<PAGE>

================================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                         -----------------------------

                                   FORM 10-Q



[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the quarterly period ended June 30, 1999

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the Transition Period from__________________ TO __________________


                      Commission File Number 001 - 12231

                         ----------------------------


                        CB RICHARD ELLIS SERVICES, INC.

            (Exact name of registrant as specified in its charter)

               DELAWARE                                52-1616016
     (STATE OR OTHER JURISDICTION                   (I.R.S. EMPLOYER
   OF INCORPORATION OR ORGANIZATION)             IDENTIFICATION NUMBER)

     200 NORTH SEPULVEDA BOULEVARD
        EL SEGUNDO, CALIFORNIA                         90245-4380
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)               (ZIP CODE)

           (310) 563 - 8600                          NOT APPLICABLE
        (REGISTRANT'S TELEPHONE         (FORMER NAME, FORMER ADDRESS AND FORMAL
     NUMBER, INCLUDING AREA CODE)      FISCAL YEAR IF CHANGED SINCE LAST REPORT)

                  ------------------------------------------

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X] NO [_].


   Number of shares of common stock outstanding at July 30, 1999 was 20,799,200.
<PAGE>

               CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES

                                   FORM 10-Q

                                 June 30, 1999

                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                                                       PAGE
                                                                                                     ----
<S>                                                                                                  <C>
Item 1.  Consolidated Condensed Financial Statements
         Consolidated Balance Sheets as of June 30, 1999 (Unaudited) and December 31, 1998..........   3
         Unaudited Consolidated Statements of Operations for the three months ended
         June 30, 1999 and 1998 and for the six months ended June 30, 1999 and 1998.................   4
         Unaudited Consolidated Condensed Statements of Cash Flows for the six months
         ended June 30, 1999 and 1998...............................................................   5
         Notes to Consolidated Condensed Financial Statements.......................................   6
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations......  12
Item 3.  Quantitative and Qualitative Disclosures About Market Risk.................................  23

PART II - OTHER INFORMATION
Item 6.  Exhibits and Reports on Form 8-K...........................................................  24

Signatures..........................................................................................  25
</TABLE>

                                       2
<PAGE>

                CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
            (Dollars in thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                                          June 30,     December 31,
                                                                                            1999           1998
                                                                                         -----------   -------------
                                                                                         (Unaudited)
<S>                                                                                      <C>           <C>
                              A S S E T S
                              -----------
Current Assets:
 Cash and cash equivalents............................................................    $  12,553       $  19,551
 Receivables, less allowance of $13,262 and $13,348 for doubtful accounts
  at June 30, 1999 and December 31, 1998, respectively................................      139,678         131,512
 Deferred taxes.......................................................................        3,657           3,529
 Prepaid expenses.....................................................................        9,211          13,459
 Other assets.........................................................................        8,589           8,353
                                                                                          ---------       ---------
  Total current assets................................................................      173,688         176,404
Property and equipment, net...........................................................       59,439          58,366
Goodwill, net of accumulated amortization of $32,480 and $25,060 at
 June 30, 1999 and December 31, 1998, respectively....................................      443,515         445,124
Other intangible assets, net of accumulated amortization of $273,755 and $268,497
 at June 30, 1999 and December 31, 1998, respectively.................................       55,080          63,913
Prepaid pension expenses..............................................................       26,354          28,241
Deferred taxes........................................................................       21,977          23,100
Investment in and advances to unconsolidated subsidiaries.............................       40,250          31,633
Other assets, net.....................................................................       21,008          30,111
                                                                                          ---------       ---------
  Total assets........................................................................    $ 841,311       $ 856,892
                                                                                          =========       =========

    L I A B I L I T I E S  A N D  S T O C K H O L D E R S'  E Q U I T Y
    -------------------------------------------------------------------
Current Liabilities:
 Compensation and employee benefits...................................................    $  56,503       $  66,245
 Accounts payable and accrued expenses................................................       72,306         105,027
 Reserve for bonus and profit sharing.................................................       13,899          39,270
 Current maturities of long-term debt.................................................        3,781          12,343
 Current portion of capital lease obligations.........................................        1,954           2,862
                                                                                          ---------       ---------
  Total current liabilities...........................................................      148,443         225,747
Long-term debt, less current maturities:
 Senior term loans....................................................................      255,502         183,502
 Senior subordinated notes, less unamortized discount of $1,998 and $2,099 at
  June 30, 1999 and December 31, 1998, respectively...................................      173,002         172,901
 Other long-term debt.................................................................        6,915          17,288
                                                                                          ---------       ---------
  Total long-term debt................................................................      435,419         373,691
Other long-term liabilities...........................................................       64,939          60,737
                                                                                          ---------       ---------
  Total liabilities...................................................................      648,801         660,175

Minority interest.....................................................................        4,691           5,875

Commitments and contingencies

Stockholders' Equity:
 Preferred stock, $0.01 par value; 8,000,000 shares authorized; no shares issued or
  outstanding.........................................................................
 Common stock, $0.01 par value; 100,000,000 shares authorized; 20,794,165 and
  20,636,134 shares issued and outstanding as of June 30, 1999 and
   December 31, 1998, respectively....................................................          213             211
 Additional paid-in capital...........................................................      352,515         349,796
 Notes receivable from sale of stock..................................................       (7,548)         (5,654)
 Accumulated deficit..................................................................     (144,164)       (145,767)
 Accumulated other comprehensive income (loss)........................................       (4,314)          1,139
 Treasury stock, 488,900 shares outstanding as of June 30, 1999 and
  December 31, 1998...................................................................       (8,883)         (8,883)
                                                                                          ---------       ---------
  Total stockholders' equity..........................................................      187,819         190,842
                                                                                          ---------       ---------
  Total liabilities and stockholders' equity..........................................    $ 841,311       $ 856,892
                                                                                          =========       =========
</TABLE>

                                       3
<PAGE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES

                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
            (Dollars in thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                             Three Months Ended            Six Months Ended
                                                                    June 30,                     June 30,
                                                            -------------------------    -------------------------
                                                                1999          1998           1999         1998
                                                            -----------   -----------    -----------   -----------
<S>                                                         <C>           <C>            <C>           <C>
Revenue..................................................   $   277,167   $   255,267    $   510,368   $   430,411

Costs and Expenses:

   Commissions, fees and other incentives................       116,742       112,468        213,389       195,312

   Operating, administrative and other...................       133,877       111,963        255,361       191,791

   Merger-related and other nonrecurring charges.........             -        16,585              -        16,585

   Depreciation and amortization.........................         9,968         7,427         19,962        12,749
                                                            -----------   -----------    -----------   -----------

Operating income.........................................        16,580         6,824         21,656        13,974

Interest income..........................................           536           538          1,070         1,265

Interest expense.........................................        10,203         7,410         19,376        11,731
                                                            -----------   -----------    -----------   -----------

Income (loss) before provision for income tax............         6,913           (48)         3,350         3,508

Provision for income tax.................................         3,557         1,132          1,747         2,723
                                                            -----------   -----------    -----------   -----------
Net income (loss)........................................   $     3,356   $    (1,180)   $     1,603   $       785
                                                            ===========   ===========    ===========   ===========
Deemed dividend on preferred stock.......................   $         -   $         -    $         -   $    32,273
                                                            -----------   -----------    -----------   -----------
Net income (loss) applicable to common stockholders......   $     3,356   $    (1,180)   $     1,603   $   (31,488)
                                                            ===========   ===========    ===========   ===========

Basic earnings (loss) per share..........................         $0.16        $(0.06)         $0.08        $(1.61)
                                                            ===========   ===========    ===========   ===========

Weighted average shares outstanding for basic earnings

 (loss) per share........................................    21,032,324    20,146,007     20,974,583    19,519,371
                                                            ===========   ===========    ===========   ===========

Diluted earnings (loss) per share........................         $0.16        $(0.06)         $0.08        $(1.61)
                                                            ===========   ===========    ===========   ===========

Weighted average shares outstanding for diluted

 earnings (loss) per share...............................    21,125,074    20,146,007     21,063,019    19,519,371
                                                            ===========   ===========    ===========   ===========

</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       4
<PAGE>

                CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES

           UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                                                           Six Months Ended
                                                                                               June 30,
                                                                                         ---------------------
                                                                                           1999         1998
                                                                                         --------    ---------
<S>                                                                                       <C>         <C>
  Net income..........................................................................   $  1,603    $     785
  Adjustments to reconcile net income to net cash provided by operating activities:
    Depreciation and amortization excluding deferred financing costs..................     19,962       12,749
    Deferred compensation.............................................................      5,705        8,075
    Deferred taxes....................................................................        854          696
  Increase in receivables.............................................................     (8,554)      (1,504)
  Decrease in compensation and employee benefits payable..............................    (35,210)     (32,545)
  (Decrease) increase in accounts payable and accrued expenses........................    (23,861)       5,231

  Net change in other operating assets and liabilities................................     (4,724)       5,801
                                                                                         --------    ---------
       Net cash used in operating activities..........................................    (44,225)        (712)
                                                                                         --------    ---------

