CBRE - Earnings call transcript Q3 2019

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Operator

Greetings. Welcome to CBRE’s Third Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

the to turn host, now will conference your over Mr. I Burke. Brad ahead. Please go

Brad Burke

to Thank call. you. CBRE's quarter And welcome third XXXX earnings conference

we additional website, our as excel you cbre.com can release prepared press with a it remarks the issued to supplemental deck financial that along Relations file today, that slide Investor our and on is an follow announcing of well page use materials. as presentation results, contains posted Earlier our a along with

be Bob will will overview and for call call will follows: President morning's First, results in an this for questions. our discuss your agenda CEO, provide as of results we quarter open for more I’ll Our up CFO and third Stearns, Leah the Sulentic, detail; the financial our comments, our after quarter; next, our these

growth matters including begin, regarding include I a involve of of Before presentation this remind expectations acquisition, business that integration, our statements financial regarding any operations, the events these I'll contains that performance these uncertainties. and this that to undertake and you forward-looking outlook are not urge circumstances. and to future or other reflect factors outlook, remind statements capital fact. information risks consider to momentum, obligation Examples statements market deployment, and share, contained number our update you no we you historical on XXXX subsequent We call CBRE's that

statements. only be those the estimates from results should You these differ future actual statements cause and factors in should could to may expressed be that aware us forward-looking that considered certain affect in these materially

to our morning's forward-looking other annual on factors quarterly most statements, reports XX-K XX-Quarter, earnings risks press For a please may that and respectively. and Form full impact and discussion recent Form filed and release the these this refer of

EPS, these in together in comparable of adjusted explanations the fee the the of presentation other financial certain non-GAAP remarks of revenue reconciliations measures our with directly GAAP measures and adjusted measures, included slide EBITDA, deck. and provided to have We most appendix

our financial XXXX. please four Now, to the of slide turn for results presentation, which third highlights quarter of our

Third our by EBITDA at Investments adjusted Advisory year's the in Real for an EBITDA two of quarter XX%, flat was segment. record decline quarter basis, Workplace and offset in growth EBITDA of and Real On in our growth was in combined Strong a million growth realized segments Estate segments, within services bottom-line last our Services adjusted segment. Investments over all-time two fee The adjusted earnings top and Solutions per a and Global XX% third revenue adjusted share services $X.XX. respectively. $XX generated represented Estate

segments margin points. In addition, Advisory, approximately Global the combined basis adjusted Workplace and Solutions expanded our EBITDA for XX

exchange our growth, adjusted consolidated results impacts of revenue X% negative translation respectively. also Finally, fee EBITDA to and reflect X% and foreign

call update fundamentals, on an for the Now, turn I to our Bob. will over business

Bob Sulentic

Thank you, Brad, everyone. and morning, good

As you’ve by business, in services in sales, growth and property mortgage seen, we reported global driven our outsourcing, double-digit another advisory occupier strong commercial U.S. origination. quarter revenue

organic We in combined in our leverage benefit from services businesses. strong continue to growth operating

our development expanding into the poised October, is rental the capabilities multifamily Homes, growth. secular market acquisition early long-term of UK, completed in the Additionally, Telford we where for

CBRE's engaging We able market Brexit, our successful reflecting on to lengthy could valuation, process. to at without Telford they believe were acquire in due very structure than materially own. an platform team the to accomplish able on concerns capital their be more Telford altering integration or attractive We a will

from acquisition to core represents is CBRE. should type M&A the expect Telford you and Strategic strategy, our of

serve our opportunities. growth, closing experienced for $X.X we integrating have that billion to position at competitive our in targeting, and integrating our and and the nearly acquisitions are acquisition Sourcing, Since M&A our Both is advantage clients business Company. our leadership teams bolstered underwriting for and have senior acquisitions underwriting XXXX, a our deployed strategic our ability marketplace. deeply

Leah? M&A our quarter will capital she after allocation detail. in more reviews the Leah and approach discuss to

Leah Stearns

Thanks, Bob.

