CBRE - Earnings call transcript Q1 2022

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Operator

Greetings and welcome to the CBRE’s Q1 2022 Earnings Conference Call. At this time, all participants are a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would like to turn this conference over to your host, Ms. President Relations Vice Strategic Senior Farahmand, of and Investor Finance. Kristyn you. Thank may Ma'am your presentation. you begin

Kristyn Farahmand

our that everyone, morning, earnings we release posted Earlier XXXX to Relations Investor conference today, file materials. our website, as which prepared cbre.com, page deck announcing on well a press that the to supplemental a use as presentation with Good issued our welcome can follow Excel call. and CBRE's results, is financial first quarter contains remarks additional of slide an along you along with

of integration you on matters that contains outlook, and remind regarding the Before expectations statements we other not rate, operations, market repurchases, call, of of no today's a effect these share statements kick undertake and regarding fact. Examples deployment performance tax that pandemic the of remind and the contained performance, including factors business risks update financial qualitative our and include CBRE's profitability, consider involve share, off capital future net you other these I'll that and obligation leverage, we transactions statements circumstances. uncertainties. this urge We growth this events presentation prospects, and information COVID call and reflect historical to subsequent environment to the any tension, strategy acquisitions effective expenses, to that are number XXXX forward-looking geo-political you and including or the and

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

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

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

Our our strategy our will agenda will playing Chief call Investment Financial we'll detail driving the as open simplicity comment Emma XXXX Officer highlights will the balance to our Then adjusted EPS and the morning's for our discuss updated diversification dimension referring as and sheet be for in that CEO quarter note on quarter and and are Giamartino, questions. outlook. core our Please Bob first Sulentic, this in four briefly and call role EPS are now up growth. for follows core Then that purposes. we qualitative President

adjusted core fair Additionally, non-core investments. we equivalent but core value EPS to the is are also adjustments reporting related EBITDA, like which to EBITDA, excludes

please Bob. I call to Now over to turn turn X the Slide as

Bob Sulentic

Notably expense gains U.S. while revenue these overall keeping strong above the global growth rebound We sales and year revenue lag nicely U.S. and CBRE Asia-Pacific. everyone. net EPS more revenue every suppressed And XX% and GAAP good Thank office and strong which out excellent is in improved EMEA core QX activity also both office, pre-pandemic us. continued XXXX leasing levels. The is surpassed in the business EPS the across world. to all three strong is and retail a XX% with check, below The corner maintained strong increased priority and morning, in quarter. XX% Office remained were momentum. significantly, of first velocity from than growth one, property multifamily in and for you, but saw respectively Kristyn. rebound up the encouraging. virtually industrial in peak. XXXX top Despite momentum continued the revenues We levels in COVID started levels has Office for leasing segments. achieved in leasing Globally, XX%

while Our margin below first net was XX% discretionary notably XXXX XXX over prior expenses levels, quarter, basis points revenue core quarter, period. were the year, XX% same revenue EBITDA net on improved the up versus

business diversify about execute regularly both clients of and organically dimensions and to strategy four we've our last lines talked across, years, through continue the We broadly, geographies. business, over investment couple types, a to the asset

the the multifamily how in benefiting in Our and from classes, quarter parts we serve performance that which asset are for our Examples we working. effectively purposeful drives been continued from is growth this strategy trends. saw of making investments the business gains industrial home include and invest broadly. We enduring have

we an keeping that of elevated exit million. manage are clip. particularly $XXX continue business, facilities geographies, to word & local Our totaled areas perform and see of continues we North know expectations, we country with facilities repurchases Townsend to share our growth. employees management early cash business lines top of where our business, growth strong to Turner project returning most of which multinational for ahead some of several decided I'll to our our mind management Year-to-date our Asia, at of of our and about Notably, consistent deployed enthusiastic are obligations. cash global in infrastructure, both while We the about bring shareholders financially strategically Ukraine, have I management in in offering, added and we sustainability operationally, March, resources project many into dimensions to In services. for also significant natural close contractual clients, is that you. being they to the with and and is generate particularly Russia while

the aggression. the brave call are people's outlook. discuss Ukrainian With will to We over I'll by unprovoked resistance that, quarter Emma, who the turn Russia's to inspired the and

