CBRE Group (CBRE) Q2 2023 Earnings Call Transcript

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the CBRE Q2 2023 Earnings Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Brad Burke. Please go ahead, sir.

Brad Burke

Good morning, everyone, and welcome to CBRE’s second quarter 2023 earnings conference call. Earlier today, we posted a presentation deck on our website that you can use to follow along with our prepared remarks and an excel file that contains additional supplemental materials.

Before we kick off today’s call, I’ll remind you that today’s presentation contains forward-looking statements, including, without limitation, statements concerning our economic outlook, our business plans and our financial outlook. Forward-looking statements are predictions, projections or other statements about future events. These statements involve risks and uncertainties that may cause actual results and trends to differ materially from those projected.

For a full discussion of the risks and other factors that may impact these forward-looking statements, please refer to this morning’s earnings release and our SEC filings. We have provided reconciliations of the non-GAAP financial measures discussed on our call to the most directly comparable GAAP measures, together with explanations of these measures in our presentation deck appendix.

I am joined on today’s call by Bob Sulentic, our President and CEO; and Emma Giamartino, our Chief Financial Officer.

Now please turn to Slide 5 as I turn the call over to Bob.

Bob Sulentic

Thank you, Brad, and good morning, everyone. Like last quarter, CBRE’s results slightly exceeded our expectations, driven largely by better-than-expected growth in Global Workplace Solutions and aggregate growth in our resilient lines of business, which Emma will describe in detail, offset by weaker-than-expected property sales and advisory services.

It is notable when considering our performance that the prior year comparison was especially difficult. We had our best quarter ever for core earnings per share in last year’s second quarter driven by exceptionally robust development earnings. To put this in perspective, our development earnings in last year’s second quarter exceeded the level of development operating profit in any prior full year except 2021.

With this in mind, my remarks this morning will largely focus on how both CBRE and the macro environment performed relative to our expectations coming into the quarter, followed by some high-level comments on our outlook. The economy performed better than we had anticipated going into the quarter in terms of both GDP and employment growth. However, the opposite was true with respect to interest rates, were increases in the last 90 days, coupled with expectations that rates will end the year higher than anticipated last quarter pressured the elements of our business that are sensitive to commercial real estate capital flows, particularly our sales and financing businesses, we expect this pressure to continue for the remainder of the year.