Thursday, January 3, 2002

CB Richard Ellis
shuffles executives

By Tim Ruel

Commercial real estate firm CB Richard Ellis Hawaii Inc. has reshuffled its management and put employees partly back on commission after a sluggish year in 2001.

G. Scott McCormack and Frances Okazaki are stepping down as co-managing directors. The two will serve as brokers while keeping their seats on the firm's executive committee. McCormack will continue to serve as president while Okazaki will continue as chairwoman.

Joe Haas, formerly senior vice president and manager of office properties at CB, yesterday assumed the role of sole managing director and will be in charge of the firm's operations. Haas, who has been at CB for 15 years, will report to the executive committee, of which he is a member as well. The firm's board of directors will remain the same.

CB Richard Ellis was established in Hawaii in 1986 and was a subsidiary of its California-based parent until January 2000, when top employees bought the local operation and created a partnership. McCormack, son of developer Mike McCormack, joined CB during the changeover. He previously served as senior vice president of Trinity Investment Trust LLC, owner of Aloha Tower Marketplace. Okazaki joined CB Richard Ellis' predecessor firm in 1987 as an office leasing specialist.

McCormack will work with tenants and buyers as well as focus on consulting, while Okazaki will concentrate on the office and investment side.

When CB became a partners office, the firm deviated from other local brokerages by paying salaries and bonuses to its employees, as opposed to straight commissions on deals. "That worked terrific in a year where business was good, particularly in 2000. That was our best year ever," Haas said. The firm sold the former Hawaiian Regent for $130 million, the Ilikai for $65 million and the Lai Honua residential development parcel in Wailea for $25 million. But 2001 wasn't so hot, Haas said.

From now on, the firm will pay employees a combination of commissions and salaries, as well as bonuses. If a partner performs at the same level as a new employee, they get the same amount of money. "It depends on your individual performance," Haas said. He noted the firm is not cutting any of its 60-member staff.

Originally, CB opted for salaries to encourage brokers to act more in the interest of clients, but after a slow year in 2001, the firm needed to give employees more incentive to sell, Haas said.

He noted the firm has accomplished a lot since it became a partnership, such as expanding its asset services and creating a project management department.

"We're anticipating a pretty good year this year," Haas said.

The parent CB Richard Ellis, which went public in 1996, was bought in July 2001 for $800 million by a group of investors led by Blum Capital Partners LP. CB Richard Ellis has 250 offices in 44 countries.

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