This Quarterly Report on Form 10-Q for CB Richard Ellis Group, Inc. for the three months ended March 31, 2009, represents an update to the more detailed and comprehensive disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2008. Accordingly, you should read the following discussion in conjunction with the information included in our Annual Report on Form 10-K as well as the unaudited financial statements included elsewhere in this Quarterly Report on Form 10-Q.

In addition, some of the statements and assumptions in this Quarterly Report on Form 10-Q are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended, including, in particular, statements about our plans, strategies and prospects as well as estimates of industry growth for the second quarter and beyond. See "Forward-Looking Statements."

Overview

We are the world's largest commercial real estate services firm, based on 2008 revenue, with leading full-service operations in major metropolitan areas throughout the world. We offer a full range of services to occupiers, owners, lenders and investors in office, retail, industrial, multi-family and other types of commercial real estate. As of December 31, 2008, we operated more than 300 offices worldwide, excluding affiliate offices, with approximately 30,000 employees providing commercial real estate services under the "CB Richard Ellis" brand name and development services under the "Trammell Crow" brand name. Our business is focused on several service competencies, including commercial property and corporate facilities management, tenant representation, property/agency leasing, property sales, valuation, real estate investment management, commercial mortgage origination and servicing, capital markets (equity and debt) solutions, development services and proprietary research. We generate revenues from contractual management fees and on a per project or transactional basis. In 2006, we became the first commercial real estate services company included in the S&P 500. In 2007, 2008 and 2009, we were included on the Business Week list of 50 "Best in Class" companies across all industries, and the Fortune list of Fastest Growing U.S. Companies in 2007 and 2008 and its list of Most Admired Companies in 2009. In both 2008 and 2009, we were included in the Fortune 500 and remain the first and only commercial real estate services company ever included on the list. In 2009, the International Association of Outsourcing Professionals ranked us the #8 outsourcing company across all industries and #1 in commercial real estate services.

When you read our financial statements and the information included in this section, you should consider that we have experienced, and continue to experience, several material trends and uncertainties that have affected our financial condition and results of operations that make it challenging to predict our future performance based on our historical results. We believe that the following material trends and uncertainties are crucial to an understanding of the variability in our historical earnings and cash flows and the potential for continued variability in the future:

Economic trends and government policies directly affect our operations as well as global and regional commercial real estate markets generally. These include: overall economic activity and employment growth, interest rate levels, the availability of credit to finance transactions and the impact of tax and regulatory policies. Recently, concerns over the availability and cost of credit, the U.S. mortgage market, a declining real estate market globally, unemployment, the prospects of a global recession and geopolitical issues have contributed to increased volatility and diminished expectations for the economy and the credit, mortgage and real estate markets. Periods of economic slowdown or

recession, significantly rising interest rates, a declining employment level, a declining demand for real estate or the public perception that any of these events may occur, have affected and may continue to negatively affect the performance of many of our business lines. Weak economic conditions have resulted and may continue to result in a general decrease in transaction activity and declines in occupancy rates, rents and property values, which, in turn, have reduced and may continue to reduce revenue from property management fees and from brokerage commissions derived from property sales and leases. In addition, these challenging economic conditions could lead to continued declines in funds invested in commercial real estate and related assets. A sustained economic downturn and the absence of reasonably priced debt financing have reduced and may continue to reduce the amount of loan originations and related servicing by our commercial mortgage brokerage business.

Adverse changes in economic conditions have and will also continue to affect our compensation expense, which is generally structured to decrease in line with any decrease in revenues. Compensation is our largest expense and the sales and leasing professionals in our largest line of business, advisory services, generally are paid on a commission and bonus basis that correlates with our revenue performance. As a result, the negative effect on our operating margins during difficult market conditions is partially mitigated. In addition, in circumstances when economic conditions are particularly severe as is currently being experienced, our management has and will continue to look to improve operational performance by reducing discretionary bonuses, curtailing capital expenditures, adjusting overall staffing levels and implementing other measures to cut operating expenses. Notwithstanding these approaches, adverse global and regional economic changes remain one of the most significant risks to our financial condition and results of operations.

