING from moving forward with its real estate industry goals. The transactions announced today represent the best outcome for ING, and REIM clients and REIM employees, an ING spokesperson told CPE. For ING, these transactions are in line with its objectives of reducing exposure to real estate, simplifying the company and strengthening its capital base. At the same time, she added, ING has found in the buyers–CBRE, Clarion Partners Management–solid partners to further build these businesses and ensure continuity of investment teams in managing client assets.

The CBRE transaction and the Lightyear deal are on track to close in the second half of 2011