CBRE Drops on Transaction-Volume Scrutiny: San Francisco Mover
February 08, 2012, 1:06 PM ESTBy Samantha Zee
Jan. 30 (Bloomberg) -- CBRE Group Inc., the world’s largest commercial real estate services firm, fell the most in six weeks as investors focus on fourth-quarter transaction volumes ahead of earnings reports.
CBRE, which had about $94.8 billion in assets under management as of Sept. 30, 2011, fell as much as 4.5 percent, to $18.21, in New York trading.
CBRE rival Jones Lang LaSalle Inc., the second-largest publicly traded real-estate broker, is scheduled to report earnings tomorrow. Los Angeles-based CBRE will report Feb. 7.
“There could be some fears for CBRE going into Jones earnings after being a robust performer last week as the stocks correlate,” Anthony Paolone, an analyst at JPMorgan Chase & Co., said in an interview today. He has an “overweight” rating on CBRE’s shares.
“In November, transaction volume was looking weak, but December proved to be stronger perhaps because deals closed then,” he said. “With a pretty strong December and good market share, CBRE numbers should be OK.”
A “cautious outlook” for commercial real estate will persist into 2012, CBRE Global Research said in a Jan. 20 report, and “demand for space will remain moderate.”
“As far as the U.S. is concerned, real estate markets are moving forward across all property types,” Paolone said. “We are seeing things stabilize but we are still early in the recovery.”
U.S. office vacancies fell in the three months through December, extending a yearlong recovery, as a dearth of new supply helped counter sluggish economic growth, Reis Inc. said in a report earlier this month.
The vacancy rate dropped to 17.3 percent from 17.6 percent a year earlier and 17.4 percent in the third quarter, the New York-based property research firm said in the Jan. 6 report. The fourth-quarter rate was the lowest since the end of 2009, according to Reis.
A strengthening job market and limited supply of new real estate means “positive growth across the entire real estate sector,” Paolone said.
--With assistance from Hui-yong Yu in Seattle. Editors: Jeffrey Taylor, Daniel Taub
To contact the reporter on this story: Samantha Zee in San Francisco at szee@bloomberg.net
To contact the editor responsible for this story: Jeffrey Taylor at jtaylor48@bloomberg.net
