CBRE Launches New Automotive Group

Gerard points out that CBRE historically has served clients across the full spectrum of the automotive sector—manufacturers, suppliers, dealers and investors—by helping them reach their business goals. One of the greatest needs within the APG today is for services to help auto dealers, Gerard says. Hence, CBRE has created a group within the APG called Automotive Dealership Services, which offers bundled services specifically developed around dealers' expansion, contraction, relocation and consolidation needs.

In addition to managing idle properties, Automotive Dealership Services provides disposition and acquisition, asset repositioning, site selection and other offerings that address the needs of both franchised and OEM-owned dealerships. Among the other services that can be of benefit to the automotive sector are asset valuation, repositioning, financing, leasing and performance maximization, as well as construction, project, facility and energy management.

CBRE has already provided valuation services for more than 600 dealerships over the past 18 months and has picked up assignments to manage 50 top 60 vacant properties for dealers, auto manufacturers and lenders within the past 30 days, Gerard points out. The vacant dealerships are managed through a service called Idle Properties Management, one of the new and expanded services that CBRE is offering as part of Automotive Dealership Services.

Another new element in CBRE's approach is called the Champions Program. The company identified the person best qualified to represent dealership interests in every one of its major offices and has designated that person as the Dealership Champion for that office, Gerard explains.

The launch of the Automotive Properties Group is in part a response to the shift in goals on the part of those in the automotive industry as a result of the downturn. Before the downturn, when dealerships traded they often sold as investments but typically remained auto dealerships, Gerard explains.

With dealerships closing as a result of the recession and the auto industry's paring down its dealership ranks, however, the need for CBRE's services has grown not only in terms of the number of dealerships that require assistance but also in the host of different services they require.

"A lot of these dealerships are owned by families that have had most of their wealth and livelihood tied up in these properties for generations. This is still valuable real estate, and they need our assistance to maximize its value," Gerard says. "Regardless of whether the properties are converted to a different use or a different brand of dealership, there is work involved" in getting engineering drawings, securing entitlements and myriad other tasks that must be completed to make the change. CBRE's project management group, for example, can assist property owners in rebranding dealerships, Gerard points out.

"We can tell them (the property owner) very quickly what the value of the property is and also whether it is likely to be approved for use as a church, an auto parts store or some other use—or scraped and rebuilt as another type of property," Gerard adds. He says that a key element of such conversions is working with the local community to ensure that the property's ultimate use conforms to the community's master plan and its zoning. "Most of the time it is likely to be some sort of commercial use," Gerard says, "Cities need taxes today more than ever, so as a result they are showing more flexibility in finding acceptable uses under their zoning that will help them to add to their tax base," he notes.