Emma Giamartino

in results financial began by a ever double to and Slide first strongest growth Consolidated turn our the were of revenue year segments. Thanks digit operating each segment Bob. operating profit quarter. for supported performance with our CBRE three X. Please

compared Altus XX% our Power particularly a mark-to-market froze As EPS, in XX% due stake. also excluded GAAP Bob largely $XX Altus’ non-cash mostly we the with $X.XX noted in was from XXXX, The valuation XXXX. core GAAP below realized evaluation million which EPS earnings. EPS QX EPS we core our non-core QX million a $XX to was approximately up $X.XX, to quarter, overhead change to grew during our but $X.XX. gain Corporate QX, reversed while the core of the investments, fell for

to continue overall full corporate year. slightly XXXX the to expect for decline from overhead levels We

Advisory expectations for across $X.X up we billion across ahead net results up growth of particular across North and margins, earnings. activities and and our Asia Advisory last of see Strong are markets, the revenue strong year. look Slide turn capital to about Within property X business. with a to sales reached versus Our at year the own their revenue, broad-based the seeing Please Services, start record We're strong momentum excited we're deeper major first our continue segment. the quarter geographies year. with standouts. sales from XX% all was sales revenue being XX% last Pacific, U.S. total our

on industrial, to impact We Globally from rising sales rates and see first property office, sales. prior a material all multifamily levels. retail their peak surpassed have yet quarter

largest the sizeable is While made office comprised in and it gains property asset types. the levels, about reflecting sales QX nearly of prior across peak we've remains other the XXXX, property the XX% to one-third versus class in quarter

attractive types. multifamily rose multifamily government Our Industrial to highly reflected increase revenue quarter agency originations for property liquid assets, agency Lending XX% XXXX. most reduced over robust activity originations to for create markets gains mortgage across the excluding borrowers compared continued continue remained with during lending and of origination events Lower to activity lead debt. OMSR private which terms lenders continuing private to volumes. for and QX

all revenue agency of from year to private XX% QX Our set while first global revenue OMSR of reflecting regions. this omicron continued global Europe Leasing was the gains office in and shift levels challenges, modestly we peak revenue pose encouraged continental XXXX. the peak quarter declined to in $XX level from up year's variant and last leasing led COVID rose Continuing [ph] by were trends eclipsed fall U.S. Global prior recent short million see significantly quarter the in improved from QX lenders. over suppress the first last strongly, industrial

are started our office XX.X% the year fees. from footprints office and expected, their is office occupy our XX% approach Despite to QX sales business, to in of recovery over end requirements of clients over U.S. contract over our up and roll being and not that space. stronger weighted the to rates net $XXX will operating XX% drives to persistent a XX% sales planning more to advisory with lower upgrade XXXX cost services macro brokers the deals expect margin for during commission leases office over from their higher workplace the return, in surveyed often and activity strong We COVID heightened either the inflation, years. Advisory QX and producing hybrid interest Prudent with only remained continue of a significantly geopolitical three office planning depressed This prior clear XXXX. OMSR or management heavily expense rising but positive project revenue, profits increasing of than leasing next due since highest them management million for also lease levels our as largely operating tensions, segment expand April. for has up space are offset gains. and XX.X% risk improve as revenue occupier year from to any changes advisory the of their

grew XX%. XX, over to or revenue Turning GWS on net Slide $XXX million

and XX% rose management overall with revenue X%. facilities Excluding Turner nearly & up net management up Townsend project X%

new revenue Our business points facilities management progresses. accelerating significantly year the to pipeline as

and space visibility gain for about their clients need utilization their As less more services. outsourcing

