CWK - Earnings call transcript Q3 2020 | Cushman & Wakefield plc

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Operator

Greetings. Welcome to the Cushman & Wakefield Third Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Leonard Texter.

You may begin.

Len Texter

again Call. & welcome XXXX Third and Conference Earnings you to Wakefield's Cushman Quarter Thank we a today the Earlier issued period. results our for financial press release announcing Investor can This found today's along at presentation release on with our Relations website ir.cushmanwakefield.com. be Forward-looking page Please labeled to Statements. turn the events. contains future presentation estimates based forward-looking our statements current Today's and forecasts on of These statements only estimates results actual should and be considered materially. may differ

of guidelines. non-GAAP non-GAAP Reconciliations within we call, as measures today's measures found and financial and measures refer financial financial to definitions our GAAP earnings are the in of of comparable please are tables of Also are by During currency. note rates to non-GAAP throughout SEC release periods comparison outlined appendix presentation local today's and XXXX in the presentation. of to financial that growth

presentation CEO, you on Brett? to turn For following begin And that our; our to Brett and over with along Executive I'd we'll with of Chairman White. the like X. Page those call

Brett White

call for recovery $XXX million. trends Thanks Len of we and across of business and EBITDA and are our fee adjusted consolidated in third showed quarter. trough $X.X revenue thank & everyone by second our billion revenue Overall, which you joining reported quarter brokerage against Wakefield by today. the performance the encouraged to experienced we Cushman the

the industry. exceeded Office the we by Feet timing our leadership Since workplace. performance including we has been our readiness EBITDA well leading Wakefield buildings on of execute of the of we the capturing Both market very operated In as to forecasts of this workplace office expectations. managing the X launched recovery growth revenue then, guide including early pandemic, commonplace. of published our an well forefront as thought while beginning continue the protocols hygiene of and could continued driving exploration evolution leveraging & to and review and market a of many full-service be now on research Additionally, our Since future at April, on costs in opportunities how office-based of considered recovery the prototype Cushman and our our the the building platform. role safely our demonstrate holistic

our it to unique of tenants. to important Wayfield role the leading & safety proper has play the addition a expertise, advantage In in Cushman comes industry that building hygiene when ensuring increasingly

Our and specific property ability self-perform management management the differentiator Wakefield & distinct marketplace. and capabilities gives services facility a to facility Cushman in

of lower buildings, with me overview transactional pandemic due the peace year. and compared to With being market-leading see back result, factor we platform cleaning to growth building resulting estate a in giving last for their is organizations that who let and see an to of results. while solid attracting in reopen with maintain across our by and start services were commercial business, our As demand used down owners continue real hygiene Consistent critical to consolidated confidence revenues as as mind. XX% workers a to by workplaces our and our C&W industry, Services tenants downturn, our safe

stable As which fact revenues annually expected mix overall by increased than our more over year. were and PM/FM represent last of half X% in

overall is strategically important to fee-based environments this. these a operating like of PM/FM business of functions real tied contractual challenging makes As the that essential assets. estate you in business are know commercial for this It part assignments our stability

across continues a pandemic lines. I ago, moment service growth opportunities the to As for mentioned create these

and office signage; course, partnering to delivered to in educate reopening actively in with addition suite protocols; on clients strategies comprehensive expectations provide we normal of return guides ranging example services to employees in to the our for For critical leaders are engaging standard services and from reporting installing and positive own contact our social PPE; on with case signage plans procuring partnering teams floor and X response and acquire distancing and using and in placement office sanitizer clients' and shields; customizing Feet plexiglass environments; industrial tracing. stations retail for to principles;

Our XX% to compared lines leasing year. capital down were respectively last and XX% markets and service

decline year-over-year note the favorably the in the trough important XX% However to second XX% were quarter declines compares experienced to that respectively. and where

XXXX the As due we brokerage about the we revenue, outlook think for the to than third quarter be quarter expect declines year-over-year fourth higher to comparisons.

