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CBRE Group, Inc. Message Board

  • michael.obanion michael.obanion Sep 15, 2008 12:51 PM Flag

    CBG Could Go Broke

    I have no idea why you people would touch anything related to real estate, finance, insurance, etc with a ten foot pole. Anyone who thinks the worst is over is either gullible and believes Hank Paulson's lies or is a total moron. CBG is a heavily leveraged company who overpaid for a lot of real estate in the last 5 years. This thing could go to $0.30 in the blink of an eye.

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    • Hey Bud,
      They are a sevice company. They own RE as an advisor investing
      pension funds and other monies for clients. they may co-invest
      less than 5 % +/- in those properties.

      They loaded up on debt to buy other service compaines at the top of the market. They overpaid for those acquisitions and under capitalized on these expensive consolidations. The lost 60% of the revenue capacity ( BROKERS / elevator assets ) from trammell crow because the management is so brutally inept.

      They are going down the tube because the self dealing management reeks !

      Now senior professionals are getting crushed because as their stock tanks and their deferred comp is in jeapordy of evaporating !!

      Management Morons.

      BTW, They are broke. They are in violation of debt covenants. Their market cap is half of what they PAID for TC 18 months ago. And the assets of the company are going to start jumping ( Brokers are elavator assets ) ....

      • 2 Replies to dorkspaz
      • In violation of debt covenants? The only way you would know that would be if you were an insider in their finance group and that would necessarily mean you've just committed a crime with this careful what you post.

      • You are correct in your assessment of the situation. Im a broker and have been for 14 years. The only point I would disagree with is that brokers will start leaving. While we are the true assets of any commercial real estate firm - we only leave if there are better options OR if there are other firms that financially incentivise us to jump ship.

        CBRE is the biggest and best brand in the industry. For brokers who have to sell themselves to make their commission - a good brand is extremely important to a brokers success. If a CBRE broker were to leave...where can he go? JLL is the next best and they just bought Staubach....and Spaulding & slye a few years ago.

        I doubt the competition will stroke checks to get CBRE brokers to come - they are in just as bad a situation (in terms of revenue) as anyone else...where will they get the $?

        IF no $ and a lesser platform any broker worth their salt would be crazy to leave....

    • You are spot on...

    • Lenders would be foolish to call debt. CBG has very little "hard" assets to liquidate. Bad idea.

      CBG most likely to raise addtional equity, re-negotiate loans, cut costs.

      The best recovery chances for debt-holders is for CBG to stay in business. CBG can make fees from the massive de-leveraging and ownership transfers that are now in process.

      Bottom line is CBG, in spite of its short term problems, is THE 800 lb gorilla in global real estate services. The idea that someone would catch up to them in the current environment makes no sense.

      They will survive but not flourish for another 24 months. Then to the moon.

    • Trammel Crow is a developer, manager and possibly general partner (owner) of several or many of their developments. But I would assume most of the equity came from institutional investors when they do construct properties.

      Although...someone is responsible for the construction financing, mortgage, mezzanine debt on these assets. Typically the General Partner developer is. So all that debt could have been from financing the purchase or TC which includes property debt.

      Which if called....they'll have to liquid assets to pay off lenders.

    • bearstar... i believe mainly for acquisitions.. Trammell Crow within the last couple years and Insignia eary part of this decade

    • Why did they borrow so much money over the years?

      For acquisitions?
      To open more offices?

    • All true danielk. Its amazing to me the ignorance of people - buying and selling shares of companies without understanding what they even do and entering into mortgage contracts without understanding them either. Its really no wonder to me the mess we're in right now :))

    • get off the drugs .. they are impairing ur vision

    • I for one would be curious as to how you came to that conclusion. What do you think drives this company's revenue?

31.90+0.15(+0.47%)Aug 20 4:04 PMEDT

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