Colliers International Group Inc.

Welcome to the College International First Quarter Investors Conference Call. Today's call is being recorded. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance, or achievements contemplated in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the Company's Annual Information Form as filed with the Canadian Securities Administrators and in the Company's Annual Report on Form 10-F as filed with the U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded today, May 3, 2022. And at this time, for opening remarks and introductions, I would like to turn the call over to the Global Chairman and Chief Executive Officer, Mr. Jay Hennick. Please go ahead, sir.

Thank you, Operator. Good morning, and thanks for joining us for the first quarter conference call. I'm Jay Hennick, Chairman and Chief Executive Officer of the company, and with me today is Christian Mayer, our Chief Financial Officer. As always, this conference call is being webcast live and is available in the Investor Relations section of our website. A presentation slide deck is also available to accompany this call. Today, Collier's delivered very strong first quarter results across all service lines, building on the momentum from last year. Revenue, EBITDA, and earnings per share were all up sharply, and we were pleased to see that assets under management in our investment management segment was also up considerably. Last week, we announced the promotion of Chris McLernan to Chief Executive Officer of our real estate services global business. Over the past 12 years as the leader of our EMEA business, Chris delivered some very exceptional results. In his new role, Chris will oversee our capital markets, leasing and outsourcing and advisory businesses globally, reporting to me. Having him on board will provide us with the bench strength we need to successfully pursue our ambitious 2025 growth plan. During the quarter, we were also busy on the acquisition front. We added our affiliate operations in Cincinnati and Cleveland. We completed the previously announced acquisition of our affiliate in Italy, and Collier's Engineering and Design expanded its operations in the US Southwest. And just after quarter end, we completed the acquisition of Anterion, which is currently being integrated into our global investors platform in Europe. Once we complete the new partnership with Basalt Infrastructure Partners, our IM business will represent almost 25% of our consolidated EBITDA. This marks an important milestone in our service line diversification, increases our recurring revenue streams, and represents another step in the transformation of Colliers into a very different kind of company. In the future, we expect our IM segment to represent an even greater proportion of our overall EBITDA. So far this year, we completed or announced acquisitions totaling more than $400 million, and our pipeline remains strong. If we're successful, 2022 should be a record year of capital allocation for Colliers. The bottom line of all of this is this. The leadership team of Colliers has a proven 27-year track record of creating significant value for shareholders. The Collier's business model is balanced, highly recurring, and diversified, and generates a lot of free cash flow that we reinvest in our growth. All of these characteristics, together with our unique enterprising culture, growth mindset, and significant inside ownership position us very well to continue delivering superior returns for our shareholders. And let me be clear on one other thing. At its core, Colliers is an extremely well-managed service business. Because of this, we're able to weather the various macro events that might impact others, like inflation, interest rates, pandemic, regional conflicts, and supply chains, to name a few. Our results over the past number of years have demonstrated this in spades. With that said, I'll now turn things over to Christian. Christian?

Thank you, Jay. As announced this morning, Colliers reported strong first quarter financial results. My comments follow the flow of the slides posted on the investor relations section of colliers.com to accompany this call. Please note that the non-GAAP measures referenced on this call are as defined in this morning's press release. All references to revenue growth are expressed in local currency. First quarter revenues were $1 billion, up 31% relative to the prior year period, with revenues up strongly across all service lines. Growth of the quarter was primarily internally generated. Compared to 2019 pre-pandemic levels, capital markets revenues were up 52% and leasing was up 27%, with office leasing recovering to within 5% of Q1 2019 levels. Q122 adjusted EBITDA was $121 million, up 33% from one year ago, with margins at 12.1%, up slightly from 11.9% in the prior year quarter, driven by the Americas region. First quarter, Americas revenues were $642 million, up 35% over the prior year. Leasing activity was up 41%, led by industrial. Capital market activity was up 35% and was led by industrial, land, and multifamily asset classes. Office leasing activity was within 2% of Q1 2019 pre-pandemic levels. Outsourcing and advisory revenues were up 31%, driven by engineering and design, including recent acquisitions, as well as valuation and loan servicing. Adjusted EBITDA was $81 million, up 43% from last year, with the margin up 60 basis points to 12.6% on favorable operating leverage from higher revenues in all service lines. First quarter EMEA revenues were $153 million, up 30% from one year ago, with robust growth across all service lines, led by outsourcing and advisory in capital markets. Adjusted EBITDA was $5 million, up 23% on higher revenues, although margin was impacted by revenue mix from increased project management activity, which runs at lower margins than other services. First quarter, Asia Pacific revenues were $119 million, down 3%, driven by COVID-19 lockdowns in several Asian markets, as well as a tough prior year comparison, which benefited from a number of high margin capital markets transactions. Adjusted EBITDA was $10 million, down from $15 million in the prior year quarter. Investment management revenues were $86 million, up 94% versus the prior year period. After eliminating the impact of pass-through carried interest, revenues were up 38%, driven by management fee growth. Asset under management were $52 billion at quarter end, up 26% from one year ago. Adjusted EBITDA for the quarter was $27 million, up 51% versus the comparative quarter on solid flow-through from incremental management fee revenue. Our financial leverage ratio, as defined as net debt to pro forma adjusted EBITDA, was 0.9 times as of March 31, 2022. Most of our debt is locked in at attractive fixed interest rates, averaging less than 3%. During the first quarter, we invested in acquisitions and we utilized our normal course issuer bid for the first time as a public company. We repurchased just under 1 million shares in March and April. Given our stock's current trading price, our low leverage, future growth prospects, and significant financial capacity, we believe it is prudent to make modest share repurchases at this time. With our strong balance sheet, disciplined capital deployment and solid operating cash flow, we continue to be very well capitalized for future growth. We are increasing our outlook for the full year 2022 to reflect our strong Q1 results as well as recent acquisitions. The outlook is subject to risks and uncertainties as outlined in the accompanying slides. Now expect low double-digit revenue growth consisting of high single-digit internal growth and the balance from previously completed and recently announced acquisitions. We expect our adjusted EBITDA margin to improve 40 to 80 basis points relative to 2021 from a combination of internal operating leverage and higher margin acquisition. Finally, our adjusted earnings per share are expected to grow at a high teens percentage rate for 2022. That concludes my prepared remarks. I would now like to open the call for questions. Operator, can you please open the line?

