CBRE Group's third-quarter 2014 adjusted earnings came in 11% ahead
of the Zacks Consensus Estimate and up 33% year over year. Results
were fueled by solid growth in revenues across all global regions.
The earnings beat is encouraging and we expect the company to
benefit from improving leasing, property sales, and outsourcing
business going forward. Moreover, strategic buyouts have played a
vital role in enhancing CBRE's geographic coverage as well as
broadening its service offerings. With market conditions continuing
to improve, we believe that opportunistic acquisitions would serve
as growth drivers, supplementing the company's organic growth.
However, regulatory limits on GSEs lending and unfavorable foreign
currency movement are our concerns. Nevertheless, we believe that
the strategic investments in people and platform are favorable for
the long-term perspective of this company and would help it to gain
Headquartered in Los Angeles, CBRE Group, Inc., is a commercial
real estate services and investment firm, offering a wide range of
services to tenants, owners, lenders and investors in office,
retail, industrial, multi-family and other types of commercial real
estates in all major metropolitan areas across the globe. The
services include valuation, real estate investment management,
commercial property and corporate facilities management, tenant
representation, occupier and property/agency leasing, property
sales, commercial mortgage origination and servicing, capital
markets (equity and debt) solutions, development services and
proprietary research. Revenues are generated by the company from
management fees on a contractual and per-project basis, as well as
from commissions on transactions.
CBRE reports its operating results under 5 segments: the
Americas, EMEA (Europe, the Middle East and Africa), the
Asia-Pacific, Global Investment Management and Development
The Americas is the largest segment of operations and provides a
wide range of services throughout the U.S., as well as in the
largest metropolitan regions of Canada and key markets of Latin
America. The segment accounted for 63% of the 2013 total
The EMEA segment operates in several countries, with largest
operations in the UK, France, Spain, Germany, the Netherlands and
Italy. Within EMEA, services are organized along the same lines as
in the Americas, including brokerage, investment properties,
corporate services, valuation/appraisal services, asset management
services and facilities management among others. The segment
contributed 17% of the 2013 total revenues.
The Asia Pacific segment operates in 13 countries, primarily
China, Hong Kong, India, Japan, Singapore, South Korea, Australia
and New Zealand. The segment generated 12% of the 2013 total
The Global Investment Management segment offers investment
management services to clients who seek to generate returns and
diversification through direct and indirect real estate investments
across North America, Europe and Asia. The segment accounted for 7%
of the 2013 total revenues.
The Development Services segment provides commercial real estate
development and investment services primarily in the U.S. The
segment contributed for 1% of the 2013 total revenues.
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