Turning to slide five.

commercial about segment growth drove resulted adjusted from non-Americas growth. Americas both the the Services attributable points saw generated local operating to of leverage EBITDA Advisory gains; regions. origination adjusted and double-digit basis quarter. mortgage revenue a X% Our half XXX expense in against fee currency Strong EBITDA. healthy growth Over remainder during from management XX% well-disciplined margin in expansion revenue is margin our We growth the expansion operating and

geographical conditions region EBITDA in and China. adjusted of in strongest than activity in and capital the saw total less CBRE’s represent offset These as make soft adjusted approximately division more EBITDA. Kong Asia two any markets our up Hong market quarter the region growth X% North markets Our of Japan outstanding China than Greater

capital of the year. markets, This XX%, sales accelerating significantly set for property commercial an led the growth, growth larger origination, increasing number includes half in and entities with which and of mortgage revenue was life by by gains up origination X% Global both share market pace transactions which funds. our including was insurers, the XX%, conduits, from to commercial first mortgage and credit fueled private acceleration of revenue nearly

United notable growth meaningful XX% Northeast by region share sales transactions larger driven on primarily States. in which Property revenue of the market a was led strength number States, by gains. of and United This sizable by the increased was the

sales the parts of sales X%, in FX growth impact local declined outside Americas in continued which flat excluding Pacific currency. property X%, sales the Asia, Outside residential, of Pacific the residential the Asia weakness region property negative was in Americas, and includes and

activity, markets terms, quarter. real a leasing investing supply increase healthy rose growth. in the X% growth or supply measured Advisory occupancy the be strong local in currency XX% in ample continues against and focused rates the revenue year’s commercial on X% Americas particularly capital estate, Capital bolstered to prior by in of

and driven financial U.S. U.S. services revenue. which leasing leasing nearly and for revenue accounted XX% grew technology, manufacturing by X% by and was sectors, clients of

the in our activity Global in quarter. recorded based for We Workplace a now quarter. also revenue leasing saw account Americas notable the Inclusive Solutions in segment, acceleration rose X% deals of

than the figures companies These revenue companies XX-month X% leasing space. include of leasing and coworking X% as than both trailing tenant our negotiating less the quarter. Leasing in with drove landlord for [indiscernible] and third coworking leases U.S., in occupiers revenue agents, placing less of U.S. coworking in

The with demand representing a no relatively single overall component remains half U.S. total. small coworking than of X% operator the the market, one more for of of

space any office grow, flexible this in market solutions continue way. to is estate enough to large While will swing commercial fundamentals not real overall meaningful sector

project on segment Turning six. Global our EBITDA Solutions with adjusted lines management, We our and transactions. strength three to Workplace growth facilities XX% produced management business, of across slide

XX% generated landing from investment companies GWS be rated for revenues expanding continues Importantly, of of our outsourcing also clients. engagements our large, enterprise base customer approximately continued to high-quality new revenue client reflects existing services, grade growth by large and composed momentum Fee relationships. boosted occupier strong of with XX%

leverage rating remediate In a contracts. Europe, next items operating addition, non-cash outpaced fee fixed Slightly choppier of due growth and revenue a in totaled negative greater of million handful a which of accounting growth price expect in challenging the to total quarter. year, accounts couple and expense reflected revenue to $XX we which adjustments,

Global management has largest square ever new basis. recent integrated advantage in to a example Workplace facilities, and Advisory portfolio Our our million worldwide Solutions project contracts us represents transaction Novartis, The for a global One accounts. large on team. appointed competitive and Services distinct of XX business our foot is provide which securing has one

full we're XX% up robust, significantly, the contracts outsourcing contracting of from clients pipeline purchasing is a bundle nearly derived customers associated prior year-to-date services by from business outsourcing Our a remains services. which sequentially year new the more the adjusted bigger for offered and period. was suite the our EBITDA seeing business, and On for both basis, of with of

over seven, the prior to million compared fell the year Estate Real our transactions. of segment. Turning to Adjusted period, primarily slide with EBITDA timing and development Investments $XX by due