  Cash flows from investing activities:
    Purchases of property and equipment...............................................    (11,408)     (11,252)
    Sale of inventoried property......................................................      7,355            -
    Proceeds from collections on notes receivable.....................................        493          175
    Increase in intangible assets and goodwill........................................     (2,747)     (13,707)
    Acquisition of businesses including net assets acquired, intangibles
     and goodwill.....................................................................     (5,227)     (55,521)
    Increase in investments in/advances to unconsolidated subsidiaries................     (2,155)      (2,651)
    Other investing activities, net...................................................       (798)         515
                                                                                         --------    ---------

       Net cash used in investing activities..........................................    (14,487)     (82,441)
                                                                                         --------    ---------

  Cash flows from financing activities:
    Proceeds from senior term loans...................................................    120,000      158,000
    Repayment of senior term loans....................................................    (48,000)    (163,000)
    Proceeds from senior subordinated notes...........................................          -      172,804
    Repayment of inventoried property loan............................................     (7,093)           -
    Repayment of other loans..........................................................    (10,819)      (7,681)
    Payment of dividends payable......................................................          -       (5,000)
    Repurchase of preferred stock.....................................................          -      (72,418)
    Repayment of capital leases.......................................................       (513)        (973)
    Other financing activities, net...................................................     (1,146)      (4,110)
                                                                                         --------    ---------

       Net cash provided by financing activities......................................     52,429       77,622
                                                                                         --------    ---------

  Net decrease in cash and cash equivalents...........................................     (6,283)      (5,531)
  Cash and cash equivalents, at beginning of period...................................     19,551       47,181
  Effect of exchange rate changes on cash.............................................       (715)         (67)
                                                                                         --------    ---------

  Cash and cash equivalents, at end of period.........................................   $ 12,553    $  41,583
                                                                                         ========    =========

  Supplemental disclosure of cash flow information:
    Cash paid during the period for:
     Interest (none capitalized)......................................................   $ 21,260    $   9,198
     Income taxes, net of refunds (payments)..........................................   $  7,749    $  (2,240)
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       5
<PAGE>

                CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES


              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                  (Unaudited)


1.  Organization and Acquisitions


   Organization.  CB Richard Ellis Services, Inc. ("CB Richard Ellis") or (the
"Company") is a holding company that conducts its operations primarily through
its subsidiaries CB Richard Ellis, Inc., CB Commercial Limited (the United
Kingdom holding company, formerly known as REI Limited, "REI," for the various
Richard Ellis companies operating outside the United Kingdom and the United
States), L.J. Melody & Company ("L.J. Melody"), CB Richard Ellis Investors,
L.L.C. and CB Hillier Parker Limited, the United Kingdom holding company for
operations within the United Kingdom.  On November 25, 1996, CB Richard Ellis
completed an initial public offering (the "Offering") of 4,347,000 shares of
common stock, par value $.01 per share (the "Common Stock").  The net proceeds
from the Offering of $79.5 million were used to repay a portion of CB Richard
Ellis' then outstanding senior secured indebtedness and senior subordinated
indebtedness.

   Nature of Operations.  The Company provides a full range of real estate
services worldwide to commercial real estate tenants, owners and investors
through approximately 250 offices worldwide including but not limited to the
United States, Argentina, Australia, Brazil, Belgium, Canada, France, Germany,
Hong Kong, India, Italy, the Netherlands, New Zealand, People's Republic of
China, Portugal, Singapore, Spain, Switzerland, Taiwan and the United Kingdom.
The Company's services include (i) brokerage services whereby the Company
facilitates the sale and lease of properties ("Brokerage Services"); (ii)
transaction management, advisory services and facilities management services to
corporate real estate users ("Corporate Services"); (iii) property management
and related services ("Asset Services"); and (iv) capital market activities,
including mortgage banking, brokerage and servicing, investment management and
advisory services, investment property transactions (including acquisitions and
sales on behalf of investors), real estate market research and valuation and
appraisal services (collectively, "Financial Services").  The Company's diverse
client base includes local, national and multinational corporations, financial
institutions, pension funds and other tax exempt entities, local, state and
national governmental entities, and individuals.

   A significant portion of the Company's revenue is seasonal.  Historically,
this seasonality has caused the Company's revenue, operating income and net
income to be lower in the first two calendar quarters and higher in the third
and fourth calendar quarters of each year.  In addition, the Company's
operations are directly affected by actual and perceived trends in various
national and economic conditions, including interest rates, the availability of
credit to finance commercial real estate transactions and the impact of tax
laws.  To date, the Company does not believe that general inflation has had a
material impact upon its operations.  Revenues, commissions and other variable
costs related to revenues are primarily affected by real estate market supply
and demand rather than general inflation.

   Acquisitions.  Refer to the Company's financial statements included in the
Annual Report on Form 10-K for the year ended December 31, 1998 for a discussion
of the Company's acquisitions prior to 1999.

   The assets and liabilities of certain acquired companies, along with the
related goodwill, intangibles and indebtedness, are reflected in the
accompanying consolidated financial statements as of June 30, 1999.  The results
of operations of the acquired companies are included in the consolidated results
from the dates they were acquired.  The unaudited pro forma results of
operations of the Company for the six months ended June 30, 1998, assuming the
REI acquisition, which constituted the Company's only material acquisition in
the second quarter, had occurred on January 1, 1998, would have been as follows
(amounts in thousands except per share data):


        Revenue..................................... $446,725

        Net loss....................................   (8,186)

        Net loss applicable to common stockholders..  (40,459)

        Loss per share

          Basic.....................................    (1.99)

          Diluted...................................    (1.99)

                                       6
<PAGE>

                CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)

                                  (Unaudited)



   Net loss applicable to common stockholders includes a deemed dividend of
$32.3 million on the repurchase of the Company's preferred stock.  The pro forma
results do not necessarily represent results which would have occurred if the
acquisitions had taken place on the date assumed above, nor are they indicative
of the results of future combined operations.  The amounts are based upon
certain assumptions and estimates, and do not reflect any benefit from economies
which might be achieved from combined operations.  Further, REI historical
results for the first three months of 1998 include certain nonrecurring
adjustments.

2.  Impairment of Long-Lived Assets

   The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of ("SFAS No. 121"), in March 1995.  In
accordance with SFAS No. 121, long-lived assets and certain intangibles held and
used by the Company will be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable.  Further, the Company periodically evaluates the recoverability of
the carrying amount of goodwill and other intangible assets in accordance with
SFAS No. 121.  In this assessment, the Company considers macro market conditions
and trends in the Company's relative market position, its capital structure,
lender relationships and the estimated undiscounted future cash flows associated
with these assets.  If any of the significant assumptions inherent in this
assessment materially change due to market, economic and/or other factors, the
recoverability is assessed based on the revised assumptions and resultant
undiscounted cash flows.  If such analysis indicates impairment, it would be
recorded in the period such changes occur based on the fair value of the
goodwill and other intangible assets.

3.  Goodwill and Other Intangible Assets

   Goodwill at June 30, 1999 consisted of $424.2 million related to the 1995
through 1999 acquisitions which is being amortized over an estimated useful life
of 30 years and $19.3 million related to the Company's original acquisition in
1989 which is being amortized over an estimated useful life of 40 years.

   Other intangible assets at June 30, 1999 included approximately $7.6 million
of deferred financing costs and $47.5 million of intangibles other than goodwill
stemming from the 1995 through 1999 acquisitions.

4.  Employee Benefit Plans

   In 1994 the Company implemented the Deferred Compensation Plan ("DCP").
Under the DCP, a select group of management and highly compensated employees can
defer the payment of all or a portion of their compensation (including any
bonus).  The DCP permits participating employees to make an irrevocable election
at the beginning of each year to receive amounts deferred at a future date
either in cash, which is an unsecured long term liability of the Company, or in
newly issued shares of Common Stock of the Company which elections are recorded
as additions to Stockholders' Equity.  Effective May 1, 1999, the Company
revised the DCP to add insurance products which function like mutual funds as an
investment alternative.  For the six months ended June 30, 1999, approximately
$5.6 million and $0.7 million were deferred in cash (including interest) and
stock, respectively.  The accumulated deferrals as of June 30, 1999, were
approximately $22.5 million in cash (including interest and capital
appreciation) and $10.7 million in stock for a total of $33.2 million, all of
which was charged to expense in the period of deferral.

   The Company, through the acquisition of Hillier Parker, maintains a
contributory defined benefit pension plan ("DBP") to provide retirement benefits
to former Hillier Parker employees participating in the plan.  The Company's
funding policy for DBP is to make the minimum annual contributions required by
applicable regulations.  Reference is made to Note 6 to the consolidated
financial statements included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998 for further discussion.  As of June 30, 1999,
DBP plan assets exceed DBP plan liabilities by approximately $26.4 million and
the net prepaid pension asset is reflected in the accompanying balance

                                       7
<PAGE>

sheet.


                CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)

                                  (Unaudited)


5.  Debt

   In May 1998, the Company amended its revolving credit facility with a group
of banks to provide up to $400.0 million for five years, subject to mandatory
reductions of $40.0 million, $80.0 million and $80.0 million on December 31,
1999, 2000 and 2001, respectively.  The amount outstanding under this facility
was $239.0 million as of June 30, 1999 which is included in the accompanying
balance sheet.  Interest rate alternatives include Bank of America's reference
rate plus 0.50% and LIBOR plus 1.50%.  The weighted average rate on the amounts
outstanding at June 30, 1999 was 6.74%.

