Capital Markets Recovery Expectations
Q: How steep will capital markets recover in 2025?
A: Management expects a steady capital markets recovery in 2025 rather than a steep one. Buyers and sellers have largely come together for most asset classes except office. There is debt available now and increased interest in multifamily, with slight cap rate compression in multifamily and industrial. They anticipate steady improvement next year but not a precipitous one. ( , )

Growth in Resilient Business Lines
Q: Is double-digit growth in resilient lines organic or M&A-driven?
A: Management expects double-digit growth in resilient business lines over the near, medium, and long term, primarily driven by organic growth in the low double-digit range, supplemented by M&A. They see a growing total addressable market, especially in outsourcing, and have significant opportunities in markets like India and Japan. Resilient lines are expected to deliver $1.8 billion of SOP this year, growing at double-digit rates. ( )

Leasing Outlook
Q: How do you view office leasing growth prospects?
A: Management sees sustained strength in office leasing, with recent success driven by occupiers targeting prime space first, then moving to B and B+ buildings. They anticipate a continued slow return to the office but not to pre-COVID levels. They believe office space remains important to occupiers' future, and expect leasing success to continue into next year and beyond. ( )

Margin Expansion and Cost Actions
Q: Is margin expansion in GWS fully reflected, or more to come?
A: The majority of cost actions were implemented across Q2 and Q3, so the full run-rate impact is not yet seen. Margins in GWS are expected to improve over last year and continue improving into next year. Management anticipates steady improvement through resetting the cost base, focusing on higher-margin contracts, and M&A in technical services. ( , )

Share Buybacks and Capital Allocation
Q: How do you prioritize acquisitions versus share buybacks?
A: Management continues to balance M&A with share buybacks when it makes sense. Despite the higher share price and valuation, they remain interested in buybacks and believe the stock is trading at a significant discount to intrinsic value. They will consider more buybacks than in the past if the valuation remains attractive. ( )

Q: Thoughts on starting a regular quarterly dividend?
A: They currently prefer the flexibility of buybacks and don't think a dividend is necessary, but it's something they evaluate over time. ( )

Data Center Opportunities
Q: What are CBRE's opportunities in the data center ecosystem?
A: CBRE has significant exposure to data centers across its businesses. Trammell Crow Company is capitalizing on land opportunities suitable for data centers. Turner & Townsend is project managing over 110 hyperscale data centers. CBRE manages between 700 and 800 data centers on behalf of occupiers. They recently acquired Direct Line, enhancing their capabilities. They have a data center sales business and are exploring strategies to extract more value in this space. ( , )

Rehiring in Capital Markets
Q: Do you need to rehire in capital markets to support growth?
A: Management indicates they have considerable capacity in mortgage origination and investment sales teams. While they are adding talent, they don't need to rehire to grow significantly from current levels. They continue investing in their transactional businesses and expect to add talent to both leasing and capital markets, but it's not necessary for growth. ( )

GWS Pipeline and Contracts
Q: Can you discuss GWS pipeline, first-generation vs existing?
A: CBRE is seeing an increase in first-generation outsourcing contracts, which take longer to convert but show significant progress. There's also significant progress in expansions and new wins within the existing client base. Growth often comes from expansions due to vast opportunities within large occupiers where CBRE already has relationships. ( )

Potential Spin-off of Trammell Crow
Q: Would you contemplate spinning off Trammell Crow?
A: Management is not considering divesting Trammell Crow Company. It generates high returns, interfaces productively with other parts of CBRE, and creates opportunities like seeding investment funds and collaborating on large projects. Trammell Crow also generates significant cash for investment across CBRE. ( )

Loan Servicing Business
Q: Why was loan servicing growth flat this quarter?
A: The underlying growth in loan servicing is 5%, but reported growth appears lower due to moving some escrow income from loan servicing to the commercial mortgage origination line. ( )