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DALLAS--(BUSINESS WIRE)--CBRE Group, Inc. (NYSE:CBRE) climbed to No. 3 on the Barron’s list of the 100 most sustainable U.S.-based companies for 2024 – up from No. 4 last year. This is the seventh consecutive year that CBRE has made the top 100 list. The 1,000 largest U.S.-based publicly traded companies are evaluated under the Barron’s program. They are scored on more than 230 environmental, social, and governance performance metrics across five categories: shareholders, employees, customers, community an ...

DALLAS--(BUSINESS WIRE)--CBRE Group, Inc. (NYSE:CBRE) and Arlington Capital Partners today announced CBRE’s completion of its acquisition of J&J Worldwide Services, a leading provider of engineering services, base support operations and facilities maintenance for the U.S. federal government from Arlington, a Washington, D.C.-area private investment firm specializing in government regulated industries. J&J primarily serves the U.S. Department of Defense through long-term, fixed-price contracts. The company ...

DALLAS--(BUSINESS WIRE)--CBRE Group, Inc. (NYSE:CBRE) today announced that Guy A. Metcalfe has been appointed to the company’s Board of Directors, effective February 26, 2024. Mr. Metcalfe was a Managing Director and member of Morgan Stanley’s investment banking executive committee and led its real estate investment banking business for over two decades before retiring as Global Chairman on January 31, 2024. In more than 30 years at Morgan Stanley, Mr. Metcalfe advised clients on over $850 billion of tran ...

DALLAS--(BUSINESS WIRE)--CBRE Group, Inc. (NYSE: CBRE) has been named the top global brand in commercial real estate by The Lipsey Company for the 23rd consecutive year. CBRE’s development services subsidiary, Trammell Crow Company, was the top-ranked pure development company for the sixth consecutive year. A training and professional development firm specializing in commercial real estate, Lipsey has surveyed commercial real estate professionals on their perceptions of the industry’s leading brands since ...

Key PointsBears decided to ditch their views on this one ETF, which directly calls for a new set of lungs in this market bull run.Even Buffett jumped on the trend that will help real estate stocks, starting at the top of today's value chain.Working down the list of beneficiaries, these three stocks are likely to see a profit boost in the next quarter.5 stocks we like better than JPMorgan Chase & Co.Whenever traders move their money in a big way, it often pays to follow their tracks and reverse engineer what ...

DALLAS--(BUSINESS WIRE)--CBRE Group, Inc. (NYSE:CBRE) (the “Company”) today announced the pricing of the offering of $500 million in aggregate principal amount of 5.500% Senior Notes due 2029 (the “Notes”). The Notes will have an interest rate of 5.500% per annum and are being issued at a price equal to 99.837% of their face value. The Company’s wholly owned subsidiary, CBRE Services, Inc., will issue the Notes, which are guaranteed on a full and unconditional basis by the Company. The Notes are expected to ...