   The revolving credit facility contains numerous restrictive covenants that,
among other things, limit the Company's ability to incur or repay other
indebtedness, make advances or loans to subsidiaries and other entities, make
capital expenditures, incur liens, enter into mergers or effect other
fundamental corporate transactions, sell its assets, or declare dividends. In
addition, the Company is required to meet certain ratios relating to its
adjusted net worth, level of indebtedness, fixed charges and interest coverage.
An amendment to the revolving credit facility has been executed by the banks and
the Company which resolves various technical issues.

   In May 1998, the Company sold $175.0 million of 8.875% Senior Subordinated
Notes ("Subordinated Notes") due on June 1, 2006.  The Subordinated Notes are
redeemable in whole or in part after June 1, 2002 at 104.438% of par on that
date and at declining prices thereafter.  On or before June 1, 2001, up to 35.0%
of the issued amount may be redeemed at 108.875% of par plus accrued interest
solely with the proceeds from an equity offering.  The amount included in the
accompanying balance sheet for the Subordinated Notes less unamortized discount
was $173.0 million as of June 30, 1999.

6.  Income Taxes

   The provisions for income taxes for the six month periods ended June 30, 1999
and 1998 were computed in accordance with Interpretation No. 18 of APB opinion
No. 28 on reporting taxes for interim periods and were based on projections of
total year pre-tax income.  In accordance with APB opinion No. 23, no U.S. taxes
have been provided on earnings of foreign subsidiaries because it is the intent
of the Company to permanently re-invest the unremitted earnings of foreign
subsidiaries.  Reference is made to Note 10 to the consolidated financial
statements included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1998 for a discussion of the Company's deferred taxes
including net operating loss carryforwards.

7.  Commitments and Contingencies

   In December 1996, GMH Associates, Inc. ("GMH") filed a lawsuit against
Prudential Realty Group ("Prudential") and the Company in Superior Court of
Pennsylvania, Franklin County, alleging various contractual and tort claims
against Prudential, the seller of a large office complex, and the Company, its
agent in the sale, contending that Prudential breached its agreement to sell the
property to GMH, breached its duty to negotiate in good faith, conspired with
the Company to conceal from GMH that Prudential was negotiating to sell the
property to another purchaser and that Prudential and the Company misrepresented
that there were no other negotiations for the sale of the property.  Following a
non-jury trial, the court rendered a decision in favor of GMH and against
Prudential and the Company, awarding GMH $20.3 million in compensatory damages,
against Prudential and the Company jointly and severally, and $10.0 million in
punitive damages, allocating the punitive damage award $7.0 million as against
Prudential and $3.0 million as against the Company.  Following the denial of
motions by Prudential and the Company for a new trial, a judgment was entered on
December 3, 1998.  Prudential and the Company have filed an appeal of the
judgment.  The Company believes that it has adequate insurance coverage for the
compensatory portion of the judgment and adequate reserves for the punitive
portion, as well as potential indemnity claims from Prudential for the entire
judgment.

                                       8
<PAGE>

                CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)

                                  (Unaudited)


   In August 1993, a former commissioned sales person of the Company filed a
lawsuit against the Company in the Superior Court of New Jersey, Bergen County,
alleging gender discrimination and wrongful termination by the Company. On
November 20, 1996, a jury returned a verdict against the Company, awarding $6.5
million in general and punitive damages to the plaintiff.  Subsequently, the
trial court awarded the plaintiff $638,000 in attorneys' fees and costs.
Following denial by the trial court of the Company's motions for new trial,
reversal of the verdict and reduction of damages, the Company filed an appeal of
the verdict and requested a reduction of damages.  On March 9, 1999 the
appellate court ruled in the Company's favor, reversed the trial court decision
and ordered a new trial.  In June of 1999, the Supreme Court of New Jersey
agreed to review the Appellate Court's decision.  Based on available reserves,
cash and anticipated cash flows, the Company believes that the ultimate outcome
will not have an impact on the Company's ability to carry on its operations.

   The Company is a party to a number of pending or threatened lawsuits arising
out of, or incident to, its ordinary course of business.  Based on available
cash and anticipated cash flows, the Company believes that the ultimate outcome
will not have an impact on the Company's ability to carry on its operations.
Management believes that any liability to the Company that may result from
disposition of these lawsuits will not have a material effect on the
consolidated financial position or results of operations of the Company.

8.  Stockholders' Equity

   The translation of foreign currencies into U.S. dollars is performed for
balance sheet accounts using current exchange rates in effect at the balance
sheet date and for revenue and expense accounts using an average exchange rate
for the period.  The cumulative gains or losses resulting from translations are
included in stockholders' equity.

9.  Comprehensive Income

   Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, Reporting of Comprehensive Income.
Comprehensive income is a measure of all changes in equity of the Company that
result from recognized transactions and other economic events of the period
excluding investments in or distributions from the Company.  All components of
comprehensive income are reported under the provisions of SFAS No. 130.  For the
six months ended June 30, 1999, total comprehensive loss was $3.9 million which
includes foreign currency translation loss of $5.5 million.  For the six months
ended June 30, 1998, total comprehensive loss was $0.4 million which includes
foreign currency translation loss of $1.2 million.

10.  Per Share Information

   Basic and diluted earnings (loss) per share was computed by dividing net
income (loss), less preferred dividend requirements as applicable, by the
weighted average number of common shares outstanding during each period.  When
the Company has a net loss applicable to common stockholders for a particular
reporting period, the stock options and warrants outstanding are excluded from
the computation of diluted loss per share as they are anti-dilutive.

                                       9
<PAGE>

                CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)

                                  (Unaudited)

   The following is a calculation of basic and diluted earnings (loss) per share
   (in thousands, except share and per share data):

<TABLE>
<CAPTION>

                                                                             Three Months Ended June 30,
                                                         -----------------------------------------------------------------------
                                                                       1999                                 1998
                                                         ---------------------------------   -----------------------------------
                                                                                 Per-Share                             Per-Share
                                                          Income      Shares      Amount       Loss        Shares       Amount
                                                         --------    --------   ----------   ---------    --------    ----------
<S>                                                       <C>        <C>         <C>           <C>        <C>          <C>
Basic earnings (loss) per share
 Net income (loss).....................................   $ 3,356   21,032,324   $    0.16    $ (1,180)   20,146,007   $   (0.06)
                                                          =======   ==========   =========    ========    ==========   =========
Diluted earnings (loss) per share
 Net income (loss).....................................   $ 3,356   21,125,074   $    0.16    $ (1,180)   20,146,007   $   (0.06)
                                                          =======   ==========   =========    ========    ==========   =========

<CAPTION>
                                                                             Six Months Ended June 30,
                                                          ---------------------------------------------------------------------
                                                                     1999                                  1998
                                                          -------------------------------   -----------------------------------
                                                                                Per-Share    Income                  Per-Share
                                                           Income    Shares      Amount      (Loss)       Shares       Amount
                                                          --------  --------   ----------   ---------    --------    ----------
<S>                                                       <C>        <C>         <C>           <C>        <C>          <C>
Basic earnings (loss) per share
 Net income............................................   $ 1,603                             $    785
 Deemed dividend on preferred stock repurchase.........         -                              (32,273)
                                                          -------                             --------
 Net income (loss) applicable to common stockholders...   $ 1,603   20,974,583   $    0.08    $(31,488)   19,519,371   $  (1.61)
                                                          =======   ==========   =========    ========    ==========   ========
Diluted earnings (loss) per share
  Net income (loss) applicable to common stockholders     $ 1,603   21,063,019   $    0.08    $(31,488)   19,519,371   $  (1.61)
                                                          =======   ==========   =========    ========    ==========   ========
</TABLE>

   The following items were not included in the computation of diluted earnings
(loss) per share because their effect was anti-dilutive for the quarters ended
June 30:

<TABLE>
<CAPTION>
                               Three Months Ended June 30,            Six Months Ended June 30,
                          ------------------------------------   -----------------------------------
                                1999                1998               1999               1998
                          -----------------   ----------------   ----------------   ----------------
<S>                       <C>                 <C>                <C>                <C>
 Stock options
   Outstanding.........           1,889,786          3,047,563          1,947,999          3,047,563
   Price ranges........   $    19.44-$37.31   $    0.38-$38.50   $   18.04-$37.31   $    0.38-$38.50
   Expiration ranges...    11/24/06-7/22/08    4/18/99-5/18/08    4/15/06-7/22/08    4/18/99-5/18/08

 Stock warrants
   Outstanding.........             599,967            599,967            599,967            599,967
   Price                  $           30.00   $          30.00   $          30.00   $          30.00
   Expiration..........             8/28/04            8/28/04            8/28/04            8/28/04
</TABLE>

11.  Reclassification

   Certain reclassifications, which do not have any effect on net income, have
been made to certain prior period financial statements to conform to the June
1999 presentation.

