The Real Deal New York

CBRE and HFF lead, Colliers lags, in third-quarter earnings results

Cushman reported today $9M net income in third quarter but loss for year
By Adam Pincus | November 11, 2011 11:35AM

Los Angeles-based CBRE Group posted the largest net income for the third quarter and Pittsburgh-based Holliday Fenoglio Fowler posted the strongest net income relative to revenue, among the six major commercial brokerage companies that report earnings publicly, an analysis of the latest quarterly results by The Real Deal shows.

Meanwhile, Midtown-based commercial service firm Cushman & Wakefield, which reported earnings today through its parent company Exor, headquartered in Turin, Italy, had net income of $9 million on revenues of $520 million in the third quarter. It was the only company (excluding Grubb & Ellis which has not yet reported for the third quarter) to report a loss for the nine months of 2011. Through September, the company shows a loss of $13.5 million on revenues of $1.4 billion.

Cushman reported commission expenses growing by 23 percent, a bit more rapidly than commission and service fee revenues, which grew by 20.6 percent.

“This increase [in overall expenses] was primarily driven by an increase in employment expenses in support of [Cushman’s] strategic growth initiatives and an increase in accrued incentive compensation expenses resulting from improved year-over-year performance,” the company said in its earnings report.

The world’ largest commercial services firm, CBRE, reported last month net income of $64 million on revenues of $1.5 billion in the third quarter, helped in part by a 42 percent growth in property sales revenue in the United States, Canada and Latin America.

Investment advisory firm Holliday Fenoglio Fowler, although a much smaller company, was the most profitable relative to its size, by far. It reported net income of $11 million on revenue of $64 million, yielding a profit margin of 17 percent, compared with CBRE’s 4.2 percent.

Meanwhile Colliers International (the commercial division of Toronto-based FirstService Corp.) reported the weakest third quarter among the firms that published their results. While Cushman was still showing a loss for the year, it was profitable in the quarter. However Colliers barely eked out a positive quarter, reporting just $1.3 million in operating revenue on earnings of $253 million.

(Grubb & Ellis, based in Santa Ana, Calif., posted the worst results among the half-dozen firms that reported in the second quarter. At that time it showed a loss in the three months ending June 30 of $15 million on earnings of $138 million.)

Jones Lang LaSalle, the world’s second largest commercial firm, based in Chicago, had net income of $34 million on revenues of $903 million in the third quarter. The firm, like CBRE, reported robust growth in investments sales in the Americas. Revenue in the capital markets and hotels division rose by 44 percent compared with the same period last year, to $36 million in the Americas.

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