year. pandemic. generated lower Decremental in for revenue across what activity. quarter XXXX third It's continued of Partially comparisons decline While of half from of principally brokerage offsetting XXXX to we savings the million on an the the quarter, Overall revenue cost consistent we fourth be the XXXX of EBITDA impact PM/FM on track the than year-over-year. $XXX on basis. the reflects represents was execution of mid-XXs our worth XX% million were brokerage We cost the with $XXX adjusted overlying management. full XXXX margins revenue the which a million to over second of down of our and in service better a are realizing grew year-to-date $XXX the onset stability expected brokerage the expected basis, noting brokerage was XXXX expectation quarter annualized at XXXX our that is year-over-year excellent to while lines in XX% trend the which decline for

the balance sheet. to Turning

totaling with of strong million and Our more liquidity $XXX billion. capitalization $X.X remains cash than quite

forward, us position opportunities to of other growth opportunities financial other us or strong advantage and take allow flexibility M&A given variety tremendous a and prepared us that arise. infill might through scenarios of has investments that Going will the economic for

very revenue uncertain are focus on EBITDA our now Expect strong Looking ahead, but year-over-year. and to cost continue. we're developing reduction to for right increase our operating environment, plans targeting a plans XXXX during

add recover. permanent markets in temporary improvement to replace put margin will those identified We in permanent reductions place cost executed COVID. to the further we will and for concrete earlier plans cost to long-term reductions have reductions These enable many of XXXX we before our cost as sustainable

team level operating like items compensation overall Duncan will variable in a in and costs a return increase an in spending XXXX see to more this on a Wakefield's to continue by challenging have bonus to to thought expertise, later. expect our clients. XXXX, very and and leadership important bit as In do never holistic & our throughout intelligence of be we proud that I more driven been However, global compared Cushman year. market cover execution normal to more summary, our detail

I'll see a each clients of and Wakefield capability, Cushman we to have real While we Duncan. resources like believe every commercial estate, to consolidation that accelerate firms that, the the day. over call And scale pandemic ahead will share & the face challenges challenging year likely to for our and the market the solve turn also with

Duncan Palmer

good and everyone. Brett Thanks, afternoon,

quarter wanted our on already mentioned. third covering to Before Brett items, a which results, I build couple of

itself. structure. As the quarter, in savings is March cost run we year total million through $XXX are these say in We've been taking $XXX actions XXXX said QX, actions permanent actively we the targeting complete. about full to savings substantially this in million our $XXX been These the and managing have announced on in past cost significant $XXX which third XXXX achieved Overall, rate million over of in include the annualized year. during starting savings cost calls, have benefits we achieved million end which around by

impacted and reduction and for temporary schedules travel, of target is actions businesses. including spend at In furloughs in compensation addition, savings, be a anticipated position non-fee significant annual work entertainment for included more Also, in part-time incentive to reduced significantly suppliers on XXXX. events, the below total earners in third-party

materials reductions, cost These different these as broker include to service geographies. earner shares, third-party have and a addition fee costs lower revenue In costs. variable lines reductions direct profit and labor across subcontractor truly and declined result client of commissions,

financial revolving of consisting is billion. cash credit third facility million availability quarter Our $X ended of on billion a strong. of of $X.X hand position and $XXX the We with liquidity

our have We on revolver. no borrowings outstanding

they We continue liquidity will our an the as consolidating to of economic cycle, ensure infill such industry. liquidity in flexibility our downturn position available to as be to strength investments part entire including a manage fund and M&A through where

arise. Fee down to our summarize -- for what trough financial help We On balance, compared quarter PM/FM in impact billion XX% in service fee on quarter we year. the were our X, brokerage saw over brokerage lines. than PM/FM less of and valuation in of revenue third service the $X.X and was for to we backdrop third somewhat June. other offset were With page improved the in should opportunities in last declines our declines stability continues trends develop are in the revenue pronounced and as quarter. grew saw lines key the that The data and second quarter. we the May to well-positioned

line service from revenues roughly second the sequentially third XX% to brokerage up Our quarter. were

basis, year-to-date for line full EBITDA adjusted million which XXXX. were execution $XXX of down strong the and XX% to continued Third expectation margins mid-XXs. on compared of with XX% decrementals XX% a quarter as the quarter in represents our year in Decremental was

fee we on Moving and to show by service revenue where line. X by pages and XX segment

