CBRE Group, Inc. (CBG): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report
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 market share.
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 Services.
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 revenues.
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 revenues.
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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