Thank you. Ladies and gentlemen, if you'd like to ask a question at this time, please press the start and the one key on your touch-tone cell phone. Please stand by while we compile the Q&A roster. Now, first question coming from the line of Stephen Sheldon with William Blair. Your line is open.

Hey, good morning, guys, and congrats on the strong results. First thing I wanted to ask about is just the APAC, the Asia-Pacific region. Can you talk about the trends you saw there throughout the quarter? Did the weakness related to COVID lockdowns get more pronounced as the quarter went along, or did you start to see any signs of stabilization? Just would be good to, I guess, get some more commentary there as we think about the cadence for the rest of the year. Thanks.

I think you're talking about Asia Pacific as opposed to EMEA, but correct me if I'm wrong, Sheldon.

Sorry, sorry, yeah, Asia Pacific, thanks.

Yeah. Yeah, Stephen, the lockdown situation in Q1 was really the main driver of the revenue there. Certainly, we've been in lockdowns before. Lockdowns cause delays. in the transactional side of the business. Of course, the recurring side of the business continues to operate, you know, the property management and valuations and that sort of thing. Revenues were impacted in Q1 from the lockdowns. We expect that will ease as the year progresses. And, you know, we think the revenue growth there will be stronger in the future quarter.

Now, as you know, in China, for example, there's three cases of COVID and they've closed the whole country down. So notwithstanding that, we still generated pretty respectable revenues and earnings in that marketplace. But there are other markets in Asia that are going through similar lockdowns. So it is slowing us down a bit. But as you can see from the results, not materially so.

Yep, got it. That's helpful. And then just wanted to ask about the AUM growth in investment management. I mean, it's been really impressive and consistently strong. So what's working so well on that side in terms of capital raising? And what about Collier's broad-based capabilities? I guess, is there anything to call out that's helping to support that growth?

Well, I think it all starts with the exceptional platforms that we have already as part of our investment management platform. Harrison Street, Collier's Global Investors, and soon to be Basalt. These are all exceptional alternate asset platforms. They're managed by extremely seasoned professionals that own a direct equity stake in our business. And Stephen, as you know, over many years, that's been a core of the way Collier's operates. Our role is to help them accelerate their growth. There's various ways for us to have done that. You see in the case of Harrison Street, which is four and a half years in history now, and the company has tripled its size, it's tripled its EBITDA, and it's just starting. So there's a variety of ways in which we help them do that. But I would say that by and large, starting with exceptional professionals that have a significant equity stake in the business, is really the backbone of the success of Harrison Street. And, of course, Basalt has many, many of the same characteristics. So we're very excited about this aspect of our business. We think it's substantially hidden within Colliers. And we think our strategy in that area is second to none.

Good to hear. Thanks for taking my questions, and congrats again on the results.

Thanks, Stephen.

And our next question, coming from the line of George Demet with Scotiabank, Ilana Selpin.

