The world’s two largest property services firms suffered share price collapses yesterday on Wall Street.

CB Richard Ellis’s shares plunged by nearly 15% to $5.39, while Jones Lang LaSalle’s dropped 9% to $26.98.

Both are struggling in the global property market meltdown and, in CBRE’s case, from having a high level of debt.

October has been a terrible month for both New York Stock Exchange-listed firms. CBRE’s shares began the month at $13.37 and fell to $8.44 in a week.

The drop followed a warning from analysts at Citi, who increased their risk rating for CBRE from ‘high’ to ‘speculative’ and lowered their price target from $15 to $10.50: ‘We believe a speculative risk rating is justified because of the significant deterioration in the commercial real estate market arising from the recent credit crunch, the possibility that fundamentals are getting worse, and CBRE’s high levels of debt and the risk that the company could breach its debt covenants – leading to a possible dilutive equity event or refinancing at higher interest rates,’ they said.

CBRE’s gross debt at the end of June was $2.5bn (£1.4bn) and its net debt was $2.25bn (£1.3bn), or 2.8 times its earnings before interest, tax, depreciation and amortisation (EBITDA) of $816m (£467m). This is a huge leap from a gross debt of $577m (£329m) three years ago.

CBRE is now valued at $1.09bn (£668m).

JLL’s shares have fallen from $43.48 at the beginning of October to $26.98, which values the company at $875m (£536m).

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