Financial Performance - Core EBITDA for 2023 was $2,209 million, compared to $2,924 million in 2022[53] - Core net income attributable to CBRE Group, Inc. for 2023 was $1,199 million, down from $1,863 million in 2022[60] - Core diluted income per share for 2023 was $3.84, compared to $5.69 in 2022[60] - Revenue for 2023 was $31,949 million, a 3.6% increase from $30,828 million in 2022[200] - Net income attributable to CBRE Group, Inc. for 2023 was $986 million, a 29.9% decrease from $1,407 million in 2022[200] - Basic income per share for 2023 was $3.20, a 26.6% decrease from $4.36 in 2022[200] - Diluted income per share for 2023 was $3.15, a 26.6% decrease from $4.29 in 2022[200] - Comprehensive income attributable to CBRE Group, Inc. for 2023 was $1,045 million, a 2.0% decrease from $1,066 million in 2022[203] - Cost of revenue for 2023 was $25,675 million, a 5.9% increase from $24,239 million in 2022[200] - Operating income for 2023 was $1,117 million, a 26.1% decrease from $1,512 million in 2022[200] - Provision for income taxes for 2023 was $250 million, a 6.8% increase from $234 million in 2022[200] - Equity income from unconsolidated subsidiaries for 2023 was $248 million, an 8.3% increase from $229 million in 2022[200] - Interest expense, net of interest income for 2023 was $149 million, a 115.9% increase from $69 million in 2022[200] - Net income for 2023 was $1,027 million, a decrease from $1,424 million in 2022 and $1,842 million in 2021[206] - Net cash provided by operating activities in 2023 was $480 million, significantly lower than $1,629 million in 2022 and $2,364 million in 2021[206] - Net income for 2021 was $1,407 million, a decrease from $1,837 million in 2020[212] - The company's net income for the year ended December 31, 2023, was $986 million[244] Revenue and Business Lines - Total net revenue from resilient business lines in 2023 was $12,342 million, up from $11,261 million in 2022[62] - Total revenue from resilient business lines in 2023 was $26,015 million, compared to $23,312 million in 2022[62] - Total revenue for 2023 was $31.949 billion, with the U.S. dollar contributing $17.470 billion (54.7%)[69] - Proceeds from sale of mortgage loans in 2023 were $9,714 million, down from $14,527 million in 2022 and $17,195 million in 2021[206] - Origination of mortgage loans in 2023 was $9,905 million, compared to $13,652 million in 2022 and $17,016 million in 2021[206] Foreign Currency and Exchange Rate Risks - Approximately 45.3% of the company's revenue in 2023 was transacted in foreign currencies[68] - The company entered into a cross currency swap in July 2023 to hedge foreign currency exposure related to a new euro-denominated term loan[66] - The company's Real Estate Investments business has significant euro and British pound denominated assets under management, exposing it to foreign exchange rate fluctuations[65] - A hypothetical 10% adverse change in the U.S. dollar relative to the British pound sterling would decrease pre-tax income by $5.4 million, while a similar change relative to the euro would increase pre-tax income by $6.3 million[70] - Approximately 45% of the company's revenue was transacted in foreign currencies in 2023, exposing it to currency exchange rate risks[77] - Fluctuations in foreign currency exchange rates may materially impact the company's revenue, earnings, and assets under management, particularly in its international operations[102] - Foreign currency translation loss in 2021 was $409 million, compared to $159 million in 2020[212] Debt and Financial Obligations - Turner & Townsend had $10.2 million (£8.0 million) outstanding under its £120.0 million revolving credit facility as of December 31, 2023[57] - No amounts were outstanding under the company's Revolving Credit Agreement as of December 31, 2023[56] - The estimated fair value of senior term loans was $746.5 million, and the fair values of 5.950%, 4.875%, and 2.500% senior notes were $1.0 billion, $600.2 million, and $424.0 million, respectively, as of December 31, 2023[72] - As of December 31, 2023, the company's total debt, excluding certain non-recourse and warehouse lines of credit, was $2.8 billion, with an interest expense of $243.2 million for the year[148] - Long-term debt, net of current maturities, rose from $1.086 billion in 2022 to $2.804 billion in 2023, a significant increase of 158.2%[167] - The company's debt instruments impose operating and financial restrictions, including maintaining a minimum interest coverage ratio and a maximum leverage ratio[149] - A breach of debt covenants or failure to meet required financial ratios could result in a default, potentially triggering immediate repayment of all outstanding borrowings[150] - The company's variable rate indebtedness exposes it to interest rate risk, which could increase debt service obligations and limit refinancing capabilities[172][173] - A 100 basis point increase in interest rates on the company's variable rate debt would decrease pre-tax income and cash flow from operating activities by $7.6 million for the year ended December 31, 2023[104] - Interest paid during 2023 was $191 million, up from $89 million in 2022 and $41 million in 2021[209] Investments and Real Estate - The company had a net investment of approximately $337.0 million in real estate co-investments as of December 31, 2023, with $180.4 million committed for future co-investments, of which $128.0 million is expected to be funded during 2024[96] - The company's Real Estate Investments segment manages 36 consolidated real estate projects with $526.7 million in invested equity and 132 unconsolidated projects with a net investment of $358.8 million as of December 31, 2023[124] - The company's Real Estate Investments segment is exposed to earnings and cash flow fluctuations due to the timing and performance of significant investment dispositions[98] - As of December 31, 2023, the company had over $1.5 billion invested in certain companies and projects, accounted for under the cost/measurement alternative method of accounting[235] Operational Risks and Challenges - The company faces risks from rising interest rates and reduced credit availability, which impacted its capital markets, mortgage origination, and property sales businesses in 2023[75] - The company has committed additional resources to expand global sales and marketing activities, with a focus on emerging markets, but faces challenges in managing operational and political risks in these regions[79] - The company