GCS Business Drivers Presentation for Business Review Day

CB Richard Ellis | Page 2

Contents

Key business drivers

The evolution of outsourcing

Our Win/Keep/Grow strategy

CB Richard Ellis | Page 3

Contents

Key business drivers

The evolution of outsourcing

Our Win/Keep/Grow strategy

CB Richard Ellis | Page 4

Key Business Drivers

Corporate real estate groups are centralizing

and expect to centralize further

75%

have

centralized

within

the

last

three

years

(1)

Only

have

decentralized

the

last

three

years

(1)

65%

expect

centralize

further

the

five

years

(1)

Only

expect

decentralize

further

the

five

years

(1)

(1) CoreNet, 2007

CB Richard Ellis | Page 5

Key Business Drivers

Centralized corporate real estate groups

are being given increased responsibility

All real estate and facilities functions housed in one organization

Larger budgets and increased budget control

Becoming strategic partner and service provider to business units

Integration/collaboration with other shared services

(finance, HR, etc.)

CB Richard Ellis | Page 6

Key Business Drivers

Real estate leaders are increasingly from outside real estate

Strategy consulting

Top 5 global insurance brokerage

250m

Business unit

U.S. Fortune 20 telecom firm

80m

Financial management

officer

U.S. Fortune 15 telecom firm

150m

Human resources

Large software company

60m

Field operations

Top 5 global energy company

30m

Risk management

Top 3 global metal producer

22m

Supply chain officer

U.S. based top financial services firm

10m

Accounting

Top global media firm

Example

Corporate real estate

executive background

Portfolio size (s.f.)

CB Richard Ellis | Page 7

Key Business Drivers

Increasing investor interest in owning

corporate real estate

$3.6 trillion in commercial real estate assets owned by

corporations

(1)

$11.2 billion

sale-leasebacks

2006

–

15%

increase

from

2005

(2)

High prices/valuations for corporate-owned real estate assets

(1) Prudential Real Estate Investors, 2003

(2) Real Capital Analytics, 2006

CB Richard Ellis | Page 8

Key Business Drivers

High M&A and private equity buyout volume

Real estate and facilities generally part of post-merger and post-LBO

corporate transformations

$3.7 trillion in global M&A volume in 2006 –

up by 30%

(1)

$375 billion in U.S. private equity buyouts in 2006 –

up by 250%

(1)

(1) Thomson Financial, 2006

CB Richard Ellis | Page 9

Key Business Drivers

Corporate focus on space utilization

and environmental sustainability

45-60% of space in the average U.S. HQ/regional office is

unoccupied

each

day

(1)

Leading firms experimenting with alternative workplace solutions

(e.g. different design standards, hoteling)

Environmental sustainability is a near-term critical issue for 79% of

real estate departments -

78% are willing to pay a premium for

sustainable

real

estate

solutions

(2)

(1) Business Week, 2006

(2) CoreNet, 2007

CB Richard Ellis | Page 10

Key Business Drivers

Continued real estate outsourcing growth

90% expect outsourced corporate real estate spend to increase -

with

45%

expecting

“increase

greatly”

(1)

Outsourcing

expected

“increase

significantly”

for

all

GCS

services

(1)

Firms seek “speed to market”, “access to qualified personnel”, and

“business

process

redesign”

from

outsourcing

–

addition

cost

savings

(2)

(1) CoreNet, 2007

(2) Duke University, 2006

CB Richard Ellis | Page 11

Contents

Key business drivers

The evolution of outsourcing

Our Win/Keep/Grow strategy

CB Richard Ellis | Page 12

Corporate Real Estate Outsourcing Continues to Evolve

Up to 1980’s

In-House

1980’s

Out-Tasking

In-House

1990’s

Out-Sourcing

In-House

2000’s

Alliance

Partnerships

Today

Beyond

VALUE DELIVERED

CB Richard Ellis | Page 13

Today and Beyond Favor Global, Full-Service Providers

Clients seeking breadth of global coverage: #1 service provider

criterion

(1)

Clients seeking breadth of services: #3 service provider criterion(1)

Long, intensive business development cycles: often 9-12 months

or more

Clients demand global best practices and innovation

Third party consultants and in-house procurement stress

experience, credibility and track-record as buying criteria

Significant technology, systems and infrastructure investments

required

(1)

CoreNet, 2007 (#2 criterion: expertise in individual countries)

CB Richard Ellis | Page 14

GCS Addresses the Total Occupancy Cost Universe

Repairs

Contracts

13%

Utilities

15%

Payroll

Depr/Amort

17%

Tax

10%

Rent

26%

Annual Operating Expenses

MIS, Telecom,

Cabling

12%

Furniture &

Workstations

20%

Construction

Labor &

Materials

49%

Moving

Expense

Architect/

Engineer

Project

Mgmt

Annual Capital Expenses

Note: not necessarily representative; based on sample of CBRE client data

CB Richard Ellis | Page 15

Contents

Key business drivers

The evolution of outsourcing

Our Win/Keep/Grow strategy

CB Richard Ellis | Page 16

Contract w/ Renewable Term

Contract w/ Finite Term

No Contract –

Deal by Deal

Brokerage

One-off/Local

“Programs”

(e.g., Compliance,

Operational Refit,

Growth, Rebranding)

(Single or

Multiple Service)

Full Service —

Domestic

“Portfolio”

Full Service –

Global

“

Preferred”

Brokerage –

No Contract

Single Transaction + PjM

One-off/Local

“Projects”

How Our Clients Buy

CB Richard Ellis | Page 17

Our Win/Keep/Grow strategy

Move CBRE “Project”

& “Preferred”

clients

(usually Brokerage) to contracts

Embed sales/consulting in select number of

largest global opportunities

Win outsourcing opportunities in the market (i.e.

RFPs)

Target key clients in Government and Healthcare

verticals

WIN

KEEP

GROW

CB Richard Ellis | Page 18

Our Win/Keep/Grow strategy

Apply client satisfaction and operational

excellence methodologies to clients

Renewal of clients with expanded terms

Embed sales/consulting in advance of large

renewals

KEEP

WIN

GROW

CB Richard Ellis | Page 19

Our Win/Keep/Grow strategy

Target ~ 115 TCC clients for geographical

expansion outside the U.S.

Target ~ 90 TCC clients for cross-selling

Transaction Management

Target ~110 CBRE clients for cross-selling

Project Management and Facilities Management

GROW

WIN

KEEP

CB Richard Ellis | Page 20

Our Win/Keep/Grow differentiators

Thousands of local CBRE relationships

Globally integrated sales/marketing team

Industry’s largest base of subject matter experts in each service

line

Industry’s largest base of global consulting professionals

Industry-specific specialty groups (e.g. financial services,

automotive, government, healthcare, etc.)