Wednesday, October 27, 2010

Commerical property sales rebound in third-qtr

NEW YORK: Two of the world's largest commercial real estate services companies reported sharply improved earnings on Tuesday, Oct 26, fueled chiefly by a pickup in building sales and leasing, particularly in the United States.

After more than a year of nearly no activity, U.S property sales have begun to pick up as buyers and sellers agreed on prices. That helped Jones Lang LaSalle Inc and CB Richard Ellis Group Inc record strong earnings growth in the third quarter.

Boston PROPERTIES [], which has been on a buying spree over the past couple of months, reported better-than-expected results.

Luxury mall owner Taubman Centers Inc reported earnings that were hurt by an unexpected drop in lease cancellation fees. But the company raised its full-year forecast after sales at its malls rose 13 percent per square foot.

The slow rebirth of the U.S. commercial mortgage backed securities market (CMBS) and loosening of lending by banks have greatly improved U.S. commercial real estate sales this year. Real Estate research firm Real Capital Analytics expects sales to top $100 billion in 2010, nearly double the $54.4 billion in 2009.

U.S. companies also have begun to lease more space as they become more confident about the economy.

Sales and leasing transactions are the bread and butter of real estate services companies, providing higher margins than property management or corporate services.

"We've seen sales and leasing improve all year," JMP analyst Will Marks said. "Third-quarter results really picked up from 2009 levels, but they're still nowhere near the levels at the peak."

CB Richard Ellis, based in Los Angeles, posted third-quarter earnings, excluding charges, of $62.4 million, or 20 cents per diluted share up from $21.6 million, or 8 cents a share in the year-earlier quarter.

Analysts on average expected 17 cents per share, according Thomson Reuters I/B/E/S.

Revenue rose 24 percent to $1.3 billion. That was driven in part by a 26 percent revenue increase from the Americas region, with property sales up 69 percent and leasing revenue up 36 percent.

Jones Lang LaSalle posted third-quarter adjusted earnings of $38 million, or 86 cents per share, compared with $27 million or 61 cents per share in the year-earlier quarter.

Analysts on average expected 95 cents per share.

Chicago-based Jones Lang LaSalle said its revenue rose 20 percent to $708 million. In the Americas, revenue rose 29 percent, with leasing revenue up 38 percent, and sales and hotels up 127 percent.

Taubman reported third-quarter adjusted funds from operations of $33 million or 59 cents per square foot compared with a loss of $67 million, or $1.26 per share in the year ago period.

Analysts had expected third-quarter FFO of 67 cents per share. FFO is a real estate investment trust performance metric, which removes the profit-reducing effect of depreciation from earnings.

The company, based in Bloomfield Hills, Michigan raised it 2010 FFO forecast to a range to $2.77 per share to $2.82 per share from $2.65 per share to $2.75 per share based on improving rents and higher lease cancellation and recoveries.

Boston Properties reported FFO of $150.8 million, or $1.07 per share diluted compared with $158.5 million, or $1.13 per share.

Analysts expected FFO of $1.03 per share.

Boston Properties said it expects to report fourth quarter FFO of $1.09 per share to $1.12 per share.

The companies reported after the close of the New York Stock Exchange on Tuesday. Jones Lang LaSalle shares closed down 0.7 percent at $85.37. CB Richard Ellis shares closed up 0.2 percent at $18.90 and were at $19.06 after hours. Taubman shares closed down 1.1 percent at $48.30, and were at $48.76 in after-hours trade. Boston Properties shares closed down 1 percent at $89.87. - Reuters


  1. our new project is comming soon noida ext.our project is jaypee greens kensington boulevard are offered in options varying from studio apartments to penthouses with areas varying from approximately 550 – 3000 sq ft.
    contact as 9711203076

    Jaypee Greens Kensington Boulevard

  2. Understanding real estate trends is the perfect way to go if you’re looking at trying to invest in real estate. You should always be well prepared.
    property management