flexible adjusted was now Beyond our office incremental in couple management investment business, Development third are development, in of for as and expectations strong to transact slightly growth the XXXX. business deals investments offset expected by space our a EBITDA below Hana. smaller quarter our new

to larger in the previously We also transact EBITDA now adjusted XXXX. expect one anticipated in fourth million deal, quarter $XX

development level, projects variability projects $X.X sequentially. The for rate our healthy cap Investor tight. performance overall very high combined remains development pipeline for in-process enthusiasm has market and remain from natural rising Class A Our and our and billion portfolio record a financial business’s quarter-to-quarter. remains reached

our not changed. While have have timing expectations expectations shifted few specific for pricing our developments, a

investment in quarter. to the Performance management our improve, over $XX business contributing EBITDA adjusted just continued million during of

Capital under Assets level, foreign past a over would elevated XX new with remains but billion record also $X.X management raising headwind raised have for more $XX billion translation. than currency the months. reached from a

workspace is to by and the We our operators early Dallas to opened quarter coworking and first high year. stay its Finally, concept quality strong next increasingly and Southern for gravitating with new in occupiers demand sponsorships. flexible believe financial California with are location London in units planned in landlords here Hana

locations and future of variety as as on structures, well partnership leases. for agreements, management, pipeline focuses Hana CBDs Our includes major including a

eight. slide to Turning

pursuing We are disciplined to approach on capital focused very allocating CBRE. at a

balance net solid the capital and is evidenced reduction we our us execute capital The our foundation provides have Over structure our leverage, of $X to strengthened than sheet, strategy. which years, five a more last in by our billion allocation liquidity.

of investing to acquisition accretive Our share CapEx, priorities capital, we've Telford deployed through shareholders. and are in capital and for October. recent in our capital Year-to-date, returning on growth, million access $XXX focused allocation enablement repurchases M&A tech including approximately

greater over million on capital professionals well invested service over that concessions focused this our levels higher enable net $XXX with clients of investments with deployed also expenditures have half bring technology for We of of or efficiency. to

of XXX In XXbX-X XXX recently addition, average over executed beginning in million third $XX.XX, XXXX, program, the of which the CBRE has quarter. shares shares of our repurchase the at price an since as repurchased of million of today, including initiated

Given and you more our way as a to to in well capital more a expect provide significant returning current consistent shareholders. capacity, to us to can as flexibility around levels of to our utilize financial both share leverage approach programmatic capital allocation maintain repurchases and forecasted

Due in low of $XXX delayed at development year modest of end or now fourth Finally, respect in segment million to range to from to our million of the timing $XXX our Estate quarter. Real EBITDA Telford outlook. March, expect a deals, below our we with set Investment inclusive for the benefit the full in the slightly expectations XXXX we adjusted

we XXXX. to at $X.XX expect adjusted services midpoint This in range as Nonetheless, for the full-year we implies our the strength deals. our growth are to delayed these guidance businesses development for at offset impact XX% our of EPS, of maintaining $X.XX range guidance

Turning to his to slide back I'll remarks. the nine, brief call closing turn Bob for

Bob Sulentic

Leah. you, Thank

of with region. largest As cautious favorable, final are looking optimism. ahead particularly we fundamentals the macroeconomic Americas, real estate Commercial months our XXXX, remain we and to the enter XXXX in

geographic and geopolitical and continue position CBRE business uncertainties. trade to diversified ongoing Our mix despite thriving,

investments platform ongoing We that also and our service us advantages. believe distinct industry-leading competitive give scale offering,

Our people levels are energized and higher. never have been engagement their

With for we'll open lines that, operator, the questions.

