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4 Real Estate Stocks Outpacing Rivals

BOSTON (TheStreet) -- Financial stocks have been on a tear, with a big contribution to performance coming from commercial real-estate services firms, which suffered during the recession as office space demand shrank but then strongly rebounded.

The group's shares averaged a gain of 29% last year after an 84% jump in 2009. This year, they're up 2.3%, on par with the rise in the S&P 500 Index. Analysts are beginning to question how far and long the run can continue.

Standard &Poor's, which has a "neutral" fundamental outlook on the real-estate services industry, says a few stocks could be a long-term play, with some firms benefitting from a continued industry consolidation.

"We still look for the rebound to be tepid compared to the boom years," S&P wrote of the commercial real estate industry's prospects on Feb. 5. "We think continuing tight credit and difficulty accessing capital will limit pricing for commercial, as well as residential, real estate."

Commercial real estate firms buy and sell properties for clients as well as manage many of them after the sale.

Here are four companies in the industry, most of which hold a dominant position, and a breakdown of performance and analysts' expectations.


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The biggest player, with almost $8 billion in market capitalization, is CB Richard Ellis (CBG). Typical for the group, its shares plummeted 80% in 2008, but then gained 214% in 2009, ran up 51% in 2010 and are up 8% this year.

S&P gives CB Richard Ellis a "four- star buy" rating and projects earnings of $1.14 per share in 2010 and $1.35 in 2011. It says "we expect the company to benefit over the longer term from its large size and broad array of products and services relative to peers. We think the global reach of (its) operations helps generate economies of scale that few other real estate firms can match, helping create sustainable barriers to entry."

Goldman Sachs (GS) downgraded CB Richard Ellis to "neutral" from "buy" on Feb. 7.

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