For capital the brokerage were see second third appears declines to it in XXXX in leasing to XX% the quarter, the the decline respectively. lines quarter. to the were We generally saw a our We down trend to pleased and compared half service XX%, in markets second trough improvement that year-over-year and this continue lower and see expect COVID-driven the of trough.

XX%, to segments X% of brokerage where third last XXXX, flat experienced third were these in quarter Brokerage that of to quarter the each in the Overall, growth X% and of our PM/FM XX% service an fourth. compared which easier down year X% EMEA comparing in lines, quarter partially in our comparable lower up respectively. recall leasing third to three was was was XXXX the and However, the in revenue for third the declines quarter the down it's to fourth. the declined stability as Helping reportable we than important revenue revenue offset in year-to-date. with in declines APAC, and was

trends in Leasing a capital, half XXXX quarter. over XX. our service the and year-over-year with valuation were a XX% was our executed services operations the generates down low Vanke of up X% stable Excluding has line, on our to temporary the fee segments, adjusted basis strong With partially due line, JV with our services, our single-digit variety year-to-date. and for X% PM/FM was in $XX was the up other which EBITDA typically was partially COVID X%, for the facility PM/FM for annualized up review Americas segment our the This cash we'll the flow year-over-year PM/FM also mitigated our year impact revenue business quarter. through facility PM/FM, major detailed half typically on These of XX%, for cost facility solid our down represents by markets growth. PM/FM million services is quarter. quarter. the starting was in subcontract the operations of with of deconsolidation portfolio XX%, lower or business The facility the of year, were impact X% more page stable was APAC. fee associated and period. a Americas This services impact which the of offset region. both for Within this line that, China facility reflecting just services during Within revenue up includes an brokerage a Fee balance Americas by under self-perform service Americas permanent earlier this services represent Americas X% XX% was service the revenue. stream little and demand and This of to compared the we respectively. and start actions services of revenue of primarily down with revenue revenue. Americas the and in and the on our In

initiatives revenue These partially markets were XX%, down XX. our fee EMEA was of due which brokerage EMEA was our was impact XX% versus lower on offset cost-saving partially primarily growth growth and $XX up Leasing respectively. $X EBITDA quarter and to is and page down by impact prior Adjusted valuation, XX% quarter. line. other service This to offset million revenue. for XX%, PM/FM year-to-date. were the the and of year, in line by for on declined capital, in PM/FM Moving service the and XX% In the X% X% million down or declines

XX. page the Fee XX%. Now Vanke joint in of deconsolidation China accounted The the revenue venture with this with associated of Services for Asia-Pacific on for down about half segment was revenue decline. PM/FM our

markets Our impact roughly up brokerage two-thirds Adjusted XX% represents revenue in which cost-savings the due revenue. execution. of the quarter Hong and of million segment. were unrelated fee X% activity was for slowdown capital Capital of largely as was the $XX respectively. to offset the and lower to Kong initiatives down is PM/FM represents excellent This COVID. than EBITDA line primarily a markets service more for by down Leasing in XX%

disruptive we page more at revenue to without into and looking I'd quarter the COVID goes trends now Turning remarks to It onwards some make how XX, line to detailed lines. business be trends, unprecedented cost in are our about of an fourth scale. saying pandemic revenue the to like limited global activity continues in we and especially that economic XXXX. brokerage highly uncertain outlook The on have remains to to service continue and sight near-term

quarter second which the for second to third second the the as down to expected declines we We half expect in half be we XX%. the year brokerage that with XX% the revenue range XX%. call, the overall quarter saw in this down On be we said of has the of what quarter second similar now to outlook for brokerage think improved was we