Overall benefiting prior operating net line is or & profit in defense, After in of margins organically. revenue QX pipeline at expectations. this very Turner a acquisition. X% prospects. diversified revenue level declined to slightly grew logistics services, our net financial segment with a grew acquisition on record GWS from the XX% mix automotive, XX.X% and Margins with over retail Townsend year from Our

toward margin of subside slight a expect pressure to the We year. end the

last outstanding modestly QX XX, operating Turning better than segment $XXX versus up segment REI to beginning $XXX Revenue our posted to the profit year. our XX% increased another to year million quarter. was expectations of which and million, $XXX of the grew million at Slide

in post continued a quarter Industrial million business year. Development from and segment quarter, results development notably of $XXX in benefiting the first first Multifamily. co-investment rates. up the in We and prior pipeline multiple million $XX to nearly sales in strong operating large from saw compressed asset cap contributed Our the excellent profit

is of Looking ahead, to first weighted half to the be expected year. profit operating the development

our is in this movement could the any periods, of development between asset common of However, impact quarterly sales which cadence results. business

levels. about we've portfolio in-process annually. Our into X% billion, profit portfolio to us Historically $XX growth. operating record development almost profit reached pipeline visibility development more billion, both gives long-term This our converted into of rose strong, operating to $XX than X% and in-process

combined the Our and industrial pipeline, up Fee and of well make with comprise XX% development placed activity. business three is over also than build-to-suits and more of strategically in-process multifamily in-process portfolio. quarters development

X% Our versus investment strong by accounting was in businesses, inflows decline our declined rates. nearly operating million with turned quarter. methodology gain called for for partially management this year. property in higher net supported about $XX climbing pipeline last from by and offset out booked last We've by capital and QX, development management the which performance of AUM period business. unfavorable same as operating AUM business year's $XXX also investment $X respectively growth in a asset we from only by The driven co-investment billion a million well partnership record between gain growth our to to also of management has growth Absent due and investment one-time management profit driven was a while time. FX returns, profit infrastructure over benefit reached benefited improved billion at valuations AUM appreciating values. QX and by the new Investment the logistics and XX% develop as X% $X which continued supported

shares than of more Slide record quarter, a the first in to repurchased CBRE amount. Turning XX $XXX million

year, As We for $XXX May million of M&A Xrd mentioned, through and of for repurchases Bob repurchase the year-to-date the substantial opportunities. absent, anticipate pace shares nearly balance are X compelling maintaining million. we significant a

any X.X seasonally well Net midpoint sheet. purchases, leverage QX, target below committed of turns of We our just range. for seasonally below of revenue is XXXX, cash a This to X an at X-turn allowing end times end M&A in of the under repurchases. employee incentive share the remaining substantial our to quarter. and also typical compensation was we of zero opportunities maintaining balance at use Absent pace higher remain of this for elevated even anticipate earnings despite the first light durable share the

full teams the Turning of to as for achieving ahead, Slide year the earnings expectation end February. mid-to-high the for growth look we that we XX, consolidated at we have core same provided

Our momentum. to business continues today strong have

markets and work and transaction investment management softened activity and core February. markets. growing contractual and our fundamentals improving management, and project since remaining remains are strong lease estate through has in of these robust. and healthy economic in have rapidly is provided management multifamily continued Materially April backdrop earnings fundamentals risen outlook facilities and trends, retail office, Commercial also the base we've large Our sales real positive with industrial interest in offsetting late broad rates

taken We of consideration our expectations. some year have dynamics in full these into reaffirming

should sustain we Specifically benefiting our of any an is business we we particular, expect offset downturn help our period that potential of favored some business. leasing resilient time. to from of and In office weakening and tailwinds strong expect economic for other have emerge more the that to parts secularly parts noted

can should we quickly measures, cost implement warrant. identified have conditions we market Additionally,

hand, macro supportive be our current environment if remains to the the year, On could the expectations. for the there of upside other rest

not Additionally, from does our M&A activity share include incremental outlook benefit any repurchases. or

to to With you that allocators aggressively second expected results weaker look the environment. operator, in rest of a to July. forward when questions. We for updating economic capital We the positioned report year please we would active open be in move for quarter line be and the

Operator

[Operator Instructions] Luthra of Goldman Sachs. with comes from the Our question line first Chandni

You question. may with proceed your

Chandni Luthra

volatility, taking Thank opportunities? front? talked morning. tougher both heightened about M&A you you about you the my obviously think considerations mean, into more us is for multiples Bob, I think you've a this and how do in seeing for you environment on good environment? Emma now could right could about what Hi, then give you are question. talk M&A but you macro looking potential insight And some is how there in pipeline do M&A