Beginning in 2003, economic conditions in the Americas, our largest segment in terms of revenue, rebounded from the economic downturn in 2001 and 2002. The recovery, which positively impacted the commercial real estate market generally, continued through the second quarter of 2007, helping to improve our Americas segment's revenue, particularly leasing and sales revenue. Since the third quarter of 2007, U.S. economic activity has progressively weakened due initially to stresses in the residential housing and financial sectors along with sharply rising energy costs. The slowing economic activity worsened into a recession affecting virtually all segments of the economy in 2008 and early 2009, as both consumer and business spending dropped sharply. The economic and capital market stresses led to a severe global financial disruption in 2008, which has continued in 2009. This disruption caused a freezing up of credit markets, pervasive loss of investor confidence and significant devaluation of assets of all types, from the riskiest to the most secure. These conditions also caused increasingly negative job growth and a deepening economic contraction throughout 2008 and early 2009. This has resulted in an accelerating decline in leasing activity and space absorption, rising vacancy rates and decreasing rents across the United States. U.S. investment sales activity also began falling sharply from peak levels in the second half of 2007 and remained weak through the first quarter of 2009. This decline reflected an absence of debt financing, weakening property fundamentals and continuing investor apprehension in the face of market uncertainty. These deteriorating conditions also adversely affected our Development Services and Global Investment Management businesses in the United States throughout 2008 and early 2009 as property values decreased sharply and disposition opportunities were markedly reduced. A rebound of our U.S. sales, leasing, Global Investment Management and Development Services businesses will depend in part upon credit markets returning to more normalized conditions, and the U.S. economy resuming its growth.

The weakening capital markets trend experienced in the United States began to manifest in the United Kingdom in late 2007, and in continental Europe beginning in early 2008. As a result, investment sales and investment management activities in Europe worsened progressively throughout 2008 and early 2009. The major European economies also entered into a recession in 2008 resulting in lower levels of leasing activity in 2008 and early 2009. The markets in Asia Pacific have also

experienced increasingly severe effects from the global credit market difficulties and worldwide economic recession, as reflected in lower investment sales and leasing activity in 2008 and early 2009.

We are highly leveraged and have significant debt service obligations. As of March 31, 2009, our total debt, excluding notes payable on real estate, was $2.7 billion. Although our management believes that the incurrence of long-term indebtedness has been important in the development of our business, including facilitating our acquisitions of Insignia and Trammell Crow Company, the cash flow necessary to service this debt is not available for other general corporate purposes, which may limit our flexibility in planning for, or reacting to, changes in our business and in the commercial real estate services industry.

Our level of indebtedness and the operating and financial restrictions in our debt agreements both place constraints on the operation of our business. On March 24, 2009, we entered into a second amendment and restatement to our credit agreement (the Credit Agreement) with a syndicate of banks led by Credit Suisse, as administrative and collateral agent, amending and restating our amended and restated credit agreement dated December 20, 2006. This amendment provides greater financial flexibility, allowing for a higher maximum leverage ratio, lower minimum interest coverage ratio, modifications to the EBITDA calculation for financial covenant purposes, and other provisions that give us greater capacity to proactively manage our balance sheet. Our Credit Agreement contains financial covenants that currently require us to maintain a minimum coverage ratio of EBITDA (as defined in the Credit Agreement) to total interest expense of 2.00x and a maximum leverage ratio of EBITDA (as defined in our Credit Agreement) to total debt less available cash of 4.25x. Our ability to meet these financial ratios can be affected by events beyond our control, and we cannot assure that we will be able to meet those ratios when required. If our EBITDA continues to decline in future periods as it has in recent periods, we may be unable to comply with these financial covenants under our Credit Agreement. We significantly reduced our cost structure during 2008 and are continuing to further reduce costs in 2009. As a result, our 2009 projections show that we will be well within compliance with the minimum coverage ratio and the maximum leverage ratio. If 2009 revenues are less than we have projected, we will take further actions within our control and believe that such actions, along with the modifications to our financial covenants, which were made as part of our Credit Agreement amendment, will allow us to remain in compliance with our financial covenants. Additionally, our management generally expects to look for opportunities in the future to reduce our debt as well as refinance our debt when available on attractive terms.