competes with a variety of firms in the commercial real estate services and investment industry, including outsourcing companies, developers, and institutional lenders[82] - Acquisitions have been a significant component of the company's growth, but future growth through acquisitions depends on the availability of suitable candidates and sufficient liquidity[86] - The company faces challenges in integrating operations and IT systems from acquired companies, which could divert management attention and result in increased costs[88] - The company's brand and reputation are key assets, and negative perceptions or publicity could materially affect its revenues and profitability[91] - The company's investment management business faces volatility in revenue, net income, and cash flows due to market movements affecting management, transaction, and incentive fees[94] - The company's development services business provides completion and budget guarantees, exposing it to potential liabilities if projects exceed specified timeframes or budgets[97] - The company's Global Workplace Solutions segment requires accurate working capital modeling and creditworthiness assessments to mitigate risks of cash flow disruptions[127] - The company's loan origination and servicing business heavily relies on relationships with U.S. Government Sponsored Enterprises (GSEs), including Fannie Mae and Freddie Mac[131] - The company relies on third parties and subcontractors for various business activities, with potential risks related to compliance, data privacy, and operational failures[132] - The company's success depends on retaining senior management and key employees, with intense competition for talent potentially increasing recruitment and retention costs[134] - The company's joint ventures and affiliate programs involve risks, including potential actions by other participants that could harm the company's brand and business[146] - The company's policies and programs to safeguard employee health and safety may not be adequate, potentially leading to severe consequences, including legal liability and reputational damage[139] - The company's global operations present significant management challenges, including maintaining effective standards and culture across a large enterprise[137] Cash Flow and Liquidity - Cash and cash equivalents decreased from $1.318 billion in 2022 to $1.265 billion in 2023, a decline of 4%[167] - Receivables increased from $5.327 billion in 2022 to $6.370 billion in 2023, a growth of 19.6%[167] - Total assets grew from $20.513 billion in 2022 to $22.548 billion in 2023, an increase of 9.9%[167] - Accumulated earnings increased from $8.833 billion in 2022 to $9.188 billion in 2023, a growth of 4%[167] - Net cash used in investing activities in 2023 was $681 million, an improvement from $832 million in 2022 and $1,281 million in 2021[206] - Proceeds from revolving credit facility in 2023 were $4,006 million, up from $1,833 million in 2022 and $27 million in 2021[209] - Repurchase of common stock in 2023 was $665 million, significantly lower than $1,850 million in 2022 and $369 million in 2021[209] - Cash and cash equivalents and restricted cash at the end of 2023 were $1,371 million, down from $1,405 million in 2022 and $2,540 million in 2021[209] - Income tax payments, net in 2023 were $467 million, compared to $604 million in 2022 and $330 million in 2021[209] - Total equity at December 31, 2021, was $9,359 million, up from $7,120 million in 2020[212] - Repurchase of common stock in 2021 amounted to $1,862 million, significantly higher than $373 million in 2020[212] - Accumulated earnings increased to $8,367 million in 2021 from $6,530 million in 2020[212] - Noncontrolling interests rose to $831 million in 2021 from $42 million in 2020[212] - Acquisition of non-controlling interests in 2021 amounted to $809 million[212] Cybersecurity and IT - The company's cybersecurity program is governed by multiple frameworks including ISO 27001 and NIST CSF, with policies applicable to all global employees[237] - The company conducts annual cybersecurity training for all employees and enhanced role-specific training for certain employees, along with regular phishing detection exercises[237] - The company maintains and updates incident response plans, including annual third-party cybersecurity incident response exercises to test pre-planned actions[237] - The company's security program is audited annually by independent groups including accredited certification bodies and leading accounting firms[237] - The company engages external cybersecurity experts for periodic audits, threat assessments, and security enhancements[237] - The company relies heavily on information technology, and any failure or disruption could impair service delivery and harm operating results[175][177] - Cybersecurity threats pose a growing risk, with potential for liability, reputational harm, and significant remediation costs[182][183] - The company is subject to complex and evolving privacy, data protection, and cybersecurity laws, which could result in increased operational costs and compliance risks[184][185] Employee and Workforce - The company has approximately 130,000 employees, including Turner & Townsend employees, working in over 100 countries[139] - The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in over 100 countries as of December 31, 2023[246] - Compensation expense for equity awards in 2021 was $160 million, up from $185 million in 2020[212] - Restricted stock awards vesting in 2021 totaled 1,028,807 shares, down from 1,268,983 shares in 2020[212] Tax and Legal Liabilities - The company has $413.5 million in gross unrecognized tax benefits as of December 31, 2023, subject to complex tax law interpretations and potential resolution uncertainties[120] - The company recorded a $192.1 million estimated liability related to fire safety remediation for Telford Homes, with $155.7 million attributed to potential additional costs for remediation[117] - Pension liability adjustments, net of tax, resulted in a loss of $15 million in 2021, compared to a gain of $35 million in 2020[212] Financial Statements and Accounting - The company's consolidated financial statements include accounts of consolidated subsidiaries, including variable interest entities and voting interest entities[247] - The company determines whether an entity is a Variable Interest Entity (VIE) based on qualitative and quantitative analyses of equity investment at risk[248]