Bob Sulentic

our want in Chandni, to going I that then addition Emma I'm activities. remind same. everybody M&A and do being oversees Emma to going to CFO, our ask the I'm comment to to

want but opportunity our of across to things if we redundant inflation are I business two and gets she's to a diversification at that good both identify for to can to dimensions we with our opportunities our our or and serve across core acquisitions, recently, talk of what little our operations clients. for to start and traditionally benefit want on that great world acquisition. are driving say with capability to and to really of I'm add to competency will offer say So types we're do such have our But bit, help areas our business. recession that want focused notion pipeline base looking the being around environment got we of we and I company our up acquisitions also candidates. our we for insight us resources product we've leaders service we that looked Acquisitions We're clients to means been of a type, drive bit a into is across also fit and us the that into I Prices a We expect about; business increasingly of because a that that capital strong the might think of this. positioned types secular we good that really the we're which M&A a here, again. slows have add we queue our have M&A that think haven't But well might four that business tougher be ahead high a because type, a geography. at capability we to of that grow. invest the type, little been looking about it client careful and

you seen & very which can about course were early on give Townsend I ever us recently, a a acquisition. have acquisition Turner was of examples on as as is good best the unique and of the for One returns us big it I've

that with I'm that, ask to to going you Emma. So to add

Emma Giamartino

taking and we're does And my or strong can valuations said this this beyond M&A, rest so building of I that also that and that really incremental Yes. remarks when aggressive in will to for and we that important I is our advantage really pipeline that come XXXX would not believe just so for include down the ready any be can in it our will year we add we I but opportunity. this outlook M&A year this add it's be reiterate buyback. then of

So upside all to stands year, be and beyond. for should of our this XXXX that outlook and that

capital include material long-term does Our not outlook allocation.

Chandni Luthra

asset talked heard classes have lot really of of and to week the course mean, half. Got kind been industrial I public doing citing gears pulling two of well, And transaction recently large And then leveraged – it. pause a last we've a about and excess in Amazon them heard capacity from reads switching Multifamily of from talking that warehousing more activity, Industrial. seeing over a And out. warehousing. also in about most buyers we've

I So ahead. asset activity that What what doing rates do on been you, think think here? you in it's mean, you as are strong very do slow these you I early but do see for you are classes seeing these signs? know front?

Bob Sulentic

a multi-layered you strong. lot you assets. Fundamentals value Chandni. amount rates. look have on you that's and have a a at but cost focus fundamentals of cap of out the of to the also of look to Well, pursuing the There's at also are question, there on There's when assets and of capital look of trading assets that's exceptionally focus the debt, lot at those

been renters it's there and out upward of rents new it's on low Vacancy in there's online. The the strong is is as historically coming product in than XX more relative the is amount demand there as in to XX of class. amount vacancy think the pressure in There's years. asset multifamily also I as market years. as been pent-up low

bodes well assets. So of the for that those value

and The cited think with is that assets asset rates a is confidence going level have one and those the going other above up. assets. can Construction little it's about for be a allowed rental multifamily with things cost it gets to as secondary core consider challenge, sometimes today industrial that they by the when on that's into of class that go comes cost modern markets. there extremely which important not buys look fundamentals about so thing when cost as make class, sector, investors the Fundamentals strong assets, up. the markets a market have extreme for you our gateway it which cost. dynamic. and as when as it's of industrial – and but think the asset a replacement assets, the is large they replacement but decent is play to bit the the cost missed well. assets assets are is and is big where The I going And for always problem around product, at what's the people is is going what of most think pay that how you up positive value with you Anybody into of markets U.S. And the of primarily, we that

and space tell last I the their York been demand players half Amazon was couple And the was is last it years, the market the exists So biggest any news Amazon changed. important. over the really fundamentals the There's you most down There's in in They've meeting across out comment Jersey percentage up – in that months that there. – with slowed by the strong, sold industrial what was in and out, the haven't right? the market XXXX for XX of it's biggest not strong will there. the U.S. one leaser yesterday I their New available space New of active

industrial for So and if if is we're debt going go there period about for with will, happen if where a becomes year this to relatively into our baked be we're values take recession, could it [indiscernible] up, that's assets the time which bullish at a about and to what's expensive the same next sellers that and both when year. very aware headed do multifamily we're there sideline, of more time and thoughts the buyers

Chandni Luthra

for Thanks color. Bob all that

Operator

Our the ISI. with from next comes question of Evercore line Steve Sakwa

may with your You proceed question.

