CBRE 1Q17 Earnings Call Notes

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Robert Sulentic – President and Chief Executive Officer

James Groch

Market moved away from reasonable EBITDA multiple for acquisitions

“Since late 2015, we have repeatedly noted that M&A and recruiting had become pricey and less disciplined just as the industry was beginning to experience lower market transaction volumes. The market had moved away from our long stated five to six times EBITDA multiple for infill M&A.”

Starting to see hopeful signs of greater discipline

“I should note that we are now beginning to see early hopeful signs of greater discipline around M&A in the market. With regard to recruiting and retention, our disciplined approach is working. Top professionals are continuing to elect to join CBRE and remain with us because our operating platform scale brand and ability to deliver integrated solutions enabled them to do more for their clients.”

Slow but longer cycle

“capital rising has been very, very strong for us and I would say continues to be on a fairly consistent basis. We are seeing maybe as that investor just being careful and thinking about where they’re investing in aware of the fact that were we’ve been in a slow but longer economic recovery than prior cycles that this cycle feels a bit different, but the flows of capital into our investment management business you know have continued quite strong. I think we’ve mentioned we’ve raised $8.4 billion of equity in the last you know trailing 12 months which is pretty consistent with what we’ve been doing on average for the last few years.”

UK is making a nice comeback

“Well, industrial is strong Brandon, and in general the UK is making a nice comeback. I mean we are seeing good activity there. I think we had a recent survey of clients that showed that London once again was the favored destination for international capital among all major markets around the world. So I would say positive trends and nothing about what’s going on with the Brexit situation are giving us major concerns now, and if I were to spike out a property type, it would be industrial for particularly good news.”