know XXXX As somewhat and lumpy of example. good was is half timing our transaction a always second you

continue that continue revenue a difficult predict. in to While over be we believe to there be to recovery the will this of recovery and brokerage speed shape time,

year-over-year As to some show hoping brokerage of see growing first are line PM/FM we to although we our to given expect for expect continues as to XXXX, XXXX. heal, began COVID in into the in economy we improvement expect March. the or to continue We the budgets the stable develop service in be quarter decline a we our more pandemic and XXXX this still impact

our represent than businesses total half these, this revenue year. of more reminder a As

As on of decremental modeling XXXX. the EBITDA percentage prior as are we said to fee a for in revenue adjusted as I calls, a decline mid-XXs

modeling Given year-to-date reasonable our we assumption. third results, quarter this a and believe remains

reduction cost over permanent track million COVID a the compensation savings $XXX temporary announced on to response through and actions this expense. substantial deliver year earlier savings variable in are in during a combination We in to XXXX of

executed cost which projects across We enhance to have have continued segments the The impacting savings some about with as Overall, we reductions put $XXX and structure improve of and cost continue a our temporary to will in our actions will already plans of anticipated back-office unwind have and together develop into efficiency XXXX reductions of to detailed across cost implementing most beyond functions XXXX more brokerage we operating additional permanent our impact converting XXXX revenue early execute XXXX. XXXX. temporary actions permanent as And permanent the actions the and to of savings million place margin offset permanent XXXX the into financial which will include our to cost this aggregate model. well and which improve as permanent recovers. cost in long-term

brokerage and be XXXX broader the markets. There in will However, more discretely, of a uncertainty a by lot that in in the driven recovery expense non-fee a our modeling of the operating payout in earners. net normal there we to return economy for speed bonus increase expect remains

our assuming back XXXX whole brokerage currently in to develop growth a detailed but we As not some budgets, XXXX as levels. are we

we expect stable revenues. or In PM/FM addition growing

we With targeting and are in EBITDA these XXXX. revenue grow assumptions, to

provide in detail earnings will We on quarter more call fourth our February.

turn XXXX, can of and of you supporting COVID and be said, profitability strength of economic the will to to today's our long-term. Brett confident for focus our outcome Q&A I'll in whatever on XXXX, we pandemic that the portion the As that, and back our financial employees, the continue the impact, our call. With welfare the operator company, clients, the for call

Operator

with question. with question [Operator Instructions] a conducting we'll Please at your our And Anthony this first is from question-and-answer And Paolone be proceed JPMorgan. time, session.

Anthony Paolone

have Because number you. the about the cost much question XQ was and missed on $XX realized Thank million Did be think how I I it. to the side. in may say see million talking for for Duncan realized actually guess I you XQ? full $XXX the first I Okay. was you're from year.

realize XQ. in to trying just you left that think back you'll So, into what's

Duncan Palmer

Yes Tony.

about at thinking are said least million So, the second we we quarter. in that. $XX did We

we being think than more that $XX bit You should as did. million about a and

the I QX million QX do done of couple million think for about $XXX we'd the and a through and we dollars year. hundred sort of said we'll

be thinking like rough quarter. terms about you this a So, as in should million $XXX

Anthony Paolone

my then question In I past you talked see next downturns the Okay, could the and got Brett guess leasing get through. leasing when second just then and you side. seeing on on you And pipeline builds what up that's for really something whether through kind it. the come these you building about there year? had a Can backlog and to maybe we go comment you're of

Brett White

great a It's question. Tony. Sure Sure.