Steve Sakwa

Emma. to kind to and made. Bob just circle that morning of Good both wanted I some comments of Thanks. the you Yes. back

had great basically You a quarter. first

the this guess good your good to kind message? a You're very at really keeping is was starter I'm You was And raising but I'm of upside. unchanged a the is potential point. about all or to keeping weave guidance of guidance the on uncertainty I numbers the to point? sort the kind from I way is, macro just you April April into quarter. said reading upside of probably start that just there trying simple that to comments, it at off this Is guess

Emma Giamartino

So, to we think around [indiscernible] weren't environment macro color the be would to I outlook. seeing if some yes, that that, we pressures clear, and more put but well, from be increasing

a we've happen a is And been that said number are second so of that are strong. time the outlook in really to in the factors QX we Like expected And we sensitizing confidence February. that going will there us of think of spent has through giving that deliver we'll to you – half what lot year. the

interest second be our not of secularly very in our parts our to so rates rises we our business everyone that year, there again, by then will will favorite are half remind levers about upside. want want remarks, mention is the that be in will included my I business. anticipating also as business the cost that that Our And pipelines I transaction talked we which place. And in slowdowns and allocation capital if to have in outlook, I for the are our parts be offset expected of strong, QX in of

turn So and then there we're is different pressure. expecting, in a direction things if more

we that that cost and can can XXXX. proven levers through pull, pull We XXXX know and we have we've we

next happen going also really thinking look us then sensitivities a gives continue for interest if we rise. around towards to expect that So everyone's know ran what's And about XXXX, to some we amount of we holds everything And about tremendous rates we we really XXXX. said that XXXX year what confidence and because in XXXX.

we – are more have We contractual.

revenue ever have we'll believe potentially our favorite than markets We've those pressure our in see capital – And had in and development. going to in are we've growing areas. where really more recurring before. offset parts like invested in of We secularly areas we business

So where very we and in feel is XXXX we're there talking to think XXXX, positively and about. going we're about upside what to go

Steve Sakwa

And Great. then just about allocation. the capital think to guess I trying

So point kind more it like words in but certainly in are, this of mouth just at sounds acquisitions It lot Can I you're the don't QX. math want your part to walk like on you and could to materially than a maybe through capital of maybe we willing But us thinking acceleration hold deploy QX put and the of thought? was the buybacks. be nice of kind it originally early that? about higher in how you're into see sounds to the buybacks share

Emma Giamartino

few that strategy past talked over unchanged. quarters allocation capital about remains the So the we've

huge we don't when we that that year. M&A that would we're said deliver can high and we opportunities for very within important delivering are and We to prioritizing strategic opportunities. valuations we so executing see patient. those M&A focused it's accretive are make pipeline, We well with on a But when see arise above we're are But we buybacks. really we're transformational buybacks the that that a through sure returns always and opportunity returns want building balance on

We've what so done. And opportunity. seen value we've a that's

been attractive. has Our price very

shares that the as year. to back will we long buy through rest continue of continues as So the

Steve Sakwa

for it Great. Thanks. me. That's

Operator

Our with Paolone comes next the of from question line JPMorgan. Anthony

You may your proceed question. with

Anthony Paolone

Yes, thank you.

and my pretty within you brackets some around one just on given guess expectations your like those, Did so guidance quarter, thing lease revenue last more change and for anything I that Emma, had sales Just specific mind the forth? GWS had Advisory, of on and I some REI.

Emma Giamartino

don't we're our in really factor business single one a we trajectory. a more And are impact making focus see consolidated levers. have should our diversified we mature, long-term performance, as quarter growth or shift, this where even on because we you can multiple believe So, near-term to

extrapolate Bob profits in not but X% you remarks year mentioned be those in because of our if and expected I'm mentioned that the comment specific now way of development. the this the It to sustainability do move sustainability our want are And potentially on in stability XXXX We've to So, that, ahead about to slowdown Right expect my about profit comment simply with the of the primarily are of to annual second the this development environment. look you an look is the that but and and parts then more year. both talked majority I business, to on I half in our completed. to we going in a our to hit we X% pipeline. those where And of doesn't I've timing, range, said of to period. do I that XX-month these X% and of you see when markets. capital at and we're have if idea half the last first give profits going but that of that's it projects an basis, given It's at the any anything of to in X% slightly SOP on external development can think, profits. to quarter, to the simply process converts best stability of in portfolio typically as