Our management historically has made significant use of strategic acquisitions to add new service competencies, to increase our scale within existing competencies and to expand our presence in various geographic regions around the world. For example, we enhanced our mortgage brokerage services through our 1996 acquisition of L.J. Melody & Company (now known as CBRE Capital Markets) and we significantly increased the scale of our investment management business through our 1995 acquisition of Westmark Realty Advisors (now known as CB Richard Ellis Investors), our 1997 acquisition of Koll Real Estate Services and our 1998 acquisition of the London-based firm Hillier Parker May & Rowden. Our 2003 acquisition of Insignia Financial Group, Inc. (Insignia) significantly increased the scale of our real estate advisory services and outsourcing services business lines in our Americas segment and also significantly increased our presence in the New York, London and Paris metropolitan areas.

In December 2006, we acquired Trammell Crow Company, our largest acquisition to date. The acquisition of Trammell Crow Company deepened our offering of outsourcing services for corporate and institutional clients, especially project and facilities management, strengthened our ability to

provide integrated management solutions across geographies, added our Development Services business and provided additional people, resources and expertise to offer real estate services throughout the United States.

Strategic in-fill acquisitions have also played a key role in expanding our geographic coverage and broadening and strengthening our service offerings. Our acquirees have generally been quality regional firms or niche specialty firms that complement our existing platform within a region, or affiliates in which, in some cases, we held an equity interest. In 2008, we completed 16 acquisitions with an aggregate purchase price of approximately $181 million. No acquisitions were completed during the three months ended March 31, 2009.

Although our management believes that strategic acquisitions can significantly decrease the cost, time and commitment of management resources necessary to attain a meaningful competitive position within targeted markets or to expand our presence within our current markets, our management also believes that most acquisitions will initially have an adverse impact on our operating and net income, both as a result of transaction-related expenditures and the charges and costs of integrating the acquired business and its financial and accounting systems into our own. For example, we incurred $200.9 million of transaction-related expenditures in connection with our acquisition of Insignia in 2003 (the Insignia Acquisition) and $196.6 million of transaction-related expenditures in connection with our acquisition of Trammell Crow Company in 2006. Transaction-related expenditures included severance costs, lease termination costs, transaction costs, deferred financing costs and merger-related costs, among others. We incurred our final transaction expenditures with respect to the Insignia Acquisition in the third quarter of 2004 and the Trammell Crow Company Acquisition in the fourth quarter of 2007. In addition, through March 31, 2009, we have incurred expenses of $41.9 million related to Insignia and $55.0 million related to Trammell Crow Company in connection with the integration of these companies' business lines, as well as accounting and other systems, into our own. During the three months ended March 31, 2009, we incurred $1.7 million of integration expenses, the majority of which were related to the acquisition of Trammell Crow Company. We expect to incur total integration expenses relating to past acquisitions of approximately $7 million during 2009, which include residual integration costs associated with our acquisition of Trammell Crow Company as well as similar costs related to a strategic in-fill acquisition in 2006.

We have made significant acquisitions of non-U.S. companies and we may acquire additional foreign companies in the future. As we increase our foreign operations through either acquisitions or organic growth, fluctuations in the value of the U.S. dollar relative to the other currencies in which we may generate earnings could adversely affect our business, financial condition and operating results. Our management team generally seeks to mitigate our exposure by balancing assets and liabilities that are denominated in the same currency and by maintaining cash positions outside the United States only at levels necessary for operating purposes. In addition, from time to time we enter into foreign currency exchange contracts to mitigate our exposure to exchange rate changes related to particular transactions and to hedge risks associated with the translation of foreign currencies into U.S. dollars. Due to the constantly changing currency exposures to which we are subject and the volatility of currency exchange rates, our management cannot predict the effect of exchange rate fluctuations upon future operating results. In addition, fluctuations in currencies relative to the U.S. dollar may make it more difficult to perform period-to-period comparisons of our reported results of operations.

