CB Richard Ellis cuts loss, boosts revenue
CB Richard Ellis Group Inc., the world’s largest commercial real state brokerage, reported a first-quarter loss Wednesday but said the business of selling and leasing buildings was picking up.
The Los Angeles-based company said it had a net loss of $6.6 million, or 2 cents a share, compared with a loss of $36.7 million, or 14 cents, in the same period a year ago.
The company posted adjusted earnings of 1 cent a share after deducting one-time charges mostly related to cost-cutting measures and write-downs of impaired assets. On that basis, CB Richard Ellis met Wall Street analysts’ predictions.
Revenue increased 15% to $1 billion, and Chief Executive Brett White said market conditions were getting better, especially in Asia.
“Financial performance improved from a year ago in all geographic regions and virtually every service line, and was well ahead of our internal expectations,” he said.
There were “substantial” increases in both sales and leasing in the United States, Canada and Latin America, the company said in a statement. Exact numbers will be released Thursday.
CB Richard Ellis and other commercial real estate firms have been feeling the woes of their clients: property owners who can’t sell their buildings and landlords who are losing tenants. Fewer deals means fewer commissions for brokerages.
Most commercial real estate markets in the U.S. have been in decline for about two years as property values and rents fell. About 55.5 million square feet of office space is vacant in Los Angeles, Orange, Riverside and San Bernardino counties, 19% of the total in those areas.
But revenue growth at CB Richard Ellis during the traditionally slow first quarter suggests signs of recovery, said analyst Craig Silvers, president of Bricks & Mortar Capital.
“Revenues are going up faster than anyone would have expected,” Silvers said. “There is probably pent-up demand out there that will keep this momentum moving.”
CB Richard Ellis shares rose 64 cents to $17.24.