CB Richard Ellis Group, the world's largest commercial real estate brokerage, on Tuesday reported a strong third quarter propelled by increased property sales and leasing in the U.S. and abroad.
Although local commercial rents are still falling and property values remain uncertain, a growing number of transactions helped the Los Angeles company report a 360% increase in profit to $57 million, or 18 cents a share, compared with $12.4 million, or 4 cents, in the third quarter of 2009.
The company posted adjusted earnings of 20 cents a share after deducting select charges, ahead of Wall Street analysts' prediction of 17 cents.
Revenue increased 24% to $1.3 billion.
With liquidity finally returning to the investment market, the company's commissions on property sales are picking up, Chief Executive Brett White said. Globally, property sales revenue jumped 63% in the third quarter compared with the depressed third quarter of 2009.
Revenue in the U.S., Canada and Latin America rose 26% to $812.3 million. That included a 69% increase in revenue from brokering property sales and a 36% jump in revenue from arranging leases.
Office rents and occupancy declined in Southern California in the third quarter. Nationally, however, office and industrial occupancy rose in the third quarter for the first time in three years, according to CB Richard Ellis.
The company "demonstrated solid revenue growth across all our business segments as well as strong operating leverage," White said. "Business momentum remains positive heading into year-end, notwithstanding sluggish global economic activity."
Continued moderate growth in the economy and real estate business should benefit CB Richard Ellis, analyst Craig Silvers said.
"At this point in the recovery, you can't ask for a better quarter," said Silvers, president of Bricks & Mortar Capital. "Revenues are up significantly in all business segments."
Shares of CB Richard Ellis rose 4 cents to $18.90 before the results were announced.