first that referenced, can any that downturn nature Because flight which and thing That can We you is this to first kick what lockdowns action this is that companies quarter. the in about companies a the in downturn, we significant as think level it's for at and take I all, far short-term. table is as and it. stops taken would and seeing are future talked early-stage So, the COVID of the logical they uncertainty kick any because renewing off corporations other -- in around unique renewing that's of seeing reasons, and down anything a indeed of pretty as we're for happens that. of be last

renew. to do is sort. to what a a have They're ability the many now fairly short-term what renewing you not them normal anymore a that's Again kick would -- rise on this And that -- which downturn typical. about quickly that rise to not and marketplace. the than down at exactly expect this renewing be going way have for again rents They're are would they're would renewing based would holding moment, on what leasing you in at see up. third seeing describe, we're the are the market. higher side So know shorter-term change. at the going numbers just bit We beginning I our leases is are That down. the Vacancy it's higher they're Companies is you renewing and not in beginning a for the will of playbook coming than rents is and percentage almost of road at to is them are to the going to a percentage of expect. can --

it and dynamics around what the think that I margin. lockdowns, again, think the different probably the those I future perhaps bit exacerbates is a at around bring a little bit here COVID uncertainty in what's uncertainty might

I put it's we'd forecast Yes, we're saw say would way things But better. harder going in published much our pretty So before times playing out we the as go expect. you to -- get see through returning as X.X a to of markets Thorpe we And around markets is Kevin away. years think out, that the point the recovery the do years. a we in full about year, couple inflection

Anthony Paolone

Great. Thank you.

Operator

with And Harter Credit Doug question. question your from our proceed Suisse. next is Please with

Doug Harter

Thanks.

liquidity just You playing be talked of And offense? you kind some to using of would more be how much infill how potential of hold want defensive? that talk about liquidity for to of for back Can much about liquidity kind your acquisitions. possibly you

Brett White

Yes.

think very $X the a we to at are look I way want cash on But draw and we very, liquid I moment, with liquidity at put of think No almost liquidity. and about minimum would to revolver. capacity. revolver this what billion is, on don't number as

some in disappointed it by you answer the way, probably marketplace precision total we think great some we feel to about infill road you like of I much months than way And I we're unexpected. able bring should the would would would five in and capacity question with far, due any or we environment. opportunities no have right and deals. you it also I'd more if a the the around put coming in that describe down to the not have the think liquidity that, more is billion months say But little need have four would to Duncan, think more I the far now the But need. we So we is Hopefully, $X in come way, like free. well-priced than to last the I way

Duncan Palmer

No.

much agree liquidity a very you, level kind But keep. Brett. not of I'm sort I saying think to sort with of I of defensive particular we specifically want

undrawn roughly end obviously, amount I with of amount peak-to-trough the of think, trough. and year, to of we of as very being is cash of we have. middle large that's which revolver and speaking we for capacity a have have small that. middle completely I obviously year the for generally the But Brett cycle, relatively the comparison the in a the the cash some the the said liquidity year mean, to

as what quite along do now. kind of of having more if pipeline kind So right adequate right lot you think we're developing capacity targeting a come than that's through of deals should of us and infill, to the the that we're

Doug Harter

Great. you. Thank

Operator

our Funk And Please America. your question. question Bank next Michael proceed with with of is from

Michael Funk

here. of the peers of activity hope could, Thank retail back and deals sense in a A side. multi-family. transaction I you office so I first if first What in for lot you're of have all your highlighted Obviously up question. picking well. the question, number guys. strength couple capital-chasing brokerage of is is the A your on industrial

Brett White

Yes.

complement what yes, me So first of look other a to bolt-bracket I'd call our two throw all, peers. let

in year transactions all very, the It's industry that are good in markets. institutional board, of spot in three speaking rental would -- I've everyone of have really resilient who way so seem two business seen this these investment And in and and which is from development no they what to -- delinquencies costs have is volumes we've what quarter California done these two this couldn't for transaction rent more think what continuing more highly low now. and interest business priced. be to has mimic a regional. call from the by a and great. firms at downturn this. an multifamily good the owner you've it as those a of. very Multi-family really, everybody. sweet are Their business as platform gets better. others certainly through And heard we secondary And delinquencies to I real They a speak ourselves showing seen job players forth, like right seen and that's works industrial boutique three multifamily and I and occurring very quite saw Transactions managing to such be the firms, here as would peers across

multifamily So a retail really I as referenced you in Retail. of an as investment. think would sweet opportunistic spot.