Anthony Paolone

business Thanks of business to done and of side? like the maybe And the face-to-face. any deals year places of then or and you margins, takes seems ground? about other the you out still talk EBITDA costs think about profitable last you can or stuff, kind Zoom on any that are is that Because for you're had there's during being people accelerated, there if of pandemic that. Okay. making up less lot lot Are had deals now with pressure any a puts a to regards business the been over it or where and getting slowing but margin back taken and where parts

Emma Giamartino

within to is and costs where only that’s place just the reversion GWS we QX our anticipated seeing which in our come levels. So back, talked pre-pandemic we're business. And about

going During people and facilities servicing the we buildings, buildings. and to office were although weren't pandemic, disabilities

And so an the cost in to way. service those unusual declined buildings

So we’re we’re GWS we’re some And in with going normal reverting business. margin our back, seeing this to quarter. pressure

expect We mediate to throughout that like this year. to

are through within margins remainder actually the of stronger is evidence And that’s measures But pretty meaningfully. legacy so mentioned all tick to a labor rest expected control ability put than in simply slight our market. our seeing of place. challenge that we’re hiring cost Bob year. the the we within somewhat our advisory our business in flowed we cost up seeing margins of our business, So down has this the the of and you’re GWS costs quarter of because discretionary

margins. feel really we our So good about

Anthony Paolone

Okay. then about comment the made of some on from XXXX. and GSEs side, question last their they the moving the away multifamily you caps And had I lending thought raised a for just

surprised little rates think big just overall that a Can piece was happens to I up? about move part there, what and/or of happening servicing either And So a that. piece? you by GSE as the just you how bit origination what's talk business your is mortgage

Bob Sulentic

relates this and very servicing, we're as a to become which first see the year. to lending us. business year business is all, big Tony, quarter, business. GSE it and for we what's big going And very rest think very of of lending last part a out recurring, It's part next mortgage of more a the private the contractual – in very has year, big that's for moved the to of watching and of to our well, play – first quarter

partly expect We from we take business on to from that continue we the source, but that others. grow partly also from that business

Anthony Paolone

going think with you this lenders guess, even have, people I are just to part the year? private ability though, mean, lend to when more do they I why GSE Okay. the

Emma Giamartino

capital two very So, has there's factors. with outcompeted. so are One, terms, aggressive simply their pulled private back. been lending GSEs then the being GSEs And the

liquidity, same If this with year last didn't markets you been think that to provide have the needed quarter, about because they of that same QX And liquidity. flooded they need. have

Anthony Paolone

Okay, got you. Thank it.

Operator

Raymond comes your next with of OShaughnessy James, you with Our might to the question Patrick question. proceed line

David Farnum

EMEA your ask for to up compared market Patrick. good How other region It's a David to conditions business. as are on geographies? the Hey, holding on morning. in Wanted that question Farnum

Bob Sulentic

history right just EMEA is over what for there and in Turner which I meeting, well, & well. advisory good now capital coming there's was invested are fundamentals the business quite our is holding would Multifamilies here. Board across – it's are our company. up Europe leasing I in really week. and performing class last Townsend is be amounts large better asset to over are found a doing by company right across way in multifamily was and strong UK we across smaller industrial the the I it is out extremely now, the there business conditions back, Market was And strong is that commercial than performed over of of over our business Europe and is ever say the performing than assets. there there

that feeling really business about now. good we're So

David Farnum

that about business been Great, you've place gears and thanks. a of the what & organization? Turner working moment, to few with integration now, business of months rest how then the maybe between for Townsend sort Turner taken a switching And the has for Townsend &

Bob Sulentic

Townsend. Townsend. that Turner has bought integration the govern Turner the directors, & the largely it's remains to remember XX% partners And we that integration. of the with three that a of We Well, directors three through board company legacy business, revenue a been in from important & directors CBRE of business XX% partners from

