Release Date: February 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you talk about your guidance around a more muted recovery in capital markets versus what you're seeing now? Has recent rate volatility paused things, or are you being prudent with your outlook? A: Emma Giamartino, CFO: We look at leasing and capital markets combined for our outlook. Transaction activity picked up in Q4 but remains below peak levels. We're cautious due to rate trajectory uncertainties, but we expect continued growth in 2025, especially in refinancing, which will drive loan origination revenue.
Q: Regarding the advisory segment, how much of the growth in SOP is from revenue versus margin expansion? A: Emma Giamartino, CFO: We're expecting low double-digit revenue growth with additional margin expansion on top of that.
Q: With the integration of Turner & Townsend, what is the long-term organic growth potential for the project management business? A: Bob Sulentic, CEO: We expect the combined business to grow in the mid-teens. Turner & Townsend's portfolio is in fast-growing areas like data centers and infrastructure, which will drive growth.
Q: How do you view the development opportunities, especially in industrial, given flat leasing revenue? A: Bob Sulentic, CEO: We are strategically acquiring sites for future development, expecting them to harvest when rental rates recover. We have $900 million of embedded profit in our current portfolio, indicating strong future opportunities.
Q: Can you elaborate on the investment management division's potential and why SOP growth is expected to be flat in 2025? A: Bob Sulentic, CEO: The investment management business is underappreciated. We have strong-performing funds and leadership changes that will allow us to expand our offerings. SOP growth appears flat due to a large incentive fee in 2024, but we expect high teens growth without it.
Q: How does share repurchase activity fit into your strategy for 2025, especially against acquisition opportunities? A: Emma Giamartino, CFO: We believe our shares are undervalued and have prioritized M&A. If M&A opportunities don't materialize, we'll consider more buybacks.
Q: What are the competitive dynamics in the building operations and experience segment, and what is CBRE's strategy? A: Bob Sulentic, CEO: The opportunity lies in the fragmented management of a vast base of commercial real estate. By combining businesses, we aim to leverage synergies and scale capabilities, adding experience to the mix for faster growth.
Q: How are you managing headcount in advisory services, and what is the competition for talent like? A: Bob Sulentic, CEO: We have capacity to grow revenues without adding headcount, but we will recruit selectively. The competition for talent is consistent with past levels, and our brand and stability help us attract talent.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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