CBRE Slapped With Lawsuit Over $6 Million Commission Debacle

By Barbra Murray

CBRE is facing a legal issue in the Chicago area, with GW Properties having named the commercial real estate services giant in a lawsuit, according to The Real Deal. GW Properties is asking the courts to force two CBRE brokers to remove liens they placed against two of GW’s suburban Chicago lots that had been designated for medical office development. The CBRE brokers, Jonathan Springer and Kevin McLennan, filed the liens after requesting and failing to receive an agreed-upon $6 million commission on a collapsed transaction involving two 100,000-square-foot projects in Joliet and Orland Park, Illinois, that were under negotiation for lease to Duly Health Care. Duly had hired the CBRE team for representation in the lease transaction, which fell apart after GW determined that the cost to Duly’s plans for the buildings exceeded the developer’s original budget for the project. Despite the collapse of the deal, the brokers still want their commission. This issue now lies with the courts in Cook County and Will County.

A gargantuan company like CBRE, the world’s largest commercial real estate services firm, is no stranger to legal claims. Earlier this year, a New York judge dismissed a lawsuit against CBRE involving dual representation on a lease at a 600,000-square-foot property in Washington, D.C., and ruled that the firm could keep $11.6 million commission on the sublease transaction. And in April, CBRE put the shoe on the other foot when it filed a suit against Houston-based commercial real estate firm CXRE LLC over trademark infringement, claiming that the defendant’s marketing logo is similar to CBRE’s.

As for the GW lawsuit, the ruling could have a notable impact on the brokerage community. The brokers may still have a case even if they are forced to rescind the liens on GW’s properties. However, if further legal decisions prevent them from obtaining their commission, then it may become more difficult for brokers to collect on failed transactions. However, the very filing of the lawsuit will make players on both sides pay closer attention to the language in a contract regarding commissions when lease agreements fall apart.

Regardless of the outcome of any legal wrangling, CBRE will hardly see an impact on its bottom line. While the firm experienced a year-over-year drop in revenue in the first quarter of 2023, it still has $4.7 billion of total liquidity, $1.2 billion of which is cash. 

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