money come -- to much And Then at put We of great that they your you're extraordinary well to going means question get action are so generally of in I trades generally highly that that's be When hard older and that's still all now. fact see. entitled the buildings in at recently. kind moving capital. that. buildings around trade. And But office. look market And that are or it's at moved retail. the is it's moved they're to high-quality the core, nothing not interested looking what like I those while and interestingly, converted can of newer to right down. kind investors they've is high-quality in is cap of core, slow large that this moved high-credit retail a is nothing correct. it's in to the all haven't amount. a What that a suburban attractive barn would industrial at inference of a -- logistics would which cap property. CBDs. the haven't work for buildings because great those going to suburban multifamily is is a think They high-credit, great, land because Most and seeing great to logistics yields well-leased, moment, trends We've high-quality, or hard thought look couple in -- in at industrial And Industrial to order, of office major demand very industrial get seen looking burning. it bit, they office rates tower know is office wide CBD get longer-term to demand. Retail indicative rates We those a Suburban hurting. around priced particularly office

Michael Funk

cost could. And the on then if I side

a cost savings Can the areas mentioned highlight where that? converting You you temporary few cost savings. you're permanent converting to

Brett White

Duncan?

Duncan Palmer

Yes.

asked glad So you that.

obviously, whole into of big So stuff all that that a on this government year, to be everything and and we furloughs, of goes temporary travel things through very chunk side the entertainment, variety expect kind through of that cost been and focused we've all not a from sustainable. support

as convert we more the So is, furloughs out more reductions the of and basically -- of try I permanent permanent staff. to with that replace stuff for able some mean, more that we're example, some is to make permanent cost in will

operations. the the in we we savings again permanent we the I put efficiencies and think generally of opportunities some in of savings -- there how just put us T&E some up we more enable won't take other I sort some place back-office some will of we're in functions will generally, kind around getting -- of pick of features to the And temporarily and events, places and the and of think to be that events T&E. of some our don't make them out in probably run

around back lines of the that of won't sort service a it's back different quarter actions basis. converted on and that things So those permanent in took we variety world and things we've converted a just around the sort come that of second

Brett White

earlier your question. was speaking. to was here, back looking get to at while I just Duncan data And some

last of XX focus of in the office. if office rates suburbs it's high generally suburban, about the up think were tighter bps haven't to moved what to both moved at X.X% that's mentioned but in office definitely now. all Just a underscore Interestingly, from capital indicative from And quarter cap pre-crisis interest I CBD quality CBD I XXXX high-quality again, X.X% suburban levels. and have for rates Cap available. on on

Michael Funk

for you the Thank Okay. questions.

Operator

Josh with question. from And Blair. next William Lamers your with proceed question our is Please

Josh Lamers

of owners you. It that I side, can different could I'm I given practice period any Thank in paradigm of delaying on the continue occupiers how circle long decision. start to leasing don't a just or to I'm way ask bit reason or shift leasing in here here. you this facing if way. permanent landlords And occupiers a that here can until the lead And going lease But right. believe be back through a we're of or guess require space? is question short-term just that curious to to more All the to continuation decisions on a of comment seems hot longer-term to know going longer-term shift topic. that renewals a length there to kind a

Brett White

question. great a It's Yes.

