CB Richard Ellis has written down the value of businesses it bought by $1.1bn (€873.3m), creating a $1bn loss for 2008.
In its full annual report, the world’s largest property services firm said that it had made the $1.1bn impairment against the goodwill value on its balance sheet.
It said that the credit crunch meant businesses it bought and built up are now worth less than the value at which they are held on the books.
The impairment charge meant that CBRE made an overall loss of $1bn in 2008. Earnings before this charge and other factors such as tax and interest (EBITDA) were $457m for the full year.
The US section of the business posted the largest writedown, $805m, of which most resulted from a markdown in the value of Trammell Crowe, which CBRE bought in 2006, and also a drop in fees from the capital markets business. Europe saw a writedown of $139m.
The company warned that it would be making a writedown when it reported full-year results on 10 February.
It was still calculating the size of the impairment charge, which was difficult because of the unprecedented turmoil in the financial markets. The size took investors by surprise, sending the stock 10% lower, but it recovered since.
CBRE pointed out that the charge is a non-cash item, so will not affect its business operations by using up cash, and that it does not affect any of its banking covenants.
Jones Lang LaSalle, which also filed its annual report, said its own assessment of the value of its businesses meant it had decided not to take a goodwill writedown.
Last year, JLL made 15 acquisitions, including Staubach in the US and Kemper’s in Germany. As a result, goodwill on the balance sheet rose from $694m in 2007 to $1.5bn last year.