CBRE Group Inc.’s (CBRE) fourth-quarter 2023 core earnings per share (EPS) of $1.38 surpassed the Zacks Consensus Estimate of $1.21. Quarterly revenues of $8.95 billion also compared favorably with the Zacks Consensus Estimate of $8.62 billion. Reflecting positive sentiments, shares of CBRE were up more than 8% so far today.Results reflect growth in its resilient lines of business, led by Global Workplace Solutions (“GWS”). Despite growth in GWS and other resilient businesses, commercial real estate capital ...

Financial Data and Key Metrics - The company ended 2023 with strong operating profit growth across all three business segments, delivering the third-highest full-year earnings in its history despite a challenging year for commercial real estate [40] - Investment Management AUM ended 2023 at $148 billion, up $3 billion for the quarter, driven by favorable currency movement and modest net capital inflows [73] - The company expects free cash flow to total at least $1 billion in 2024, with a $500 million benefit from the reversal of large cash expenses in 2023 [44] - Core EPS for 2024 is expected to be between $4.25 and $4.65, implying mid-teens percentage growth at the midpoint [88] Business Line Performance - GWS segment saw double-digit growth in net revenue and SOP, with Facilities Management net revenue increasing 14% for the quarter and 13% for the year [43] - Project Management net revenue grew 11% for the quarter and 14% for the year, led by Turner & Townsend's global program management work [43] - REI segment SOP increased to $68 million in Q4, up from $17 million in the prior year, driven by the earlier-than-anticipated monetization of several US assets [90] - Capital markets revenue is expected to grow by mid-single digits, with improved investor sentiment and easing of the denominator effect [14] Market Performance - Leasing revenue saw a slight uptick in Q4, driven by EMEA and APAC, with higher office leasing offsetting slightly less industrial activity [56] - Industrial and retail property sales declined less than multifamily and office, supported by healthy fundamentals [56] - Office leasing demand is expected to improve, particularly for Class A properties, which account for approximately two-thirds of leasing revenue [105] - Industrial leasing demand remains strong, especially for properties under 500,000 square feet [105] Strategic Direction and Industry Competition - The company is focused on scaling its infrastructure investment management business and expanding its development activities through Trammell Crow Company and Turner & Townsend [10] - The acquisition of J&J Worldwide Services enhances the company's technical services capabilities for US federal government clients and opens a new market channel [81] - The company is committed to M&A as a key growth strategy, with a focus on deals that align with secular tailwinds and areas where the company has a "right to win" [65][102] - The company is bullish on the multifamily market, expecting a correction in vacancy rates and increased demand for rentals due to high mortgage costs [54] Management Commentary on Operating Environment and Future Outlook - Management expects 2024 to be the beginning of a gradual market recovery, with resilient businesses expected to grow SOP by double digits [72] - The company anticipates increased transaction volumes in the second half of 2024 as short-term interest rates are expected to fall [88] - Management is cautiously optimistic about 2024, with core EPS growth contingent on stable long-term interest rates, anticipated Fed rate cuts, and the US avoiding a recession [122] - The company sees a path to returning to its prior core EPS peak in 2025, supported by double-digit growth in resilient businesses and a gradual recovery in transactional businesses [94] Other Important Information - The company has identified $150 million in run-rate cost savings, with half of the benefit expected to be realized in 2024, primarily in the advisory segment [131] - The company expects to end 2024 with net leverage around one turn, supported by improved free cash flow [44] - The J&J acquisition is expected to contribute $65 million in EBITDA for the year, with three-quarters of the benefit realized in 2024 [37] Q&A Session Summary Question: How is the company thinking about its long-term outlook into 2025? [6] - The company has strong visibility into returning to its peak EPS level in 2025, supported by continued double-digit growth in resilient businesses and a gradual recovery in transactional businesses [77] Question: What is the company's appetite for large acquisitions following the J&J deal? [51] - The company remains committed to M&A as a key growth strategy, focusing on deals that align with secular tailwinds and areas where the company has a "right to win" [65][102] Question: How are development costs trending, and what are the return hurdles for new projects? [76] - The company is securing development opportunities with attractive spreads between current cap rates and yields, positioning it well for future profitability [113] Question: What is the outlook for capital markets activity in 2024? [112] - The company expects capital markets revenue to grow at a mid-single-digit rate globally, with potential upside if the recovery accelerates or interest rates decline further [126] Question: How is the company managing cost growth, particularly in the corporate segment? [36] - Cost savings initiatives are largely offsetting the reset of bonuses and discretionary compensation, with corporate costs expected to uptick slightly due to improved financial performance [36]