                                       10
<PAGE>

                CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)

                                  (Unaudited)


12.    Industry Segments

   The following tables summarize the revenue, cost and expenses, and operating
income by operating segment for the periods ended June 30, 1999 and 1998.

<TABLE>
<CAPTION>
                                                      Three Months Ended         Six Months Ended
                                                             June 30,                 June 30,
                                                     ---------------------     ---------------------
                                                       1999         1998         1999        1998
                                                     --------     --------     --------     --------
<S>                                                 <C>          <C>          <C>          <C>
Revenue
   Brokerage Service.............................    $143,607     $142,610     $263,133     $235,579
   Corporate Services............................      20,382       17,294       37,360       29,774
   Asset Services................................      35,633       29,017       68,236       51,478
   Financial Services............................      77,545       66,346      141,639      113,580
                                                     --------     --------     --------     --------
                                                     $277,167     $255,267     $510,368     $430,411
                                                     ========     ========     ========     ========

Operating income (loss)..........................
   Brokerage Service.............................    $ 10,579     $ 20,139     $ 15,814     $ 25,612
   Corporate Services............................      (1,348)      (1,516)      (2,892)      (2,734)
   Asset Services................................       1,523          488        2,365        1,276
   Financial Services............................       5,826        4,298        6,369        6,405
   Merger-related and other nonrecurring costs...           -      (16,585)           -      (16,585)
                                                     --------     --------     --------     --------
                                                       16,580        6,824       21,656       13,974

Interest income..................................         536          538        1,070        1,265
Interest expense.................................      10,203        7,410       19,376       11,731
                                                     --------     --------     --------     --------
Income (loss) before provision for income tax....    $  6,913     $    (48)    $  3,350     $  3,508
                                                     ========     ========     ========     ========

Geographic Information

Revenue
   United States.........                            $215,236     $227,397     $395,637     $402,541
   All other countries...                              61,931       27,870      114,731       27,870
                                                     --------     --------     --------     --------
                                                     $277,167     $255,267     $510,368     $430,411
                                                     ========     ========     ========     ========
</TABLE>


   In July 1999, the Company announced that it will change its segment reporting
from the current four segments to three new segments.

                                       11
<PAGE>

                CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Introduction -

   CB Richard Ellis Services, Inc. through its direct and indirect subsidiaries
(collectively the "Company") provides real estate services through
approximately 250 offices worldwide including but not limited to the United
States, Argentina, Australia, Brazil, Belgium, Canada, France, Germany, Hong
Kong, India, Italy, the Netherlands, New Zealand, People's Republic of China,
Portugal, Singapore, Spain, Switzerland, Taiwan, and the United Kingdom.  Over
the course of the last five years the Company, in recognition of a rapidly
changing structural and economic environment, has changed from being almost
exclusively a traditional U.S. real estate broker to being a diversified global
real estate services firm.  Its outsourcing, transaction management, advisory
services and facilities management services to corporate real estate user
services (referred to as "Corporate Services"), property management and
related services ("Asset Services") and capital market activities, including
mortgage banking, brokerage and servicing, investment management and advisory
services, investment property transactions (including acquisitions and sales on
behalf of investors), real estate market research and valuation and appraisal
services (collectively "Financial Services") are either the largest or one of
the largest such businesses in both the world and the United States and in the
aggregate accounted for more than $488.1 million in 1998 revenue.  The Company's
core brokerage business, commercial property sales and leasing ("Brokerage
Services") accounted for approximately $546.4 million in 1998 revenue and is
one of the largest such businesses in the United States.

   As part of its strategic emphasis in developing a worldwide business, the
Company has, since the beginning of 1995, completed multiple acquisitions, an
$87.0 million public offering of common stock and a $175.0 million offering of
senior subordinated notes.  The Company is continually assessing acquisition
opportunities as part of its growth strategy.  Because of the substantial non-
cash and non-tax deductible goodwill and intangible amortization charges
incurred by the Company in connection with acquisitions subject to purchase
accounting and because of interest expense associated with acquisition
financing, past acquisitions have and future acquisitions may adversely affect
net income. In addition, during the first six months following an acquisition,
the Company believes there are generally significant one-time costs relating to
integrating information technology, accounting and management services and
rationalizing personnel levels (a portion of which the Company intends to
reflect as a statement of operations charge or as part of the purchase price at
the time of the acquisition as appropriate).  Management's strategy is to pursue
acquisitions that are expected to be accretive to income before interest expense
and provision for amortization of goodwill and intangibles, if any, and to
operating cash flows (excluding the costs of integration).

   Revenue from Brokerage Services and the investment properties component of
Financial Services, which together constitute a substantial majority of the
Company's revenue, is largely transactional in nature and subject to economic
cycles.  However, the Company's significant size, geographic coverage, number of
transactions and large continuing client base tend to minimize the impact of
economic cycles on annual revenue and create what the Company believes is
equivalent to a recurring stream of revenue.  Between 50.0% and 55.0% of the
costs and expenses associated with Brokerage Services and the investment
properties component of Financial Services are directly correlated to revenue
while approximately 25.0% of the costs and expenses of Corporate Services, Asset
Services and Financial Services, excluding investment properties, are directly
correlated to revenue.

   A significant portion of the Company's revenue is seasonal.  Historically,
this seasonality has caused the Company's revenue, operating income and net
income to be lower in the first two calendar quarters and higher in the third
and fourth calendar quarters of each year.  In addition, the Company's
operations are directly affected by actual and perceived trends in various
national and economic conditions, including interest rates, the availability of
credit to finance commercial real estate transactions and the impact of tax
laws.  To date, the Company does not believe that general inflation has had a
material impact upon its operations. Revenues, commissions and other variable
costs related to revenues are primarily affected by real estate market supply
and demand rather than general inflation.

                                       12
<PAGE>

Results of Operations -

   Since 1992, the Company's results have benefitted from its ability to take
advantage of a significant and ongoing recovery in U.S. commercial real estate
markets and the generally rising occupancy and rental levels, and, as a result,
property values as well as from significant expansion into international
markets.  For the first two quarters of 1999 there are some signs that this
recovery has reached a plateau in North America although management does not
believe that this is the case.  Since brokerage fees are typically based upon a
percentage of transaction value, and property management fees are typically
based upon a percentage of total rent collections, recent occupancy and rental
rate increases at the property level have generated an increase in brokerage and
property management fees to the Company.  The following unaudited table sets
forth items derived from the Company's Consolidated Statements of Operations for
each of the periods presented in dollars and as a percentage of revenue.

<TABLE>
<CAPTION>
                                         Three Months Ended June 30,              Six Months Ended June 30,
                                    ------------------------------------     ------------------------------------
                                          1999                1998                 1999                1998
                                    ----------------    ----------------     ----------------    ----------------
                                                               (Dollars in thousands)
<S>                                 <C>        <C>      <C>         <C>       <C>        <C>      <C>        <C>

Revenue..........................   $277,167   100.0%   $255,267   100.0%    $510,368   100.0%   $430,411   100.0%
Costs and expenses:
 Commissions, fees and other
  incentives.....................    116,742    42.1     112,468    44.0      213,389    41.8     195,312    45.4
 Operating, administrative
  and other......................    133,877    48.3     111,963    43.9      255,361    50.0     191,791    44.5
 Merger-related and other
  nonrecurring costs.............          -       -      16,585     6.5            -       -      16,585     3.9
 Depreciation and amortization...      9,968     3.6       7,427     2.9       19,962     3.9      12,749     3.0
                                    --------   -----    --------   -----     --------   -----    --------   -----

Operating income.................     16,580     6.0       6,824     2.7       21,656     4.3      13,974     3.2
Interest income..................        536     0.2         538     0.2        1,070     0.2       1,265     0.3
Interest expense.................     10,203     3.7       7,410     2.9       19,376     3.8      11,731     2.7
                                    --------   -----    --------   -----     --------   -----    --------   -----

Income (loss) before provision for
 income tax                            6,913     2.5         (48)    0.0        3,350     0.7       3,508     0.8

Provision for income tax               3,557     1.3       1,132     0.4        1,747     0.4       2,723     0.6
                                    --------   -----    --------   -----     --------   -----    --------   -----

Net income (loss)                   $  3,356     1.2%   $ (1,180)   (0.4)%   $  1,603     0.3%   $    785     0.2%
                                    ========   =====    ========   =====     ========   =====    ========   =====
EBITDA excluding merger-related
   and other nonrecurring costs     $ 26,548     9.6%   $ 30,836    12.1%    $ 41,618     8.2%   $ 43,308    10.1%
                                    ========   =====    ========   =====     ========   =====    ========   =====
</TABLE>

Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 1998

   The Company reported a consolidated net income of $3.4 million, or $0.16
diluted earnings per share for the three months ended June 30, 1999 on revenues
of $277.2 million compared to a consolidated net loss of $1.2 million, or $0.06
diluted loss per share on revenues of $255.3 million for the three months ended
June 30, 1998.  Because these results were well below expectations the Company
implemented a reduction in force program geared primarily towards managers which
on a full year basis is expected to reduce expenses by $11 million
(approximately $4 million in 1999).

