CBRE GROUP, INC. Q3 FY2024 earnings call

• Resilient businesses now contribute ~60% of SOP, less volatile than transactional. - CBRE had strong Q3 financial results with core earnings per share up 67%. All segments had double-digit revenue and segment operating profit growth. - GWS showed cost efficiency efforts and integration of CBRE project management with Turner & Townsend is proceeding. - Strong pipeline of M&A and co-investment opportunities. Japan and India businesses are growing as significant contributors to advisory SOP.

Advisory: Net revenue exceeded expectations, supported by leasing strength and recovery in property sales revenue. Global office leasing revenue reached a new high for Q3, up 26%. Property sales revenue grew 14% across regions. Advisory SOP rose almost 50%. GWS: Net revenue increased 19%. Facilities Management net revenue up 22% with broad-based strength. Project Management net revenue rose 12% led by Turner & Townsend. Net SOP margin improved by over 70 basis points. REI: Segment operating profit better than expected. AUM increased to over $148 billion. In-process and pipeline portfolio exceeded $32 billion.

• Raised full-year core EPS to a range of $4.95 to $5.05 from $4.70 to $4.90. - Expect best Q4 core EPS ever, led by GWS. - 2025 midpoint of guidance implies close to prior peak earnings, driven by double-digit growth in resilient businesses and recovery in transactional businesses.

Forward-looking statements involve risks and uncertainties such as market events, interest rate changes, etc., that may cause actual results to differ from projections.

Q: Michael Griffin asks about the acceleration of capital markets recovery.

A: Bob Sulentic says it will be a steady recovery, not precipitous.

Q: Anthony Paolone asks about office leasing growth.

A: Bob Sulentic talks about steady strength in office leasing with sustained demand for prime space.

Q: Steve Sakwa asks about what would cause a sharp recovery in transaction business.

A: Bob Sulentic says stability in interest rates and buyer-seller psychology could contribute.

Q: Stephen Sheldon asks about margins in GWS.

A: Emma Giamartino discusses levers like resetting cost base, focusing on contracts, and M&A to improve margins.

Q: Ronald Kamdem asks about GWS pipeline.

A: Emma Giamartino talks about first-generation outsourcing contracts and expansions in existing client base.

Q: Jade Rahmani asks about Trammell Crow and data center monetization.

A: Bob Sulentic discusses Trammell Crow's role in data center opportunities and integration with other business units.

Q: Peter Abramowitz asks about industrial leasing.

A: Bob Sulentic says industrial leasing is trending up but not at office rates due to large users' existing space.

Q: Steve Sakwa asks about loan servicing.

A: Emma Giamartino explains underlying growth is 5% with some escrow income shift.

Q: Jade Rahmani asks about quarterly dividend.

A: Emma Giamartino says they evaluate it but prefer buybacks for flexibility.