CBRE Group Closes Debt Facility

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CBRE Group Inc. (NYSE:CBG - News), the world’s largest commercial real estate services company (on the basis of 2010 revenues), has recently closed its previously announced new incremental senior secured sterling term loan A-1 facility to the tune of approximately $300 million. The debt facility was increased from the earlier amount of $250 million due to strong interest from the existing bank syndicate of the company.

The new facility is scheduled to mature in May 2016 and would see participation from the company’s existing bank syndicate on terms almost similar to its existing term loan-A facility. The new term loan facility is expected to augment the financial flexibility of the company and enable it to capitalize on the current low interest rate regime.

Despite the continued debt-market crisis in Europe and uncertainty in the economic recovery in the U.S., management believed that CBRE Group was in the early stages of a cyclical recovery. The challenging macroeconomic environment and present market dislocations have further resulted in newer opportunities for CBRE Group, such as distressed assets marketing and service of failed commercial mortgage-backed securities loan funds, which in turn has fueled its growth engine.

CBRE Group is the global market leader in commercial real estate brokerage and advisory services for property leasing and sales, forecasting, valuations, origination and servicing of commercial mortgage loans, as well as project and real estate investment management. The company has hard-to-replicate intellectual capital and technology resources that develop and deliver superior analytical, research and client service tools to its professionals enabling it to meet diverse client needs.

Currently, we maintain our long-term ‘Neutral’ rating on CBRE Group, which presently has a Zacks #3 Rank that translates into a short-term ‘Hold’ recommendation. However, we have an ‘Outperform’ rating and a Zacks #2 Rank (short-term ‘Buy’) for NorthStar Realty Finance Corp. (NYSE:NRF - News), one of the peers of CBRE Group.

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