   Revenues on a consolidated basis were $277.2 million, an increase of $21.9
million or 8.6% for the three months ended June 30, 1999, compared to the three
months ended June 30, 1998.  The overall increase reflected the full
contribution from Hillier Parker ("HP") and various other 1998 acquisitions.
The Company continued to benefit from its global market presence by leveraging
the ability to deliver comprehensive real estate services into new businesses.
However, revenues for the second quarter of 1999 continue to be affected by the
liquidity problems which began in

                                       13
<PAGE>

         CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES (continued)


September of 1998 in the global capital markets in general and the Commercial
Mortgage-Backed Securities ("CMBS") market in particular. In addition, the
Company experienced an unexpected slowdown in the volume of lease transactions
which it believes is temporary.



   Commissions, fees and other incentives on a consolidated basis were $116.7
million, an increase of $4.3 million or 3.8% for the three months ended June 30,
1999, compared to the three months ended June 30, 1998.  The increase in these
costs is attributable to the increase in revenue since most of the Company's
sales professionals are compensated based on revenue.  As a percentage of
revenue, commissions, fees and other incentives were 42.1% for the three months
ended June 30, 1999, compared to 44.0% for the three months ended June 30, 1998.
The decrease as a percentage of revenue is primarily due to the acquisition of
HP which generally does not operate under a commission-based compensation
program.

   Operating, administrative and other on a consolidated basis was $133.9
million, an increase of $21.9 million or 19.6% for the three months ended June
30, 1999, compared to the three months ended June 30, 1998.  As a percentage of
revenue, operating, administrative and other were 48.3% for the three months
ended June 30, 1999 compared to 43.9% for the three months ended June 30, 1998.
The increase in amount and percentage is primarily due to the acquisition of HP,
which has higher fixed operating expenses.  Due to the integration of HP,
operating, administrative and other as a percentage of revenue has increased,
while commissions, fees and other incentives as a percentage of revenue has
decreased.

   Consolidated interest income was $0.5 million for the three months ended June
30, 1999, and 1998.

   Consolidated interest expense was $10.2 million, an increase of $2.8 million
or 37.7% for the three months ended June 30, 1999, as compared to the three
months ended June 30, 1998.  The increase primarily resulted from the May 1998
issuance of senior subordinated notes, which were used to finance business
acquisitions.

   Provision for income tax on a consolidated basis was $3.6 million for the
three months ended June 30, 1999, as compared to the provision for income tax of
$1.1 million for the three months ended June 30, 1998.   The increase is
primarily due to increase in earnings attributable to HP and various 1998
acquisitions.  The effective tax rate changed in 1999, primarily as a result of
additional nonamortizable goodwill from recent acquisitions.  In early 1998 the
Company repurchased its outstanding preferred stock which triggered a limitation
on the annual amount of net operating loss ("NOL") it can use to offset future
U.S. taxable income.  This limitation does not affect the way taxes are reported
for financial reporting purposes, but it will affect the timing of the actual
amount of taxes paid on an annual basis.

   EBITDA was $26.5 million for the three months ended June 30, 1999, as
compared to $30.8 million for the three months ended June 30, 1998.  EBITDA
effectively removes the impact of certain non-cash and nonrecurring charges on
income such as depreciation and the amortization of intangible assets relating
to acquisitions, merger-related and other nonrecurring charges, extraordinary
items, and income taxes.  Management believes that the presentation of EBITDA
will enhance a reader's understanding of the Company's operating performance and
ability to service debt as it provides a measure of cash (subject to the payment
of interest and income taxes) generated that can be used by the Company to
service its debt and other required or discretionary purposes.  Net cash that
will be available to the Company for discretionary purposes represents remaining
cash after debt service and other cash requirements, such as capital
expenditures, are deducted from EBITDA.  EBITDA should not be considered as an
alternative to (i) operating income determined in accordance with GAAP or (ii)
operating cash flow determined in accordance with GAAP.

Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998

   The Company reported a consolidated net income of $1.6 million, or $0.08
diluted earnings per share for the six months ended June 30, 1999 on revenues of
$510.4 million compared to a consolidated net income of $0.8 million on revenues
of $430.4 million for the six months ended June 30, 1998.  The net loss
applicable to common stockholders,

                                       14
<PAGE>

         CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES (continued)


including the deemed dividend resulting from the accounting treatment of the
preferred stock repurchase, was $31.5 million, or $1.61 diluted loss per share
for the six months ended June 30, 1998.

   Revenues on a consolidated basis were $510.4 million, an increase of  $80.0
million or 18.6% for the six months ended June 30, 1999, compared to the six
months ended June 30, 1998.  The overall increase reflected the full
contribution from REI and HP and various other 1998 acquisitions.  The Company
continued to benefit from its global market presence by leveraging the ability
to deliver comprehensive real estate services into new businesses.  However,
revenues for the first half of 1999 continue to be affected by the liquidity
problems which began in September of 1998 in the global capital markets in
general and the CMBS market in particular.

   Commissions, fees and other incentives on a consolidated basis were $213.4
million, an increase of  $18.1 million or 9.3% for the six months ended June 30,
1999, compared to the six months ended June 30, 1998.  The increase in these
costs is attributable to the increase in revenue since most of the Company's
sales professionals are compensated based on revenue.  As a percentage of
revenue, commissions, fees and other incentives were 41.8% for the six months
ended June 30, 1999, compared to 45.4% for the six months ended June 30, 1998.
The decrease as a percentage of revenue is primarily due to the acquisitions of
REI and HP which generally do not operate under a commission-based compensation
program.

   Operating, administrative and other on a consolidated basis was $255.4
million, an increase of $63.6 million or 33.1% for the six months ended June 30,
1999, compared to the six months ended June 30, 1998.  As a percentage of
revenue, operating, administrative and other were 50.0% for the six months ended
June 30, 1999 compared to 44.5% for the six months ended June 30, 1998.  The
increase in amount and percentage is primarily due to the acquisitions of REI
and HP, which have higher fixed operating expenses.  Due to the integration of
REI and HP, operating, administrative and other as a percentage of revenue has
increased, while commissions, fees and other incentives as a percentage of
revenue has decreased.

   Consolidated interest income was $1.1 million, a decrease of $0.2 million or
15.4% for the six months ended June 30, 1999, as compared to the six months
ended June 30, 1998.

   Consolidated interest expense was $19.4 million, an increase of $7.6 million
or 65.2% for the six months ended June 30, 1999, as compared to the six months
ended June 30, 1998.  The increase primarily resulted from the May 1998 issuance
of senior subordinated notes, which were used to finance business acquisitions.

   Provision for income tax on a consolidated basis was $1.7 million for the six
months ended June 30, 1999, as compared to the provision for income tax of $2.7
million for the six months ended June 30, 1998.  The decrease is primarily due
to the impact of the one time merger-related and other nonrecurring charges in
1998, which had the effect of increasing the effective tax rate for the six
months ended June 30, 1998.  In early 1998 the Company repurchased its
outstanding preferred stock which triggered a limitation on the annual amount of
NOL it can use to offset future U.S. taxable income.  This limitation does not
affect the way taxes are reported for financial reporting purposes, but it will
affect the timing of the actual amount of taxes paid on an annual basis.

   EBITDA was $41.6 million for the six months ended June 30, 1999, as compared
to $43.3 million for the six months ended June 30, 1998.  EBITDA effectively
removes the impact of certain non-cash and nonrecurring charges on income such
as depreciation and the amortization of intangible assets relating to
acquisitions, merger-related and other nonrecurring charges, extraordinary
items, and income taxes.  Management believes that the presentation of EBITDA
will enhance a reader's understanding of the Company's operating performance and
ability to service debt as it provides a measure of cash (subject to the payment
of interest and income taxes) generated that can be used by the Company to
service its debt and other required or discretionary purposes.  Net cash that
will be available to the Company for discretionary purposes represents remaining
cash after debt service and other cash requirements, such as capital
expenditures, are deducted from EBITDA.  EBITDA should not be considered as an
alternative to (i) operating income determined in accordance with GAAP or (ii)
operating cash flow determined in accordance with GAAP.


Segment Operations

                                       15
<PAGE>

         CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES (continued)


   The Company provides integrated real estate services through four global
business units. The four units are Brokerage Services, Corporate Services, Asset
Services and Financial Services.  The factors for determining the reportable
segments were based on the type of service and client.  Each business segment
requires and is responsible for executing a unique marketing and business
strategy. Brokerage Services consists of commercial property sales and leasing
services.  Corporate Services consists of outsourcing, transaction management,
advisory services and facilities management.  Asset Services consists of
property management and related services.  Financial Services consists of
investment property services (acquisitions and sales on behalf of investors),
mortgage loan origination and servicing through L.J. Melody, investment
management and advisory services through CB Richard Ellis Investors, L.L.C.
("CBRE Investors"), capital markets activities, valuation and appraisal
services and real estate market research.  The following tables summarize the
revenue, cost and expenses, and operating income by operating segment for the
three months ended June 30, 1999 and 1998 and the six months ended June 30, 1999
and 1998.