Yeah, good morning, guys. Congrats on the results. Jay, I think you made it obvious that you wanted to to grow the investment management segment to beyond 23% of total EBITDA. I won't ask you how much, but can you maybe give us a sense of maybe what specific asset classes or areas that you want to get bigger in?

You know, the percentage we don't know because it's all a function of strategically acquiring the right businesses in the right way. So it's unlikely we're an acquirer of 100% of any exceptional investment management platform. But I think that there is a growing desire amongst entrepreneurially run businesses to join the strategy that we have. And so we're excited about it. You know, the only number that we have offered to the street is that over the course of our five-year period, our recurring revenue streams should exceed 65%. How much of that will be from our other recurring services or investment management, we don't know. But you'll see a trend – you'll see it – transform as we continue to pursue this growth strategy.

Okay, should we expect more, I guess, of infrastructure, student housing, senior housing? Is that kind of the lane we want to stay in?

Well, that's for sure Harrison Street. They dominate in that area in the U.S. They've established over the past year their first open-ended fund in Canada. They have an extremely successful and growing business in Europe, but it's all focused on infrastructure, students, seniors, other alternative asset classes that are where you can generate better returns for investors. So that's very much a core of how we see our overall platform in the years to come.

Okay, and you guys have been active on the NTIB as referenced for the first time as a public company. Operating performance has been strong. The shares haven't really reacted accordingly. I'm just wondering, is buying our own stock here maybe more attractive than M&A? Would you consider maybe a more meaningful return of capital to shareholders?

Well, I mean, it's something that we evaluate every day, George. Hourly. Every hour. And, you know, I think first and foremost, we are interested in growing our business organically and through acquisition. But when we see the market not appreciating the value of our shares, then that causes us to take consideration of that. And, you know, in April and in March, we acted and we may continue to act in the future on that. And we'll decide that, you know, on a day by day basis.

Okay, thanks. Just one last one for me. In general, occupier services was a big strategy of ours. We spoke about it quite a bit before the pandemic. Can you maybe just give us an update in terms of where we are now?

Yeah, we continue to be active in global occupier services, and we have a recruiting plan to grow that business meaningfully over the next five years as part of our Enterprise 25 plan. I think we're on track with that, and you see it reflected in the results.

Okay, I'll leave it there. Thanks, guys. Thanks.

Our next question coming from the line of Stephen McLeod with BMO Capital. Your line is open.

Great. Thank you. Good morning, guys. Hey, Steve. I just wanted to ask about the outlook and the revised guidance and just get a little bit of sense as to sort of what factors you're considering in the 2020 outlook with respect to maybe nearer-term visibility and potentially longer-term visibility as you get into the back half of the year.

Yeah, thanks, Steve. We increased our guidance for the year in part on the strong result in Q1, and also our good visibility into Q2 transaction activity. We also have very good visibility on the recurring side of our business, which is half the revenue, and that gives us confidence in our outlook. Now, as it relates to the back half of the year in transactions, we did not specifically increase the guidance for that, There are obviously some macro factors at play here, situation with the conflict in Eastern Europe, interest rates and all that stuff. But by and large, we are, as I mentioned, increasing our outlook for the reasons outlined.

Great, great, thank you. And then I just wanted to... with respect to Harrison Street and the investment management business, the strong fundraising momentum that you saw exiting Q4 and now coming into Q1, what kind of visibility do you have in terms of the fundraising momentum through the balance of the year?

Well, we have very strong visibility. This particular year, we're in the market with Christian, four? Six. Six funds. All funds are increasing in size from previous funds. As you probably know, 80% to 90% of the investors roll into the subsequent fund. And so we're quite excited about the prospects of fundraising in the current year. And Basalt is also actively fundraising as is Anterion. So it'll be very interesting to see how we do over the next couple of quarters, but our internal expectations are significantly better than last year, which itself was a record year for us.

That's fantastic. And then maybe just finally, You know, with respect to the macro backdrop and the potential for rising rates, are you beginning to see any of those conversations or any of those factors beginning to creep into conversations about transaction activity? Or is that something that is just kind of on hold for now and people are waiting to see how things unfold?