Operator

Instructions] [Operator you. from comes Thank Morgan. Paolone Your Anthony with first JP question

Anthony Paolone

Thank you, and morning. good

can that like you us that thought the Now you EBITDA you you a financials, details is coming will, few business we where and giving should that how playing minute out? to a around closed, multiple, see you Telford that if about spend in the see paid, how

Leah Stearns

Sure. that at business times Anthony, we to that revenue coming the development Telford today. you a from our what for believe, more cash on XX a fashion And recognition business. similar I about within we you of may looked perspective, of Leah. GAAP, see given it's under would We say evaluation see cash flow in basis. paid flow

in XX% -- see of we Telford. the at come So, first ownership what through cash, of you of in our about expect about year would would for GAAP, portion least a

So, for around expectations XXXX on provide the guidance in the Telford uptick fourth more we'll but we'll a see call. the modest February quarter,

Anthony Paolone

the rest year? How this that of your a looks comp for leasing quarter third the guidance, out terms should one in we about then, And works how actually tougher quarter. like think fourth the it's Okay. than bad of

Leah Stearns

go a expect specifically we've guidance the obviously, double-digit But, QX which out was low-teens comp in to growth expectations away we provided not implies fourth going and tougher much that there not EPS, -- to will QX. quarter. do We're in trend in to So, speak leasing. around

Anthony Paolone

then, And GWS. last Okay. is my question on

drag, of as acting seems on a Europe fee of actually describe You in it business. Can there. recurring caused just scenarios accounts drag kind couple of a margins that you like, like a what mentioned a sort

actually variability? So, that that happens like, what creates

Leah Stearns

Sure.

achieve that a the the about in transactions underwrite have we cost able fact reduction in cases in to that they’re actually expectations we few we those And a agreements. for a and path in how given pricing accounts, terms new of cases, we some in when bringing and and cost. So, Europe, we've account think run in have those gone been we within glide isolated, savings of haven't to expected. talent we're we GWS, In that

in we the And remediate that XXXX quarter and well. expect well to as so, fourth into

Anthony Paolone

saves, the you So, that means cost say client. so, saves that -- when cost you anticipate for

So, income…? achieve you don't get less if you those, the

Leah Stearns

Exactly.

Anthony Paolone

-- that okay. Is

Leah Stearns

Correct.

Anthony Paolone

Great.

Okay. Thank you.

Leah Stearns

Thank you.

Operator

comes Your next from Green with Jason Evercore question ISI.

Jason Green

On in back you now, low-XXs. least to at perspective? from an the bought guys the the it's stock a at high-XXs lack XXs. discount, a at is curious the in previously, sitting buy function viewing this and whether if have the share is marketplace you're stock buying buyback front, appeared a And in opportunity of more the of unwilling or acquisitions I'm

Leah Stearns

broader really about those Hi, Jason. of I context. allocation about neither it's two. It's actually would in say, thinking a capital

shares of to leverage still an shares very for down at see from that example, respect think, are we value. the overall us us I And at the more our to leverage, more that stock our attractive we dislocation the range, with in the level where periods can that compensation dilution, back But prudent under to We it's in future. bucket of migrating an where But, do I time, of do buyback we about approach program. that we're pressure. the you'll authorization Given for that be are believe use see market. see programmatic, end for least programmatic offsetting minimum more it a low at a our within do a the opportunistic use fact fashion. it's opportunistic think, the we'll we extent authorization to the we have in nice in fashion remaining We equity that buying

Jason Green

originations to by an the be you And all at business this entities. moving mentioned FHFA? And transactions if at were private we part GSEs forward? expect then, initiatives switching should over significantly fueled to up less the driven was and in of by Was business side, it commercial origination with mortgage so, new larger and at this agency

Leah Stearns

I’d that. two to really say, from pieces we credit sources. there's see did One, all

lifecos banks, debt the So, [ph] and was it funds GSEs.

So, on GSE balanced watching reform clearly I side. a have would say was the We mix. been it

our not but that. diversify so, necessarily additional to GSEs, business, been growth from And has this and further accounts add year to that away quality part to client of contract the

and concerted that to teams were across down, So, the our it perspective, from mortgage further our it was diversify because client just a commercial wasn't specifically GSEs origination effort base. go out

Jason Green

reform thoughts all I reform then, Got but plan guess, last on read it. I the my it what positively reflect out while just being your proposals guess, the pertains we're was specifically on reform CBRE's one, are probably now? as just And equal, that's topic, to plan. else would there for the the our curious business, right housing residential on