<TABLE>
<CAPTION>

                                                  Three Months Ended June 30,                      Six Months Ended June 30,
                                             ---------------------------------------        ---------------------------------------
                                                    1999                 1998                      1999                 1998
                                             -----------------     -----------------        -----------------     -----------------
                                                                               (Dollars in thousands)
<S>                                          <C>         <C>      <C>          <C>         <C>          <C>      <C>          <C>
Brokerage Services
 Revenue.................................     143,607    100.0%    $142,610    100.0%       $263,133    100.0%    $235,579    100.0%

 Costs and expenses:
  Commissions, fees and
   other incentives......................      73,245     51.0       72,827     51.1         135,200     51.4      124,760     52.9
  Operating, administrative
   and other.............................      56,201     39.1       47,120     33.0         105,210     40.0       81,181     34.5
  Depreciation and
   amortization..........................       3,582      2.5        2,524      1.8           6,909      2.6        4,026      1.7
                                             --------    -----     --------    -----        --------    -----     --------    -----

 Operating income........................    $ 10,579      7.4%    $ 20,139     14.1%       $ 15,814      6.0%    $ 25,612     10.9%

                                             ========    =====     ========    =====        ========    =====     ========    =====
 EBITDA..................................    $ 14,161     9.9 %    $ 22,663     15.9%       $ 22,723     8.6 %    $ 29,638     12.6%

                                             ========    =====     ========    =====        ========    =====     ========    =====

Corporate Services
 Revenue.................................    $ 20,382    100.0%    $ 17,294    100.0%       $ 37,360    100.0%    $ 29,774    100.0%

 Costs and expenses:
  Commissions, fees and
   other incentives......................       7,103     34.9        6,818     39.4          11,544     30.9       11,743     39.4
  Operating, administrative
   and other.............................      13,907     68.2       11,381     65.8          27,265     73.0       19,648     66.0
  Depreciation and
   amortization..........................         720      3.5          611      3.5           1,443      3.9        1,117      3.8
                                             --------    -----     --------    -----        --------    -----     --------    -----

 Operating loss..........................    $ (1,348)   (6.6)%    $ (1,516)    (8.7)       $ (2,892)   (7.8)%    $ (2,734)   (9.2)%

                                             ========    =====     ========    =====        ========    =====     ========    =====
 EBITDA..................................    $   (628)   (3.1)%    $   (905)   (5.2)%       $ (1,449)   (3.9)%    $ (1,617)   (5.4)%

                                             ========    =====     ========    =====        ========    =====     ========    =====

Asset Services
 Revenue.................................    $ 35,633    100.0%    $ 29,017    100.0%       $ 68,236    100.0%    $ 51,478    100.0%

 Costs and expenses:
  Commissions, fees and
   other incentives......................       7,425     20.8        6,048     20.8          14,157     20.7       11,580     22.5
  Operating, administrative
   and other.............................      24,961     70.1       21,112     72.8          48,097     70.5       36,052     70.0
  Depreciation and
   amortization..........................       1,724      4.8        1,369      4.7           3,617      5.3        2,570      5.0
                                             --------    -----     --------    -----        --------    -----     --------    -----

 Operating income........................    $  1,523     4.3 %    $    488      1.7%       $  2,365      3.5%    $  1,276      2.5%

                                             ========    =====     ========    =====        ========    =====     ========    =====
 EBITDA..................................    $  3,247     9.1 %    $  1,857      6.4%       $  5,982      8.8%    $  3,846      7.5%

                                             ========    =====     ========    =====        ========    =====     ========    =====

Financial Services
 Revenue.................................    $ 77,545    100.0%    $ 66,346    100.0%       $141,639    100.0%    $113,580    100.0%

 Costs and expenses:
  Commissions, fees and
   other incentives......................      28,969     37.4       26,775     40.3          52,488     37.1       47,229     41.6
  Operating, administrative
   and other.............................      38,808     50.0       32,350     48.8          74,789     52.8       54,910     48.4
  Depreciation and
   amortization..........................       3,942      5.1        2,923      4.4           7,993      5.6        5,036      4.4
                                             --------    -----     --------    -----        --------    -----     --------    -----

 Operating income........................    $  5,826      7.5%    $  4,298      6.5%       $  6,369      4.5%    $  6,405      5.6%

                                             ========    =====     ========    =====        ========    =====     ========    =====
 EBITDA..................................    $  9,768     12.6%    $  7,221     10.9%       $ 14,362     10.1%    $ 11,441     10.1%

                                             ========    =====     ========    =====        ========    =====     ========    =====

Merger-related and other
 nonrecurring charges....................    $    -                $ 16,585                 $    -                $ 16,585
                                             ========              ========                 ========              ========
Total operating income...................    $ 16,580              $  6,824                 $ 21,656              $ 13,974
                                             ========              ========                 ========              ========

Total EBITDA excluding merger-
 related and other nonrecurring
 charges.................................    $ 26,548              $ 30,836                 $ 41,618              $ 43,308
                                             ========              ========                 ========              ========
</TABLE>

   Segment operating income (loss) excludes interest income, interest expense,
merger-related and other

                                       16
<PAGE>

         CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES (continued)


nonrecurring charges and provision for income tax.

Three Months Ended June 30, 1999 Compared to the Three Months Ended June 30,
1998

Brokerage Services

   Revenue increased by $1.0 million or 0.7% for the three months ended June 30,
1999, compared to the three months ended June 30, 1998, due primarily to the
contributions from HP offset by a decrease in US revenues attributable to
liquidity problems in global capital markets.  Commissions, fees and other
incentives increased by $0.4 million or 0.6% for the three months ended June 30,
1999, compared to the three months ended June 30, 1998.  As a percentage of
revenue, commissions, fees and other incentives were 51.0% for the three months
ended June 30, 1999 compared to 51.1% for the three months ended June 30, 1998.
Operating, administrative, and other increased by $9.1 million or 19.3% for the
three months ended June 30, 1999, compared to the three months ended June 30,
1998.  The increase in the amount is primarily a result of the integration of
HP including incentive compensation based on increased operating results.
Depreciation and amortization increased by $1.1 million or 41.9% for the three
months ended June 30, 1999, as compared to the three months ended June 30, 1998,
primarily as a result of additional investments in hardware and software to
support the increase in new business and goodwill related to the acquisition.

Corporate Services

   Revenue increased by $3.1 million or 17.9% for the three months ended June
30, 1999, compared to the three months ended June 30, 1998, partially due to
growth in the facilities management business. Commissions, fees and other
incentives increased by $0.3 million or 4.2% for the three months ended June 30,
1999 compared to the three months ended June 30, 1998.  As a percentage of
revenue, commissions, fees and other incentives were 34.9% for the three months
ended June 30, 1999 compared to 39.4% for the three months ended June 30, 1998.
The decrease in commissions, fees and other incentives as a percentage of
revenue is primarily a result of the facilities management revenue increases,
which has no corresponding commission expenses.  Operating, administrative, and
other increased by $2.5 million or 22.2% for the three months ended June 30,
1999, compared to the three months ended June 30, 1998, primarily related to
additional personnel requirements and office operations expenses.  As a
percentage of revenue, operating, administrative and other were 68.2% for the
three months ended June 30, 1999 compared to 65.8% for the three months ended
June 30, 1998.  The increase in operating, administrative and other as a
percentage of revenue is primarily due to the building of the facilities
management infrastructure in response to the revenue growth.  Depreciation and
amortization increased by $0.1 million or 17.8% for the three months ended June
30, 1999, as compared to the three months ended June 30, 1998, primarily as a
result of additional investments in hardware and software to support the
increase in new business.

Asset Services

   Revenue increased by $6.6 million or 22.8% for the three months ended June
30, 1999, compared to the three months ended June 30, 1998 primarily due to the
contribution from HP.  Commissions, fees and other incentives increased by $1.4
million or 22.8% for the three months ended June 30, 1999, compared to the three
months ended June 30, 1998. Operating, administrative, and other increased by
$3.8 million or 18.2% for the three months ended June 30, 1999, compared to the
three months ended June 30, 1998, but decreased as a percentage of revenue from
72.8% to 70.1% due to the integration of HP which has lower ratio of cost  to
revenue.  Depreciation and amortization increased by $0.4 million or 25.9% for
the three months ended June 30, 1999 compared to the three months ended June 30,
1998, primarily related to the acquisition of HP.

Financial Services

   Revenue increased by $11.2 million or 16.9% for the three months ended June
30, 1999, compared to the three months ended June 30, 1998.  The increase in
revenue is primarily due the full contribution from HP.  Commissions, fees and
other incentives increased by $2.2 million or 8.2% for the three months ended
June 30, 1999, compared to the three months ended June 30, 1998.  The increase
is primarily a result of the revenue increase from the HP contribution.  As a
percentage of revenue, commissions, fees and other incentives were 37.4% for the
three months ended June 30, 1999 compared to 40.3% for the three months ended
June 30, 1998.  The decrease in commissions, fees and other incentives as a
percentage of revenue is primarily due to the integration of HP which generally
does not operate under

                                       17
<PAGE>

         CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES (continued)


commission-based compensation programs. Operating, administrative, and other
increased by $6.5 million or 20.0% for the three months ended June 30, 1999,
compared to the three months ended June 30, 1998, primarily as a result of
additional personnel requirements and the integration of HP. Depreciation and
amortization increased by $1.0 million or 34.9% for the three months ended June
30, 1999, as compared to the three months ended June 30, 1998, primarily related
to the additional investment in hardware and software to support the increase in
new business and the acquisition of HP.

