CBRE Group, Inc. (NYSE:CBRE) Q3 2023 Earnings Conference Call October 27, 2023 8:30 AM ET

Company Participants

Brad Burke – Head, Investor Relations and Treasurer

Bob Sulentic - President and Chief Executive Officer

Emma Giamartino - Chief Financial Officer

Conference Call Participants

Anthony Paolone - JPMorgan

Steve Sakwa - Evercore ISI

Jade Rahmani - KBW

Stephen Sheldon - William Blair

Patrick O’Shaughnessy - Raymond James

Alex Kramm - UBS

Michael Griffin - Citi

Jade Rahmani - KBW

Operator

Greetings and welcome to the CBRE Group Inc. Q3 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Brad Burke, Head of Investor Relations and Treasurer. Thank you, Mr. Burke. You may begin.

Brad Burke

Good morning, everyone and welcome to CBRE’s third 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 will 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. Commercial real estate capital markets remained under significant pressure in the third quarter. As a result, we experienced a sustained slowdown in property sales and debt financing activity, which drove the decline in core EPS. This decline was exacerbated by delays in harvesting development assets, which we will sell when market conditions improve.

Over the last several quarters, we have detailed the increased importance of our resilient and secularly favored businesses. These businesses saw continued solid growth in the third quarter, led by Global Workplace Solutions. Interest rates have increased more than 100 basis points since we reported second quarter results 90 days ago, continuing the sharpest rise in rates in nearly 40 years. The unexpected jump in rates has pushed back the capital markets recovery.