The slide in commercial real estate continues as both Bennigan’s and Mervyn Department stores both filed for bankruptcy this week.
That’s the story in general on the commercial side as the CB Richard Ellis reported this week. The results, needless to say, were below expectations.
Here’s the skinny:
From Reuters entitled: CB Richard Ellis 2nd-quarter profit falls 88pct
“CB Richard Ellis Group Inc, the world’s largest commercial real estate brokerage, said quarterly net income plunged 88 percent, partly on lower brokerage fees from sales that have all but dried up due to the severely constrained global credit markets.
Excluding one-time charges Los Angeles-based CB Richard Ellis would have earned $33.2 million, or 16 cents per share, compared with $157.3 million, or 66 cents last year, still far from the 44 cents analysts on average had expected, according to Reuters Estimates.
“As we had anticipated, the leasing business turned down from the strong first quarter, especially in the Americas and the UK, reflecting weak economic activity and decreasing business confidence,” Brett White, chief executive, said in a statement.
“Investment sales activity remained quite soft due to a broadening of the credit market turmoil and a continuing gap between buyer and seller expectations of property values. Decreased investment volumes have now become evident in all parts of the world.”
Revenue fell to $1.3 billion from $1.5 billion and behind the $1.42 billion analysts had expected, according to Reuters Estimates.
The commercial real estate market has been hampered by the broader tightness in the credit markets. The company’s two biggest markets, the United States and Britain have seen a dramatic fall-off in commercial real estate sales and a slowdown in demand for space.”
Here’s a great story on the Ebbing Retail Tide.
