Stronger than expected leasing activity helped Los Angeles-based real estate services firm CB Richard Ellis (NYSE: CBG) post a dramatic rise in net income during the second-quarter. Net income rose to $50.4 million from a paltry $3 million in the second-quarter 2004, while revenue climbed 22% in the second quarter 2004, a $122.7 million increase.
“Consistent with our expectations, the U.S. leasing market is staging a steady recovery,” says Brett White, chief executive officer at CBRE. “The market cycle has reached an inflection point nationally, with most markets seeing measured increases in absorption, lower vacancies and modest rental gains.”
The strong performance beat analysts’ expectations that second-quarter profit would hover near 42 cents per share. Minus outstanding costs from the 2003 Insignia acquisition, CBRE earned 70 cents per share in the second-quarter, well above the second-quarter 2004’s earnings of 32 cents per share.
Over the past two years, intermittent job gains and low interest rates have bolstered the firm’s leasing and sales business lines. Most observers see a tangible recovery unfolding in commercial real estate fundamentals. CBRE raised its full-year earnings guidance to a range of $2.40 to $2.50 per share, minus one-time charges.