Six Months Ended June 30, 1999 Compared to the Six Months Ended June 30, 1998

Brokerage Services

   Revenue increased by $27.6 million or 11.7% for the six months ended June 30,
1999, compared to the six months ended June 30, 1998, due primarily to the
contributions from REI and HP.  Commissions, fees and other incentives increased
by $10.4 million or 8.4% for the six months ended June 30, 1999, compared to the
six months ended June 30, 1998, primarily due to increased revenues, which
resulted in higher commission eligibility levels and, thus, higher commissions.
As a percentage of revenue, commissions, fees and other incentives were 51.4%
for the six months ended June 30, 1999 compared to 52.9% for the six months
ended June 30, 1998.  The decrease in commissions, fees and other incentives as
a percentage of revenue is primarily due to the integration of REI and HP which
generally do not operate under a commission-based program.  Operating,
administrative, and other increased by $24.0 million or 29.6% for the six months
ended June 30, 1999, compared to the six months ended June 30, 1998.  The
increase in the amount is primarily a result of the integration of REI and HP
including incentive compensation based on increased operating results.
Depreciation and amortization increased by $2.9 million or 71.6% for the six
months ended June 30, 1999, as compared to the six months ended June 30, 1998,
primarily as a result of additional investments in hardware and software to
support the increase in new business and goodwill related to the acquisitions of
REI and HP.

Corporate Services

   Revenue increased by $7.6 million or 25.5% for the six months ended June 30,
1999, compared to the six months ended June 30, 1998, partially due to the
contributions from REI, HP and growth in the facilities management business.
Commissions, fees and other incentives decreased by $0.2 million or 1.7% for the
six months ended June 30, 1999 compared to the six months ended June 30, 1998.
As a percentage of revenue, commissions, fees and other incentives were 30.9%
for the six months ended June 30, 1999 compared to 39.4% for the six months
ended June 30, 1998.  The decrease in commissions, fees and other incentives as
a percentage of revenue is primarily a result of the REI, HP and the facilities
management revenue increases, the latter of which has no corresponding
commission expenses.  Operating, administrative, and other increased $7.6
million or 38.8% for the six months ended June 30, 1999, compared to the six
months ended June 30, 1998, primarily related to the acquisitions of REI and HP
which have higher fixed operating expenses, additional personnel requirements
and business promotion expenses.  As a percentage of revenue, operating,
administrative and other were 73.0% for the six months ended June 30, 1999
compared to 66.0% for the six months ended June 30, 1998.  The increase in
operating, administrative and other as a percentage of revenue is primarily due
to the integration of REI and HP and continued building of the facilities
management infrastructure in response to the revenue growth.  Depreciation and
amortization increased by $0.3 million or 29.2% for the six months ended June
30, 1999, as compared to the six months ended June 30, 1998, primarily related
to the acquisitions of REI and HP.

Asset Services

   Revenue increased by $16.8 million or 32.6% for the six months ended June 30,
1999, compared to the six months ended June 30, 1998 primarily due to the
contributions from REI and HP.  Commissions, fees and other incentives increased
by $2.6 million or 22.3% for the six months ended June 30, 1999, compared to the
six months ended June 30, 1998.  Operating, administrative, and other increased
$12.0 million or 33.4% for the six months ended June 30, 1999, compared to the
six months ended June 30, 1998.  As a percentage of revenue, operating,
administrative and other were 70.5% for the six months ended June 30, 1999
compared to 70.0% for the six months ended June 30, 1998.  The increase in
amount and percentage is primarily due to the integration of REI and HP.
Depreciation and amortization increased by $1.0 million or 40.7% for the six
months ended June 30, 1999 compared to the six months ended June 30, 1998,
primarily related to the acquisitions of REI and HP.

                                       18
<PAGE>

         CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES (continued)


Financial Services

   Revenue increased by $28.1 million or 24.7% for the six months ended June 30,
1999, compared to the six months ended June 30, 1998.  The increase in revenue
is primarily due to growth in the valuation and appraisal services revenue and
the full contribution from REI and HP.  Commissions, fees and other incentives
increased by $5.3 million or 11.1% for the six months ended June 30, 1999,
compared to the six months ended June 30, 1998.  The increase is primarily a
result of the revenue increase and the resulting higher commission eligibility
levels from the REI and HP contribution and valuation and appraisal services.
As a percentage of revenue, commissions, fees and other incentives were 37.1%
for the six months ended June 30, 1999 compared to 41.6% for the six months
ended June 30, 1998.  The decrease in commissions, fees and other incentives as
a percentage of revenue is primarily due to the integration of REI and HP which
do not operate under commission-based compensation programs.  Operating,
administrative, and other increased by $19.9 million or 36.2% for the six months
ended June 30, 1999, compared to the six months ended June 30, 1998, primarily
as a result of business promotion expenses and additional personnel
requirements, and the integration of REI and HP.  Depreciation and amortization
increased by $3.0 million or 58.7% for the six months ended June 30, 1999, as
compared to the six months ended June 30, 1998, primarily related to the
additional investment in hardware and software to support the increase in new
business and the acquisitions of REI and HP.



Liquidity and Capital Resources

   The Company has historically financed its operations and non-acquisition
related capital expenditures primarily with internally generated funds and
borrowings under a revolving credit facility. In order to fund certain working
capital requirements, the Company had additional net borrowings of  $72.0
million under the revolving credit facility, during the six months ended June
30, 1999.  The Company's EBITDA was $41.6 million and $43.3 million for the six
months ended June 30, 1999 and 1998, respectively.  The decrease in EBITDA
reflects the continuing liquidity problems in the global capital markets as
discussed in Results of Operations.

   Net cash used in operating activities was $44.2 million for the six months
ended June 30, 1999, compared to $0.7 million for the six months ended June 30,
1998.  The change is primarily due to changes in components of operating assets
and liabilities and the decrease in the merger-related and other nonrecurring
costs accrued in 1998.

   Net cash used in  investing activities was $14.5 million for the six months
ended June 30, 1999, compared to $82.4 million for the six months ended June 30,
1998.  The change is primarily due to a lower level of acquisition of
businesses, the sale of the inventoried property and the absence in 1999 of the
supplemental purchase price payments included in 1998 in connection with a 1995
acquisition.

   Net cash provided by financing activities was $52.4 million for the six
months ended June 30, 1999, compared to $77.6 million used in financing
activities for the six months ended June 30, 1998.  The decrease primarily
results from increases in repayments of the inventoried property loan, other
loans and lower 1999 net borrowings from the revolving credit facility.

   In May 1998, the Company amended its revolving credit facility with a group
of banks to provide up to $400.0 million for five years, subject to mandatory
reductions of $40.0 million, $80.0 million and $80.0 million on December 31,
1999, 2000 and 2001, respectively.  The amount outstanding under this facility
was $239.0 million as of June 30, 1999 which is included in the accompanying
balance sheet.  Interest rate alternatives include Bank of America's reference
rate plus 0.50% and LIBOR plus 1.50%.  The weighted average rate on amounts
outstanding at June 30, 1999 was 6.74%.

   The revolving credit facility contains numerous restrictive covenants that,
among other things, limit the

                                       19
<PAGE>

         CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES (continued)


Company's ability to incur or repay other indebtedness, make advances or loans
to subsidiaries and other entities, make capital expenditures, incur liens,
enter into mergers or effect other fundamental corporate transactions, sell its
assets, or declare dividends. In addition, the Company is required to meet
certain ratios relating to its adjusted net worth, level of indebtedness, fixed
charges and interest coverage. An amendment to the revolving credit facility has
been executed by the banks and the Company which resolves various technical
issues.

   The Company expects to have capital expenditures ranging from $25.0 million
to $30.0 million in 1999.  The Company expects to use net cash provided by
operating activities for the next several years primarily to fund capital
expenditures for computer related purchases, acquisitions, including earnout
payments, and to make required principal payments under the Company's
outstanding indebtedness.  The Company believes that it can satisfy its non-
acquisition obligations as well as working capital requirements from internally
generated cash flow, borrowings under the amended revolving credit facility or
any replacement credit facilities.  Material future acquisitions, if any, that
require cash will require new sources of capital such as an expansion of the
amended revolving credit facility and raising money by issuing additional debt
or equity.  The Company anticipates that its existing sources of liquidity,
including cash flow from operations, will be sufficient to meet the Company's
anticipated non-acquisition cash requirements for the foreseeable future and in
any event for at least the next twelve months.

Year 2000 Issues Update

  As fully discussed in the Company's Annual Report on Form 10-K for the year
ended December, 31, 1998, the Company is replacing and upgrading all of its
affected hardware and software to ensure continued operations beyond December
31, 1999.  Although, there can be no assurances, the Company believes that its
proprietary accounting systems, information technology and embedded systems will
be Y2K compliant by the end of 1999.



  To date, the Company estimates that it has spent approximately $9.0 million
for the Y2K issue and estimates approximately $2.0 million of additional costs
to fully address the Y2K issue.  The Company does not track the cost and time
that its own internal employees spend on the Y2K project.  Except as noted
above, management's assessment of the status of the Year 2000 project and its
contingency plans remain unchanged from that described in the Company's 1998
Annual Report Form 10-K.

