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CB Richard Ellis Plans to Go Public

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The real estate services giant says in an SEC filing that it will sell as much as $150 million of stock in an IPO.

February 18, 2004|Roger Vincent | Times Staff Writer

Los Angeles real estate services giant CB Richard Ellis Group Inc. wants to go public -- again.

The company plans to sell as much as $150 million worth of stock in an initial public offering, according to a Tuesday filing with the Securities and Exchange Commission.

The filing didn't reveal how many shares the company planned to sell, an estimated offering price or when the shares would be sold.

The money would be used to pay off debt -- including the remaining $38.3 million of the company's 16% senior notes due 2011 -- and for other general corporate purposes. Underwriters for the offering are Credit Suisse First Boston and Citigroup Inc. Shares would trade on the New York Stock Exchange under the ticker symbol CBG.

CB Richard Ellis Group, formerly CBRE Holdings, said it was the world's largest commercial real estate services firm in terms of 2002 revenue. It has 13,500 employees in 220 offices in the U.S. and abroad and offers such services as brokerage, appraisal and property management.

CB Commercial, as the company was known, went public in 1996 and merged with Richard Ellis in 1998. CB Richard Ellis went private again during a real estate recession in 2001 and acquired competitor Insignia Financial Group last year.

The company has picked an opportune time to return to the public equity market, analyst Jim Sullivan of Green Street Advisors said.

Although the real estate segment has cooled a bit in recent months, stocks of many home builders and real estate investment trusts are trading at or near all-time highs, he said.

"There is an avalanche of money, public and private, looking to buy real estate or real estate securities," Sullivan said.

It's also a good time for initial public stock offerings overall. So far this year, 22 companies have gone public -- the fastest pace since 2000.

Real estate services companies have often disappointed investors because their business tends to be cyclical and revenues are hard to predict, said John Cushman, chairman of real estate services firm Cushman & Wakefield, which is a private company. But taking the opportunity to pay off debt might be a smart move.

"You don't want a lot of debt when swings can be so great" in the industry, Cushman said. Companies saddled with debt when the real estate market turned south have been punished by Wall Street, he said.

But Mark Rose, chief operating officer of real estate services firm Jones Lang LaSalle Inc., said there were advantages to being a public company.

"The people we work for are public," Rose said. "We understand the pain they're going through and the problems they have to solve."

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