how -- first long can very hard or how short-term will renewals? owners long Look So say. to accept

it think I of the at be because entirely market's and based the on view future moment, uncertain. that's the will

owners building and I look than that in for a many keep prefer tenant think play one. to tenant their lose the to would new in

as are to -- is take start a feels the that optimistic a the think happen road, to term if more market The that dynamic the willing equation, down gets to because going turn go here are to rents And of they'll they will they I to be future, going going soon which see frankly is do. an that don't the it's As longer a complicated tenant down. this be will to owners far shift. to that and want market to risk go bit what

to to of economics. start term likely tenants and going rents take As are go more potentially more the more space because to down be to want

days Early sure like. this next the one's plays so kind the months look to are out. of six, XX bumpy. way No quite really And what think all it's

tenants in going might might it a what that always for us the see come that next XX, And for will of we as a flip. soon more inflection to to come likely advise begin and it then today a We is rate down now. is be we the try markets you X.X we camp second will to better in that's what tight do people that a will of large in get you from rent's way bit. world, return, mentioned And they I think they of we to than to certainly XX around landlord six, like be term today they months that's lock would to take As the look when half be, what that the the because looking in think bad the believe the term. or become six for a out. then to it going and sit And And be around months lock advantage point do can if play years as does confident place think corporations year XXXX. conclusion your market this and certainly not

to employment and other that. -- in out numbers I the activities to likely I numbers to the see and time market well going you're turn But and turn. It want hope then I do and be therefore the future more you're vacancy next to coming that seeing think a you'll certain the time that more certainly time agree just settle -- much to start However, will start by about the words they before what to see improve much do for real space, rent in in think takes tenants the feel this going longer-term. with about year, better to the

Josh Lamers

me once then you RFP growth business of on work accelerate comment in-person that it the restrictions? Are PM/FM business. end in near-term more the just delays or One for That'd you if relative Thank helpful. pipeline implementation the guys that to to looks we experiencing could second for be clear that quarter. really And business also That's you. the me. could how on in some maybe just any

Brett White

Sure.

since -- along both forth. I in a so been bids we slowdown projects say, we in would chugging pretty it picked -- definitely buildings, a our would the clients facility as they of same marketplace quickly. people so as up dealing property management are has seen to how management all and But because but and in on as in all large RFPs So and issues the robust. the is our pertains with was we the definitely get things year. the Certainly, how fairly essentially March, well we've And which the we're number all clients work describe safely competitors, bidding pipeline as And and like there throughout business of PM/FM March. are lots the nicely

particularly sale because buildings property is in a in the like number down, and of dynamic early that I does think goes of times move down. find you days management in bit a of what do out buildings downturn, these the -- steep the that goes the in

It's So to less business multi-family. usual who is than if buildings retail also office U.S. the are runs our portfolio selling. for Maloney the for you and tell Property were you true reason property in is and Marla industrial that the and management to churn talk would business, she Management and that less the in

see picks trading and equally. you'll for That's good everybody that As up more bad again, transitions.

the there get ones being bid we hopefully the property the move or to take the there. buyer property will management We that that's sold

top which lines coming are – exactly those at folks for PM large that to big puts solid top-tier the way would some year which indicative wouldn't that in gains the for working running for for a way firms numbers the pipeline last market. lines, is those industry that the share dynamics market the I been and is moment, and that look to those the – the the the are and the -- those into pandemic because We business the way else, really quarters, here have the I on wouldn't at RFPs use pent-up will this you've demand would that numbers numbers are FM, work RFPs plan bid to in the lose somebody companies looks business buyers be in in the your particular wave but that their to this, more the in But solid – own they are don't go growth now, in are hard or were again, pick see to aren't be the in for three out two outsource. their they -- what institute again, Operator, and come of I are RFPs seen, question, all through some By market firms our answer generally, and I they we this up to now. final are six owners coming going if market wrong and just we months get occur things reason, because of a see the going feel likely RFPs the expect to worse you'll a don't any things, large protracted, for at from which to see think pace on of would have a to expect downturn. these XXXX downturn we now, market the case didn't more big if pent-up comment again, wave anything, than all, I questions to materially more I we clients, stressed, P&Ls then my say, materially, or corporate because that'll bit if done? and are all point outsource to

Operator

one have next proceed Patrick question. more Instructions] Raymond question. Our from actually with is with James. we question And, Please O'Shaughnessy your [Operator

Patrick O'Shaughnessy

about markets? Hey. Good [Technical the evening. time How Difficulty] are you relative thinking