Leah Stearns

monitoring the Multifamily play that. the certainly with with been process we beginning the mean, agree I year. of I we've really GSEs. this where since is

place, there measures. to to But, movement we positive post that And do in be that very so, them. has future continue We'd respect with any been believe caps. pursuit that certainly expect the published is for a profitable to reform

positively we're expanding with -- year-to-date. how that's come private also the so, And are looking out with again, that And do pleased we we at work we're operators.

think we that that's So, positive. also

Operator

you. Thank

Your comes ahead. next Blair. Please Josh question with from Lamers William go

Josh Lamers

a that getting business in think about UK to think, year. the billion. I this look into seems XXXX? and for wondering QX process back Telford's and just the U.S. development zones that of does multifamily? end I And at throughout case, you in how the then, $X.X if business then pipeline of opportunity was is double boost does the on continue the development pipeline course U.S. general. I'm is the It wanted Telford And from

Bob Sulentic

a impacted by are not being we zones. major Josh, way opportunity in

think, continue going different I forward. to there, has we of our of that be continue they'll a not But, there'll There's impact be political a had it will, lot out pressure think to major business, an those opportunity. on don't kinds. around

ability secure in of is signs is that business good shape underwrote rates the as expect, we Our in at terms was rental acquisition. we in et opportunities the exit as we that thought rates, it new early development we cetera. their to least cap be of to going have, are very pipelines Telford, terms when good

Our about that lot and be on now Telford, encouraged with there teams we're it. going a to over getting business, are learned quite just but

Josh Lamers

of And see. down break one And then, to that's type versus from of existing hold Thanks. could growth lastly, on growth I hamper reaching hoping touch on future? capacity was unpack maybe in to in contribution we the GWS. certainly clients are wins? growth that industries a is And good have you and the the quarter, any the could sort which than employment whether you of new strong certain expected, you maybe helping stronger

Leah Stearns

saw and Sure. and I'll nice from that I our management on growth advisory facilities mean, segment. across of perspective, we touch a GWS that. transaction really their component

that We was up. and of quarter. are by terms up suite, management, transactions signing helped project in seeing the for facilities, that signing accounts certainly the so Novartis full the And in pick third are those

So, did growth But, the margin and EMEA, Americas. perspective, performance growth, from would I are for have U.S., perspective, say, strong geographic mean, nice in in across I really from areas seeing other we we a terms across APAC. the of a --

in Novartis that differentiation position as we to sectors, With specialized we pharmaceutical, center are are data I sectors favor. provide. the that very you to out different capabilities do and which and And our respect healthcare we we relates the a with see unique to for do think playing have services for out it have, is like building pursuit this CBRE, a strong

that differentiation clients our really can GWS the enterprise outstanding segment. this think And as of comes are has lot a we taken well, approach large it we for high results clients for unmatched along And relates in that investment I our grade. very provide are quality So, that by others ultimately there's those space. that think CBRE to as certainly with

Josh Lamers

employment no there? And speak capacity up constraints to

Leah Stearns

or they're the certainly not very I being finding We've see necessarily. of because I of necessarily of not labor I a and that. out segment. it's is rebadging availability cover the to watch And was really think tremendous that us. employees, win going mean, limitation don't to that had think bringing certainly growth that that large as for that I Novartis another continue we necessarily folks us employment most growth. the on

Operator

[Operator from with question Please KBW. you. comes Jade go Instructions] next Thank ahead. Rahmani Your

Ryan Tomasello

for is for the question. morning. This Good Ryan Tomasello on Thanks today. Jade taking

the Just the on of commentary believe XQ. I prepared you your represented leasing around I in your topic of in coworking, appreciate X% said remarks. coworking

leasing releasing more wondering us by capital as the view And what to represented Hana, if of it there? then, expect if can Do year period. opportunity us amount comparison a presenting overall, then, that away to you business. Just pullback likely as business you or as deploy in you was from on WeWork some the opportunity ago a an thoughts well -- that of just And maybe your give for updated from more as the a the as the Hana opposite? it is for the you way ago, backing -- an of how do is space of WeWork headwind view on can provide that you year