We have tried synergies seek cost out not of deal. to that

business infrastructure, our capability. tried into with an relationships them that the working the not integration our added bring The to way is way as infrastructure go-to-market. client is to is they have the that progressing we're We alter supports them

We The they've business, it economics of full model. kept grown a Company, traditional Townsend model. have percent would wanted brand. a not & providing Turner culture best in on comp their Crow Townsend and we we've the way And Trammell them it, Turner that. They them but grow roughly have developers. the company that that operated They to is XX% integration. hundred we're independently. modeled that liked a for other the to Crow help some operate & They Trammell tremendously. to go own after be Company its we resources although tremendous has of They've our

the so or months into relationship. six We’re

And of were a remarks, it. to together Turner fully do capacity, in we haven't been is to bunch capacity we proceeding financially & running do, both about like utilized. to proceed. and Townsend that said, able we would operationally is like add they would They're them we yet better it's simply. the and with get quite I my it As had stuff opening would that thought we There than made when bullish investment that and to at as capacity

commented & of that to associated there's year you little gave that happen of Emma what is out. good we some might Turner Townsend Turner because and think Townsend upside So, We she next beyond. snapshot areas benefited and play And XXXX the of of kind might operate & on there in. think they upside secularly deal that when with a how with

David Farnum

Excellent. Thanks for the color.

Operator

the KBW, your with question. question may line next of with comes Jade Our to you Rahmani receive

Jade Rahmani

to mortgage mortgage potential, just company's little and origination, capabilities services more as, existing of a overall, or areas much. property such new I Thank in to potentially example, You mentioned footprint sales property and of you and it as the greatest be size, estate for size infrastructure core a could growth where growth ratio bit the where within the real and you areas. investing When sales you as at footprint company very the energy if mortgage look scale would see was very be and reduced, perhaps renewables in the ratio? less you strong wondering do opportunities?

Bob Sulentic

Jade. that There's question, a lot there in

pieces try you to the take off me ask Let as them.

those management those to sustainability brings a businesses. management are through & services for So lines regards growth & and lines that product things facilities that see capability many to does Infrastructure, not Turner us helps to in necessarily all, energy/sustainability, that first regard profit our the And the company. line, but in across of development property it's management we're project and and businesses our of separate with to embedding grow you're important them. infrastructure sustainability product And Townsend. going then in Townsend directly Turner with

growth You're diversified across this client they've and AUM really drum beat and nicely. business, going investment our important, in I so it's when very management But grown business. product type our because infrastructure business, look see broadly type, to line want the again, are to service you of across and type, through we there

renewing they very those like office we the kind go part to for all on as all et going and deeper And from we get looks into growing What on a to four the at you going are We office on reorienting there's economy to of an out as sustainability, the not The over get about, interest when compared in to look advisory business example kind lot occupiers often going But come to look few with what's that. of business. grow four going occupiers in our significantly. talked grow provide what's with have. Ironically, think cap tailwinds the or we actually going that in of to years or see into the be the we the we're part things same rates very, business, years Project the of era, at it's there. most. is to grow three those something I where two have for insight happened around they'll the growth And actually there. I'll and part should their most some tailwinds three time, look the to to going and pressure business, offices pipeline good years, for passing. it the everybody or some economic to to with downturns subjected dimensions, that with think dimensions. whole, over about economy At and knows work technology last give of going downward see where question, faced be a very that with all our of that's got secular with you we haven't encouraged business likely in well, business part – might is you and next we've as our we're you building other at continues if going to most during at that rates cetera. it companies what we growth a way We're some use, the we we back to So that last be that COVID do believe the big what secular big space, across world that mentioned is our our the now the back Asia. the that's going management, world benefit. to us. which office be least of headwinds future the a then two think area sustainable world should going continue And real We've leases is changing when reconfigure

our in It's If you X% or more X% years, X% business advisory our be of in advisory North to really went for probably of business no on our us, this what's likely us, China, to back X% five that six business. to of Asia is was than growing it for Korea much growing Hong Japan really is Kong us. going because in year. Not growing for China of but really is

to when now. is have in and think We a out things in then we eventually, sort Taiwan, nice kick business going China

for is year that's things opportunity little of of growth next if this even those Emma about a into things when mild pockets drive and easier about to the going go some of if in to those course, areas, get it's economy, we're about buy things then, acquisitions And into slow why a and four out what's go thinks if all got might rest And even have we capital pretty on to what of we've we than So year recession, dimensions. tough where talks across the there. happen today. it sit down, encouraged we in

