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Broker CB Richard Ellis Upgraded On Stock Price

The Associated Press

NEW YORK (AP) — A Goldman Sachs analyst upgraded real estate broker CB Richard Ellis Group Inc. on Monday, saying that although he expects transactions to remain low until 2010 and continued pressure on earnings, the stock's price makes it more attractive.

In a note to investors, analyst Sloan Bohlen said he was upgrading the broker to "neutral" less than a month after downgrading it to "sell" because of the recent big drop in its share price.

CB Richard Ellis stock gained 11.8 percent, or 86 cents, Monday afternoon to $8.16. It has dropped 22 percent since Bohlen downgraded its shares on May 11, but is still up 69 percent year-to-date.

However, Bohlen said he still expects transaction activity to stay low because of "constrained" sources of capital for commercial real estate. Research data shows transactions through April are off more than 80 percent from last year, he said.

Goverment officials have said delinquencies on commercial real estate loans remain a source of potential trouble for banks. A deepening recession could cause defaults on high-risk loans.

Last week, politicians and housing industry and finance executives told a congressional panel that the commercial lending markets remained strapped, while sector losses were likely to increase.

Bohlen also said he favors CB Richard Ellis' rival, Jones Lang LaSalle Inc., also rated "neutral," due to the broader geographic diversity of its sales and a less-leveraged balance sheet.

Jones Lang LaSalle shares jumped $3.42, or 9.8 percent, to $38.47.