Leah Stearns

I'll terms opportunity. the Bob broader first of have in and start I'll with strategic Sure. up pick the piece,

was X%. the about of terms in quarter, third from coworking the impact that So, in

there -- the XX-month mentioned about X% was We growth. was contribution to trailing also

away. market. as the think that's in not We leasing being a but quarter, of driven needs the trend and So, that we slight for in certainly really coworking that going a see a the by terms trend is deceleration contribution

there so, also makes for just locations of continue demand, about to find for but up be number. companies, that in coworking not will which for sale, of And believe future that we terms half

then, think on amount coworking. for that a just the Bob, there I shows around strategy? market tremendous that in the to So, activity need And continues be of

Bob Sulentic

Yes.

impact our what's the on impact it would not that on overall Ryan, tactical, that had with strategy I Hana say characterize has as So, would had WeWork strategy. has happened I an but

as or space roughly see market Leah the incremental around we some our considering the way in the flexible weren't from So, in the run, coworking that occupiers Hana. of X% landlords But, direction saw opportunity seeing this We're said, incremental it's multi-tenant of before. some world run, we long inquiries before, short from we're the space seeing in today. that inquiries going are maybe

go We to continue much to it will as as think XX%.

occupiers expect around Our that that's work be space, future they direction know in belief and to we've their good. this the occupancy type of think the our is by world. We we percentage driven the in of a done that in with

more Our coworking we capital move to carefully where strategy for a intensive Hana footprint over with space time is themselves. model more owned i.e., more to investment, bit space a landlords likely the start manage model, that's by and to build leases, a --

coworking their is to hypothesis because buildings going in lot it. themselves the the tenants Our are as because downside. to want space tenancy. want going landlords control are owning time They're to view a of likely want over that to want they They a it to going control believe their they

want the that we to relative they impacted with if run Hana we meaningful thought the upside, our positioning to direction about move any in market been that's short way are have direction, would in the they the moves. own to Nothing in So, Hana and be. results what

Ryan Tomasello

coworking considering then, to just broader the of you technology, seeing from in in? environment. be overall? broader overall helpful. will Do for curious by thoughts the I what you're terms Thanks. just you you be that guess, that that very a get will continue comp, demand outlook you that's trend hearing these Just business. leasing your on driven clearly What demand services, environment, hoping a setting of And are out, to some on tougher called leasing expect space XQ industries mentioned, believe you've and financial still like occupiers that for the aside That's in like

Bob Sulentic

happened Leasing you it not It's compare is what only to year. when strong. last strong

year sustain GWS in That's combined business a growth said look ago. and growth almost of a asked this business and when we year you the market. were our we top on that a U.S., leasing we talking our the about So, XX% ago of But, kind growth healthy X% at were market. it thought A distribution manufacturing going by be of able will companies, being but never being users. financial it were a companies, XX% balanced. we by But, sustain? driven is lot growth. to Well, It's it's driven tech cetera. space et driven leasing we it's healthy growth very agency when It's by year to being services companies,

leasing year expect We expect to some And in a continue decent business the to solid. fourth it than the we leasing expect expect strong our grow to to be it be We little growth, be quarter. it next economy this way is we the year, don't but and ago. a did slower year

Ryan Tomasello

just then, And one, if last one could. I

I last at on believe for guidance, that I'm and XXXX, incorrectly. if gave year guidance Just you remembering me Day, XXXX correct your Investor please

you when plan this give guidance you say XXXX for year. if can to wondering Just

Leah Stearns

that We'll Yes. year-end. we address in when release February

Ryan Tomasello

questions. the taking for Thanks Great.

Leah Stearns

Thank you.

Operator

Thank you.

question Mitch ahead. Germain comes Your go Please with next from JMP Securities.

Mitch Germain

morning. on is from -- Good Hana, how that's the out Hana Bob, product differentiate you other how do that there?

