2. CBRE Group, Inc. (NYSE:CBRE)
Number of Hedge Fund Holders: 49
Ranking 2nd on our list of stocks for real estate investing for beginners is CBRE Group, Inc. (NYSE:CBRE), a global commercial real estate services and investment company. Its Advisory Services segment provides strategic advice, leasing, property sales, and valuation services. The Global Workplace Solutions segment offers facilities and project management services. The Real Estate Investments segment provides investment management and development services.
On February 15, CBRE Group, Inc. (NYSE:CBRE) reported a Q4 non-GAAP EPS of $1.38 and a revenue of $8.95 billion, outperforming Wall Street estimates by $0.20 and $510 million, respectively.
According to Insider Monkey’s fourth quarter database, 49 hedge funds were bullish on CBRE Group, Inc. (NYSE:CBRE), compared to 40 funds in the prior quarter. Harris Associates is the largest stakeholder of the company, with 16 million shares worth $1.5 billion.
Baron Real Estate Fund stated the following regarding CBRE Group, Inc. (NYSE:CBRE) in its fourth quarter 2023 investor letter:
“Our other real estate-related opportunities category includes three investment themes and various companies that do not fit neatly in our traditional REIT, residential-related real estate, and travel-related real estate categories. They currently include three investment themes: Commercial real estate services companies Examples: CBRE Group, Inc. (NYSE:CBRE) and Jones Lang LaSalle Incorporated.
We remain bullish on the long-term growth opportunity for the commercial real estate brokerage category because of structural and secular tailwinds that should benefit leading global companies such as CBRE and Jones Lang LaSalle.
Tailwinds include: • The outsourcing of commercial real estate: A growing number of companies are increasingly looking to outsource their commercial real estate needs. CBRE estimates that the overall facilities management market will be $1.9 trillion in 2024, representing a massive growth opportunity for large global commercial real estate services companies. • The institutionalization of commercial real estate: Institutional allocations to real estate continue to increase, in part due to real estate’s diversification, inflation protection, and stable long-term growth attributes. • Opportunities to increase market share: The commercial real estate industry remains highly fragmented and is likely to continue to consolidate. Customers tend to prefer commercial real estate companies that can provide a broad set of services. We believe CBRE and Jones Lang LaSalle are best positioned to drive market share gains given that they are the clear #1 and #2 commercial real estate services firms, respectively, and they have the capability to provide the full array of real estate offerings on a global scale.
CBRE and Jones Lang LaSalle have scale, product breadth, and leadership positions across their diversified real estate business segments. They continue to gain market share and are well positioned to capitalize on ample attractive acquisition opportunities in the years ahead given strong and liquid balance sheets. Though growth in certain segments of their businesses has slowed and is likely to remain under pressure in the months ahead due to the global economic slowdown, higher interest rates, and the likelihood of more restrictive bank lending, we believe both are attractively valued and present compelling return potential over the next few years.”
