Skip to Content
US Videos

2 Wide-Moat Stocks to Build Space For

These large real estate firms aren't trading at discounts, but their favorable growth dynamics and strong competitive positions make them ideal for investors' watchlists.

Mentioned: ,

Todd Lukasik: A recent research project on the commercial real estate industry prompted us to upgrade our views on two of the largest firms we cover, CBRE Group and JLL, also known as Jones Lang LaSalle. Consistent and reliable data in this industry is hard to come by, so we looked at a variety of data sources to piece together information to help us size the markets. We came to the conclusion that both firms combined have less than a 15% share of the traditional brokerage market of leasing and sales, and less than a 5% combined share of the corporate facilities outsourcing market. We think both firms still face very good growth opportunities, despite the fact that for over a decade they've grown at average double-digit rates.

In addition to being the largest firms, we think both CBRE Group and JLL are the best-positioned firms in the industry. We recently upgraded their moat ratings to wide from narrow. We think they have strong competitive positions based on the benefits of their global operating platforms, which provide benefits of scale, their respected brands, and, increasingly, customer-switching costs, especially in the corporate facilities outsourcing business.

Todd Lukasik does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.