Bob Sulentic

can't and in It's alternatives data similar work want. build quality, world, few of format. spaces. portfolio big percentage of out towards in this membership a of flexible so flex know doing there, as working the high We're and enough. the their people We their than in of cetera. inside better occupiers than for a the better rather the more out, a A enterprise all ways, forth. Mitch. I around amenities what they institutional i.e., space want more And door them got It's, result, beverage security, It's format. kinds again, et teams portion other We of a oriented food terms some space for they know stress of users

going going went with margin, of very the that's basically look with basis, we've going be occupiers our think a on If to bit our of piece of changed. that. going our They be of Hana we're and -- their space material oriented said a some some a at Well, lease that we're you historically, space, we'll little to own and they is consistent traditional concept on occupancy do of coworking coworking. portfolio we'll what on to to forward,

Mitch Germain

And I Dallas, regards not others? your what markets you initial Why to Southern think those with these mind and and London. selecting California went through markets, mentioned and

Bob Sulentic

Well, end has at a to running in. By by way, talk about. our we been year, with clients in. there'll that occupier have those up is triangulated a the in -- again, the that that them we've ended coworking and of position done on the Hana, Hana of our be some There with we've driven other the and we're two not markets very clients are work of direct next be our there'll number are opportunities that up again on And investors close we're -- the around the everything side markets looking when on available, groups, in by those the we've arena were side.

Mitch Germain

Got you.

You the drove or have I was big off acquire it that may but discussions that to mentioned them? and a Telford apologize, previously, transaction, this relationship was a the

Bob Sulentic

our to Estate target position business of Real grow our strategically. to taking Estate -- Investment get work GWS do Norland. strategy our had We wanted kind things U.S. the things that was Real had neither. several around done ended some with work them of opportunity development one to of did ourselves was to some And outside we Investment we We business. and same The Bill years bunch team It that strategy causing a up Concannon done and ago

in after kinds us opportunistic we after they Telford Brexit, and built leadership targeted of Company the some pricing that those the be thought a businesses. on and team Crow a good exceptional. movement was zeroed Trammell fit with And Our team search for of companies Telford team, driven -- by a relationship that might

trend. the to a was of acquisition of thought in We Telford. effort led secular also that way And very the team that much

Mitch Germain

coming second when quarter with think, -- kind your outlook, looks on like shook Real XQ last there Investments Is some and missing? is outlook lighter obviously today, in last in maybe a you little to spoke it anything or Europe Estate raised than to Leah, you there seat Investments seems of GWS. you to possibly that things It Real then, in your out Estate mind, had how my that sitting in kind disruption additional bit to question, sitting regards I the us expenses And you that from about XQ, of we're like think else my way to or in the you expected. the reaffirmed.

Leah Stearns

lot just driven that's timing. I in we It's would have development a that not of would the say by around just I change fair. that Real portfolio seeing place. market is we're Investments say No. changes the Estate

industrial project move won't for until a until then, in, scheduled triggering close recognition we next that is extension, a that the isn't they it's have, buyer event happen one fully XX-day option project example, close exercise have that fully multifamily But, and we the that. tenants expect year. we And QX. that leased, and For but had to the the will in

with change of or So, transacting these drivers fundamental to view we these their cap in assets rates. terms respect how cap rates aren't of

for in markets will business certainly Real Estate timing I'd So, capital really the those Investments Telford benefit And altogether GWS say, from development make I up and feel projects. good business. about and for that the shift our leasing and

Operator

a is go you. Please question Instructions] KBW. Jade Rahmani Thank Your next from [Operator question follow-up with ahead.