  Even though the Company has completed an assessment of risk with respect to
third-party suppliers and clients, the Company cannot conclusively determine
that their occurrence will not have a material adverse impact on the Company's
result of operations, liquidity or financial condition.  The risks include, but
are not limited to, temporary failure of one or more infrastructure services
provided by third-party suppliers such as bank and payroll transaction
processes, utilities and transportation services; loss of real-time processing
capability by the Company's internal information systems; and interruption of
commerce with customers or suppliers that experience Y2K-related failures within
their businesses.

  The Company's plans to address the Year 2000 issues are based on management's
current estimates and are subject to the aforementioned uncertainties that could
cause the actual  results to differ materially from these plans.

Euro Conversion Disclosure

   The Company does not expect the introduction of the Euro to have a
significant impact on its market or the manner in which it conducts business,
and believes the related impact on the Company's financials is not material.
Approximately six percent of the Company's 1998 business was transacted in the
participating member countries.  The Company is currently using the legacy
currencies to conduct business in these member countries.

   The Company is in the process of replacing or upgrading the affected hardware
and software to allow for dual-currency reporting during the transition period,
and issues related but not limited to converting amounts and rounding. The
Company anticipates these system upgrades will be fully functional prior to the
end of the transition period.

                                       20
<PAGE>

         CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES (continued)


Litigation

   In December 1996, GMH Associates, Inc. ("GMH") filed a lawsuit against
Prudential Realty Group ("Prudential") and the Company in Superior Court of
Pennsylvania, Franklin County, alleging various contractual and tort claims
against Prudential, the seller of a large office complex, and the Company, its
agent in the sale, contending that Prudential breached its agreement to sell the
property to GMH, breached its duty to negotiate in good faith, conspired with
the Company to conceal from GMH that Prudential was negotiating to sell the
property to another purchaser and that Prudential and the Company misrepresented
that there were no other negotiations for the sale of the property. Following a
non-jury trial, the court rendered a decision in favor of GMH and against
Prudential and the Company, awarding GMH $20.3 million in compensatory damages,
against Prudential and the Company jointly and severally, and $10.0 million in
punitive damages, allocating the punitive damage award $7.0 million as against
Prudential and $3.0 million as against the Company.  Following the denial of
motions by Prudential and the Company for a new trial, a judgment was entered on
December 3, 1998.  Prudential and the Company have filed an appeal of the
judgment.  The Company believes that it has adequate insurance coverage for the
compensatory portion of the judgment and adequate reserves for the punitive
portion, as well as potential indemnity claims from Prudential for the entire
judgment.

   In August 1993, a former commissioned sales person of the Company filed a
lawsuit against the Company in the Superior Court of New Jersey, Bergen County,
alleging gender discrimination and wrongful termination by the Company. On
November 20, 1996, a jury returned a verdict against the Company, awarding $6.5
million in general and punitive damages to the plaintiff.  Subsequently, the
trial court awarded the plaintiff $638,000 in attorneys' fees and costs.
Following denial by the trial court of the Company's motions for new trial,
reversal of the verdict and reduction of damages, the Company filed an appeal of
the verdict and requested a reduction of damages.  On March 9, 1999 the
appellate court ruled in the Company's favor, reversed the trial court decision
and ordered a new trial. In June of 1999, the Supreme Court of  New Jersey
agreed to review the Appellate Court's decision. Based on available reserves,
cash and anticipated cash flows, the Company believes that the ultimate outcome
will not have an impact on the Company's ability to carry on its operations.


   The Company is a party to a number of pending or threatened lawsuits arising
out of, or incident to, its ordinary course of business.  Based on available
cash and anticipated cash flows, the Company believes that the ultimate outcome
will not have an impact on the Company's ability to carry on its operations.
Management believes that any liability to the Company that may result from
disposition of these lawsuits will not have a material effect on the
consolidated financial position or results of operations of the Company.

Net Operating Losses

   The Company had U.S. federal income tax NOLs of approximately $70.8 million
as of December 31, 1998, corresponding to $24.8 million of the Company's $53.3
million in net deferred tax assets before valuation allowance.

   The ability of the Company to utilize NOLs was limited in 1998 and will be in
subsequent years as a result of the Company's 1996 public offering, the 1997
Koll acquisition and the 1998 repurchase of preferred stock which cumulatively
caused a more than 50.0% change of ownership within a three year period.  As a
result of the limitation, the Company will be able to use approximately $26.0
million of its NOL in 1998 and in each subsequent year.  The amount of NOLs is,
in any event, subject to uncertainty until the statute of limitations lapses
after their utilization to offset taxable income.

Segment Reporting

  In July 1999, the Company announced that it will change its segment reporting
from the current four segments to three new segments.

New Accounting Pronouncements

                                       21
<PAGE>

         CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES (continued)


   The Company adopted SFAS No. 131, Disclosures about Segments of an Enterprise
and Related Information during the six months ended December 31, 1998. SFAS 131
requires the use of the "management approach" for segment reporting, which is
based on the way the chief operating decision maker organizes segments within a
company for making operating decisions and assessing performance. The adoption
of this statement did not have a material impact on the Company's financial
statements.

   In 1999, the Company adopted Statement of Position ("SOP") 98-5, Reporting
on the Costs of Start-up Activities. SOP 98-5, which requires costs of start-up
activities and organization costs to be expensed as incurred. The adoption of
this statement did not have a material impact on the Company's financial
statements.

   In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133
establishes accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset or liability
measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the income statement, and requires that a company must formally
document, designate, and assess the effectiveness of transactions that receive
hedge accounting.

   SFAS No. 133 is effective for fiscal years beginning after June 15, 1999. A
company may also implement the Statement as of the beginning of any fiscal six
months after issuance (that is, fiscal quarters beginning June 16, 1998 and
thereafter). SFAS No. 133 must be applied to (a) derivative instruments and (b)
certain derivative instruments embedded in hybrid contracts that were issued,
acquired, or substantively modified after December 31, 1997. The Company has not
yet quantified the impacts of adopting SFAS No. 133 on its financial statements
and has not determined the timing of or method of its adoption of SFAS No. 133.
Based on derivative instruments outstanding, SFAS No. 133 is not anticipated to
have a significant impact on earnings or other components of comprehensive
income.

                                       22
<PAGE>

         CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES (continued)


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   The Company's exposure to market risk consists of foreign currency exchange
rate fluctuations related to international operations and changes in interest
rates on debt obligations.

   Approximately 20.0% of the Company's business is transacted in local
currencies of foreign countries.  The Company attempts to manage its exposure
primarily by balancing monetary assets and liabilities, and maintaining cash
positions only at levels necessary for operating purposes.  While the Company's
international results of operations as measured in dollars are subject to
foreign exchange rate fluctuations, the related risk is not considered material.
The Company routinely monitors its transaction exposure to currency rate
changes, and enters into currency forward and option contracts to limit such
exposure, as appropriate.  Gains and losses on contracts are deferred until the
transaction being hedged is finalized.  At June 30, 1999, the Company had no
outstanding contracts.  The Company does not engage in any speculative
activities.

   The Company manages its interest expense by using a combination of fixed and
variable rate debt.  The Company utilizes sensitivity analyses to assess the
potential effect of its variable rate debt.  If interest rates were to increase
by 70 basis points (approximately 10.0% of the Company's weighted-average
variable rate at June 30, 1999) the net impact would not result in a material
change in the Company's interest expense or the fair value of the Company's debt
obligation.


REGARDING OUTLOOK AND OTHER FORWARD-LOOKING DATA

   Portions of the Quarterly Report, including Management's Discussion and
Analysis, contain forward-looking statements within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause the Company's actual results and performance in
future periods to be materially different from any future results or performance
suggested in forward-looking statements in this release.  Such forward-looking
statements speak only as of the date of this report and the Company expressly
disclaims any obligation to update or revise any forward-looking statements
found herein to reflect any changes in Company expectations or results or any
change in events. Factors that could cause results to differ materially include,
but are not limited to: commercial real estate vacancy levels; employment
conditions and their effect on vacancy rates; property values; rental rates; any
general economic recession domestically or internationally; and general
conditions of financial liquidity for real estate transactions.

                                       23
<PAGE>

                CB RICHARD ELLIS SERVICES, INC. AND SUBSIDIARIES

                          PART II. OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

    (a) Exhibits

        27  Financial Data Schedule (filed only with the SEC)

    (b) No reports on Form 8-K were filed for the second quarter ended June 30,
        1999

                                       24
<PAGE>

                                 SIGNATURES


   Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                            CB RICHARD ELLIS SERVICES, INC.



    Date:  August 11, 1999                     /s/ Ronald J. Platisha
                                            --------------------------------
                                                   Ronald J. Platisha
                                                Executive Vice President,
                                             Acting Chief Accounting Officer

                                       25
<PAGE>

                                 EXHIBIT INDEX



       Exhibit
       Number                           Description of Exhibit
       ------           ------------------------------------------------------

        27               Financial Data Schedule (filed only with the SEC)