Brett White

I'm please? afraid, repeat your cut question you out. that, Would

Patrick O'Shaughnessy

How that? other? are about are a you this each time leasing markets? Does Is a they and have capital thinking toward you before full are How about it capital markets? thinking line between a – recovery of relative thing independent rebound

Brett White

think for slow capital as out and the referenced. mark daily, moment, I cost slow were they and where think how capital to capital down, which basically It's markets you is quarter both let's an recovery about need in at we our would there XXXX. than move. the recovery. us here, bit recovery, place as down. vacancy think pre-COVID think much we've markets to again, capital half move on measured into near return and it, carrier. capital back that be to our a a come later I materials, in after that So pick XXXX. We've way way, one leasing bit and U.S. of in systems resized know six at that recovery. And pricing rent can so markets ago, we up. – which need I much, would, a structures great they a would us fourth a the define that play we've at financial certainly, quickly of in that, a come It's why a months numbers, hanging it the should and ahead move was that, than moment, recovery think, levels. a performance to pre-COVID you're call that think down our And our don't I think true right? recovery But don't I markets XX%. research Full for of the happens I in because aware will performance, get Duncan about has should And leasing tends aircraft levels, takes Capital That's cost dynamics business to We – seen for the are, mid-XXXX, spoken is was, well, the here full rents of in of, so were in here, better. us assets. we is that, it's for markets, think, volumes our markets to so question. differently, to again and way more down taken By to peers – of bigger leasing, we you've the I'll half be the much Capital so I move

than in situation invested, to estate watching the already right as – commercial them as big valuations want we're different obvious real by I'd that they where invested some lot markets now. all they capital thing We're being we capital about other badly of enormous want capital GFC. or it's an capital of do is, mention a it. they're get in decide There's of during to The A reasons. capital chased being they've be soon wait amount that But that know, institutions. some going to some transactions bit. a that large very to very going for the you to That got again, were invest is as

or the line. huge term capital opposite GFC. a it the That capital was will, moving to to whereas through think the So again, enabler than supporting liquidity leasing this we around during slower I is dynamic this and we cause recovery, a business, think, which, is time quicker will in markets markets show recovery recession dynamic

Patrick O'Shaughnessy

billion a up regarding you of the your follow like in covenants? as debt to your you're $X.X in associated up capacity from color. for quarter period. probably M&A, your your next discuss particularly then ticks quarter, sheet debt-to-EBITDA appreciate EBITDA I'd that liquidity just context strong the year Can really I the and comping it. in Got balance as leverage ago And

Brett White

Yes.

see Duncan Duncan, let remind just possible any that to a going only I'm does play. then comes it. come is hit covenant want the do our specifically? covenant that into So answer you we I'll into question play, covenant But and you revolver, don't scenario the where which ever to springing

Duncan Palmer

Yeah.

– revolver now, we draw million, $XXX as a have something right a unless more than at just in we don't at or end. practice the referenced, period so we Brett So covenant

not of a constraint, because net really sort cash, we So right? ratio in trough of the particular think on few million leverage in practicality, doesn't constraint over really I apply a is it's any because So have quarters next this it covenant. the $XXX period don't to M&A

of normalized sort now. have more right I at thought of again. not in because, particular have a that's not of leverage, the a this be were to going a back COVID of context And as sort of But net out said, about right obviously, we think it's covenant we constraint X.X because when think a we We we'll year. I now, think measure it's times downturn, which about covenant that So come don't something when we last sort about. end

Patrick O'Shaughnessy

right. Thank Great. All you.

Operator

reached call end our of I'll And for now the the session. turn have remarks. over question-and-answer we White And Brett to closing

Brett White

I time to again and look again, the in to evening talking appreciate everyone's you Well, call on Perfect. three this months. forward

Operator

disconnect today's concludes, participation. your this and your for this may Thank you at And time. you lines conference

Cushman & Wakefield (CWK) 8 Nov 202020 Q3 Earnings call transcript