Ryan Tomasello

have technology recent to respect taking made everyone. again. Hi, with of the follow-up. strategies. Thanks for some your announcements few A Ryan, their peers

the was hoping and metrics initiatives on relates wondering as internal investment updated M&A. just with it any specific can maybe in I respect the revenue or was clients share thoughts out percentage you've if you to proprietary of or had us amount from initiatives benefit are of utilizing Bob, you can specific that provide tech you're CBRE's that with to you generating called that both, CBRE's these of So, technology some I your producers perhaps or past. margin potentially And,

Bob Sulentic

-- strategy, They've is her in data to deliver our call our Ryan, and clients. call large exactly our can things done. you a business our what get Yes. that professionals me we're came the leaders we're Everything to that emanated spread basic across all gotten technology, in building tools attention now. from first working and There we our technology business they're all our a our with strong business to doing an done suite let and along business. we of what digital for use team Chandra first use our business their and that security, we infrastructure tools business that excellent they've with market-facing base technology of our enablement trying turned what us, create run has on. secure tell to of lines Dhandapani to with team

key and we're using, focus the in there'll very have our on But, XXXX. on to in comment metrics of of don't metrics. talk of process In going we're and adoption tracking many through we're be tools budgeting business, cases, against cases, with people going exactly kinds where adoption financial focus all to of is many, jointly except up. we're the and our trying what in of team to trend and metrics on all efforts we're for our in ton now We We And invest field that. satisfied our now. out tools we're And may those continue. between want you adoption that. focus that's to figure D&T that a to which externally And our expect should consider more is Leah, that specific about there continue aspects specific push to are, enablement proprietary. other ton to a We're shifting to where be But, those you that we spend tools. more adoption,

Leah Stearns

we of will is that really that drive we spend we part efficiency expenditure to maximizing our investments really I’d or that through ensure And capital focused are both, in business. enablement that just utility for say, spent capital that expenditures from the clients program technology XXXX and on also XXXX drive through in get about our we've producers, but the spend. of half a the our

things also So, and benefiting workflow like the there are that robotics automation are business.

in investing our the that we have to services clients and also we're We experience, Host like enhance provide occupier for investor clients. solutions that

also pursuit. like ability into that GWS transactions M&A we've and perspective would invested to are And just enhancing win companies then, from I say, FacilitySource a large our

components, of the for it's internally that. business. we whether usage we the or side, experience to the different So, an think, GWS, that But, entire of the all attachment Host do around metric technology the I of FacilitySource and to it certainly track hard have on wrap adoption throughout it's services

Ryan Tomasello

the for Thanks appreciate that you taking commentary. follow-up. I

Operator

Thank you.

O'Shaughnessy comes question with Patrick from ahead. next Your Raymond Please James. go

Patrick O’Shaughnessy

than about is profile within existing recent margin any those solutions, to the within kind base client different selling holistic wins you your seem more Curious GWS? companies, be given GWS. margin Is the your of of profile that

Leah Stearns

types depends services transaction it agreeing profiles stickiness there or higher we they're connectivity as client. have the It that a with example, on on client that for. a in that that products that some the all advisory. to we type serve greater the one-off we depends on We really provide, increase number again say margin for But, is signing of of than do, on really contract we of -- them slightly I the manage believe, of transactions GWS And, as and up as within on we're do we activity basis. the broader services

certainly think a side. the margin there I on the just benefit, not but relationship So, is on certainly also that side

Patrick O’Shaughnessy

of is in And is X% advisory revenue it's sense to additional like a XXXX you looks advisory it or level downside sales to around that sustainable the down get tracking this on at then, there like we're do Do basis. local EMEA, risk currently? XX% currency a feel EMEA in that you kind sales in

Leah Stearns

okay actually also and We the But, been or strength saw bit well. being we've has quarter, given with CBRE Brexit. The continent uncertainty has the with in broader the The Italy I think a has a terms been of there sales advisory is a of in done that, around. say, terms that two market, softness ago. We EMEA, relative began In overall fairly performance think to that I quarter to something the think, I'd see really currency. I that on Continent in been markets about had market softer. local France in other X% down reasonably slightly, down

Operator

Thank you.

end question-and-answer turn back Mr. our We of have Sulentic to reached Bob the will I closing session. call And for remarks. now the over

Bob Sulentic

when And results. we months year-end to look review everyone. you to three our forward Thanks, about in talking we

Operator

lines This time. disconnect Thank now Thank your may at concludes this participation. you you for today’s you. conference. your And,

CBRE (CBRE) 6 Nov 192019 Q3 Earnings call transcript