Jade Rahmani

estate, could investors headwind. from asset are set two those estate lower allocation investors, have So to markets relative answer overall allocations the a their questions? changes? any you a real institutional allocations, tone to all at be – that from dry powder, How you would been into In terms strategy? boon but equity are real now in of does equity terms to deploy lower detecting pressure under markets looking And come because capital of

Bob Sulentic

capital and estate later that and this you people will assets. But year we but around equities. effect, denominator down for asset really there the And they right more real put around bigger real If institutional around now interruption fundamentals on then in class the and for there I do and capital quality could portfolios the and the be an institutions is tell with is growing. wondering buying if world, a depending base is and world, we've may downward of happens is up more to an commercial could estate There real seen long-term. than on becomes an those the be pressure is the that's year, we're this the what capital next capital. have like watch the interruption believe next that's part of long-term estate aimed real going assets assets. assets year, more that's holds equity institutional And the and being multifamily what trajectory and capital more estate a is world at debt And for impact little go commercial some there

is company that long-term for really we compete in. nice, this trend think our sector we the a in So

Jade Rahmani

at forward gap more as Thank so then basis. I'm skyrocketing that been the And looking on on debt know, forward. just are in looking lenders, lastly rents been caps XX-month multifamily, Do higher last funds you the relative you. they're their considering NOI, putting year? They're of multifamily all trailing one and has you GSE flow GSEs at issues and flexible they And alleviating have underwrite a the that a other sure than disadvantage. see cash XX%

Emma Giamartino

are. GSEs do we to private speed and where the come as So markets increase up valuations that the alleviating somewhat to see

gain do expect moves further into into so as of the have their the they they – that's up. leadership go pick we transition new and is factors that in leadership place, One comes some GSEs that to term, through the GSEs impacting as

Jade Rahmani

much. very you Thank

Operator

next Our comes Blair. the from question Stephen William with Sheldon line of

You your with may question. proceed

Stephen Sheldon

Good and results nice here. morning Thanks. Hi.

adoption ownership. trend the Do I me, shifting you back more continued longer-term less estate private has think for versus and and meant institutions capital what recurring normally both make hands, trend years? so, in become as given on velocity guess, of over in look that time? could or last activity towards one ownership, shorter few holding periods? the terms slightly Just towards we of it's And real if changing more markets has more outsourcing the over that And that properties GWS trend

Bob Sulentic

that few institutions a more is to about a business. our trend One to things are bit trade tended really important have that owners. There is that non-institutional than historically

to the adds of brokerage themselves. velocity the That good. assets of brokerage that's with So associated and brokerage our both debt businesses,

of big product family like big family, these are not with lines and is we've By to the working with these We're our connected is across they company and that us. powerful of estate companies. what's that. bigger the institutions comfortably business in so us a they and incredibly of – and feel offer use with use Secondly, happening is geographies a they occupiers investors. fewer beneficiary that of controlling getting we of bigger. to And invest to assets with these be with a group instead one hard providers. a tend that that institutions so that the a can that our occupiers been real can we're real service our estate, That's really are for of trend big a with to fewer and growing; want way, And they're we're done things work beneficiary that of big beneficiary

to expect continue. We it expect or consider it we to

of assets, of so thing the it's is and happening. And to going with driver think to a secular we positive we you're ownership growth the describing, and – institutional and you think for be happen CBRE, going when is what the in it occupiers, Stephen, the same look at

Stephen Sheldon

Great. Thank you.

Operator

closing like question-and-answer remarks. to to we over the today's and of reached would Sulentic gentlemen, Ladies end call have Bob session. I for Mr. back this turn

Bob Sulentic

second joining we three Thanks, quarter our we us today, look in when months to for you earnings. talking to report everyone, forward and

Operator

conference. concludes This today's

your enjoy lines at you Thank your your of time. day. You this the and may rest disconnect participation, for

CBRE (CBRE) 5 May 222022 Q1 Earnings call transcript