The ratings on CB Richard Ellis Services Inc. (CBRE) reflect the company's position as the world's largest commercial real estate (CRE) broker, its current modest debt service coverage and negative tangible equity, and its financial performance and debt service being dependent on highly cyclical CRE sales and leasing transaction volume. In December 2006, the company closed its acquisition of one of its largest competitors, Trammell Crow Co. (Trammell). The acquisition was a good strategic move for CBRE as Trammell's businesses complement CBRE's. The debt financing of the $2.2 billion acquisition has greatly increased debt leverage and reduced interest coverage, but 2007 projections for these measures remain well within acceptable parameters for the rating. The acquisition also resulted in substantial negative