Our international operations also are subject to, among other things, political instability and changing regulatory environments, which may adversely affect our future financial condition and results of operations. Our management routinely monitors these risks and related costs and evaluates the appropriate amount of resources to allocate towards business activities in foreign countries where such risks and costs are particularly significant.

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect reported amounts. The estimates and assumptions are based on historical experience and on other factors that management believes to be reasonable. Actual results may differ from those estimates. Critical accounting policies represent the areas where more significant judgments and estimates are used in the preparation of our consolidated financial statements. A discussion of such critical accounting policies, which include revenue recognition, our consolidation policy, goodwill and other intangible assets, real estate and income taxes can be found in our Annual Report on Form 10-K for the year ended December 31, 2008. There have been no material changes to these policies as of this Quarterly Report on Form 10-Q for the three months ended March 31, 2009.

Basis of Presentation

We report our operations through five segments. The segments are as follows:
(1) Americas, (2) EMEA, (3) Asia Pacific, (4) Global Investment Management and
(5) Development Services. The Americas consists of operations located in the United States, Canada and selected parts of Latin America. EMEA mainly consists of operations in Europe, while Asia Pacific includes operations in Asia, Australia and New Zealand. The Global Investment Management business consists of investment management operations in the United States, Europe and Asia. The Development Services business consists of real estate development and investment activities primarily in the United States, which were acquired in the Trammell Crow Company Acquisition.

Results of Operations

    The following table sets forth items derived from our consolidated
statements of operations for the three months ended March 31, 2009 and 2008
presented in dollars and as a percentage of revenue (dollars in thousands):

                                                    Three Months Ended March 31,
                                                   2009                    2008
   Revenue                                  $ 890,449     100.0 %  $ 1,230,925     100.0 %
   Costs and expenses:
        Cost of services                      553,419      62.2        704,446      57.2
        Operating, administrative and
        other                                 306,159      34.4        432,345      35.1
        Depreciation and amortization          25,392       2.8         23,802       2.0

        Total costs and expenses              884,970      99.4      1,160,593      94.3
   Operating income                             5,479       0.6         70,332       5.7
   Equity loss from unconsolidated
   subsidiaries                               (10,197 )    (1.2 )      (10,762 )    (0.8 )
   Interest income                              2,305       0.3          5,226       0.4
   Interest expense                            34,798       3.9         43,005       3.5
   Write-off of financing costs                29,255       3.3              -         -

   (Loss) income before (benefit)
   provision for income taxes                 (66,466 )    (7.5 )       21,791       1.8
   (Benefit) provision for income taxes       (12,047 )    (1.4 )        6,462       0.5

   Net (loss) income                          (54,419 )    (6.1 )       15,329       1.3
   Less: Net loss attributable to
   non-controlling interests                  (17,730 )    (2.0 )       (5,125 )    (0.4 )

   Net (loss) income attributable to CB
   Richard Ellis Group, Inc.                $ (36,689 )    (4.1 )% $    20,454       1.7 %

   EBITDA                                   $  38,404       4.3 %  $    88,497       7.2 %

EBITDA represents earnings before net interest expense, write-off of financing costs, income taxes, depreciation and amortization. Our management believes EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of EBITDA generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and acquisitions, which items may vary for different companies for reasons unrelated to overall operating performance. As a result, our management uses EBITDA as a measure to evaluate the operating performance of our various business lines and for other discretionary purposes, including as a significant component when measuring our operating performance under our employee incentive programs.

However, EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or GAAP, and when analyzing our operating performance, readers should use EBITDA in addition to, and not as an alternative for, net income as determined in accordance with GAAP. Because not all companies use identical calculations, our presentation of EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, EBITDA is not intended to be a measure of free cash flow for our management's discretionary use, as it does not consider certain cash requirements such as tax and debt service payments. The amounts shown for EBITDA also differ from the amounts calculated under similarly titled definitions in our debt instruments, which are further adjusted to reflect certain other cash and non-cash charges and are used to determine compliance with financial covenants and our ability to engage in certain activities, such as incurring additional debt and making certain restricted payments.

EBITDA is calculated as follows (dollars in thousands):

                                                           Three Months Ended
                                                               March 31,
                                                            2009         2008
       Net (loss) income attributable to CB Richard       $  (36,689 ) $ 20,454
       Ellis Group, Inc.
       Add:
          Depreciation and amortization                       25,392     23,802
          Interest expense                                    34,798     43,005
          Write-off of financing costs                        29,255          -
          (Benefit) provision for income taxes               (12,047 )    6,462
       Less:
          Interest income                                      2,305      5,226

       EBITDA                                             $   38,404   $ 88,497

Three Months Ended March 31, 2009 Compared to the Three Months Ended March 31, 2008

We reported a consolidated net loss of $36.7 million for the three months ended March 31, 2009 on revenue of $890.4 million as compared to consolidated net income of $20.5 million on revenue of $1.2 billion for the three months ended March 31, 2008.

Our revenue on a consolidated basis for the three months ended March 31, 2009 decreased by $340.5 million, or 27.7%, as compared to the three months ended March 31, 2008. This decrease was primarily driven by weak worldwide sales and leasing activity as well as lower appraisal revenue, all resulting from the continuation of challenging global economic conditions. During the three months ended March 31, 2008, we were still experiencing relatively strong results with particularly good growth in outsourcing and leasing revenues. While our outsourcing business continues to add new clients and expand existing relationships, its revenue declined slightly in the current year period as a result of client actions to restrain project spending and reduce outsourced staffing levels (which lowers reimbursement revenue) as well as loss of clients due to consolidations and bankruptcies. We expect this trend in our

outsourcing business to continue in the near term. Foreign currency translation had a $68.3 million negative impact on total revenue during the three months ended March 31, 2009.

Our cost of services on a consolidated basis decreased by $151.0 million, or 21.4%, during the three months ended March 31, 2009 as compared to the three months ended March 31, 2008. Our sales and leasing professionals generally are paid on a commission and bonus basis, which substantially correlates with our revenue performance. Accordingly, the decrease in revenue led to a corresponding decrease in commissions and bonuses. Foreign currency translation had a $41.9 million positive impact on cost of services during the three months ended March 31, 2009. Cost of services as a percentage of revenue increased from 57.2% for the three months ended March 31, 2008 to 62.2% for the three months ended March 31, 2009. This increase was primarily driven by a shift in the mix of revenues with outsourcing, including reimbursables, comprising a greater portion of the total.

Our operating, administrative and other expenses on a consolidated basis decreased by $126.2 million, or 29.2%, during the three months ended March 31, 2009 as compared to the three months ended March 31, 2008. This decrease was driven by cost reduction measures that started in 2008 and continued through the first quarter of 2009, which led to lower operating costs, particularly payroll-related, travel and marketing costs. The decrease was also driven by reduced incentive compensation expense, including bonuses and carried interest expense (within our Global Investment Management segment), resulting from lower business performance. Foreign currency translation had a $21.0 million positive impact on total operating expenses during the three months ended March 31, 2009. These reductions were partially offset by impairment charges incurred in our Development Services segment. In 2008 and continuing through the first quarter of 2009, we took aggressive actions to further improve efficiencies and contain costs in response to weakened macroeconomic market conditions. As a result of these actions, operating expenses as a percentage of revenue decreased from 35.1% for the three months ended March 31, 2008 to 34.4% for the three months . . .