Well, you know, I tried to make the point in my prepared remarks that You know, macro concepts really don't affect colliers. They never did. And anybody who thinks they do is smoking something. Where we're impacted is in the investment decisions of investors that may or may not decide to continue with their investments. And it's all over the place. Some say, As interest rates go up, we're going to sell assets. Some say we have shopping malls, we're selling all the shopping malls and getting out of shopping malls because we don't like it anymore. Others say logistics are impacted by supply chains, so they're not going to build as many logistics centers. Inflation could be beneficial to owners of real estate, but we don't really own real estate. All we do is buy, sell, and lease real estate. So all we want is velocity in our non-recurring business. And as Christian said, more than just over 50% of our business is recurring today. So we're really talking about the non-recurring portion of our business. And there's more velocity. There's more pipeline. There's more activity. capital markets in leasing today than ever before and when I listen to the geniuses out there talking about the macro events and the tailwinds and all that stuff they're talking about owners of real estate potentially they're not talking about those who serve those owners as we do so I wanted to make that point and I thank you for bringing it up Steve because as a long-term investor and building huge value for shareholders over a long period of time, I smile at some of the editorial around this. So I think we're in an amazing position to capitalize and really not affected by too much of what goes on. Look, everybody is, stuff happens, But as you can see from our own results over the past 10 years, five years, pick it, we just continue to get stronger and grow better and gain shares. So I think Collier's and frankly some of its peers have tremendous business models that are unappreciated by the marketplace.

Well, great. That's a very good color, Jay. Thank you so much. Thanks, Christian.

All right, no problem. Thanks, Steve.

And as are my ladies and gentlemen, to ask a question, please press star 1. Our next question coming from the line of Scott Frumson with CIBC. Your line is open.

Thank you. I think that... You've gone over in pretty good detail the drivers and the factors, especially the outlook, and giving us a clear understanding of what your outlook is and how strong it is. Just a quick question, though. Are there any particular business lines under markets where you are seeing market share gains? Everywhere.

Everywhere. Market share gains, everywhere.

Okay. Thank you. I'll leave it at that. Sorry. No, I don't mean to cut you off.

No, all I'm saying is, I mean, just look at the actual results for the quarter. You know, it's been pretty consistent over the past couple of years. you know, up 30% in virtually every area. Pretty impressive. Yeah. And exceeding our own expectations, frankly. I mean, you know, I'd like to say, I'd like to pat ourselves on the back and say it was all, you know, all pre-planned. But these kinds of results across the board, market for market, are beating our own internal expectations, which which tells us that there's way more to go. And our pipelines continue to be very strong everywhere. So we're excited about the next phase.

That's great. Thank you. I appreciate the clarity.

And our next question coming from the line of Daryl Young with TD Securities. The line is open.

Hey, good morning, guys. Congrats on a good result. Thanks, Daryl. Just, I mean, the O&A segments have historically been very, very resilient. I'm still getting a lot of questions from investors about how they may or may not be tied through to the transaction side and how the transaction side is required in order to keep growing the O&A. Would you like to comment on that at all and maybe just clear the air on the ability to continue growing ONA even if there was somewhat of a pullback in transaction side?

Well, I mean, Darrell, we, as an example, in property management, we manage 2 billion square feet of space around the world. And in most of those contracts, we also provide leasing services for those owners of those assets. Now, the property management contract is a recurring monthly contract. Leasing, a little bit more opportunistic, right? If there's a tenant that needs space, then we're there to transact on behalf of the landlord to make that happen. They're tied together. They're very complementary to each other. But at the end of the day, the recurring revenue piece is the recurring revenue piece, and the transactions will come they come and they will come and and uh you know if there's a um uh you know any kind of a you know delay in decision making by tenants or whatever um we'll get that leasing revenue in a later quarter you know and i would add uh you know an important element of that is our engineering and project management business which i'm going to get the aggregate number uh slightly wrong

but it's probably together six or $700 million globally. Is that what it is, Christian? $600 million globally. These are all long duration relationships that continue to recur after the relationship is completed. So if we get retained by an owner to help with the construction of a new building for them, It's typically a three-year exercise, and that often continues beyond that three-year period. We may take over the property management of that contract. That particular owner might decide to build a second building or a third building, and that's in the project management component of our business. And in engineering, virtually every single day in every large complex, there is some engineering component service required. And once you're the engineer of record, it's again, a long-term duration to do the job. And then it's an ongoing support function for a long period of time. So when we talk about our outsourcing and advisory component, these are high value add services. This isn't janitorial, it's high value add services that have long duration strong client relationships that are valued. And we have a bit of a moat because we have inside information into how that building operates and where the weaker pieces of that building might be. So as the ongoing service provider or expert in the specialty building, we're there for a long period of time. I don't think many investors appreciate that piece of what we're doing. And that part of our business continues to grow very rapidly. And I think as the market for commercial real estate continues to mature, as we're seeing much more construction of new products, new buildings out there, even infrastructure assets out there that are that our investment management firms are participating in, all of them need a project management capability to manage and oversee the construction of those projects in a defined professional way. And so we see that component of our business continuing to grow rapidly, and it gives us a level of consistency and resilience that most others don't have.

And just to close that out, it also gives us the opportunity then to come in and provide the leasing services as I described or a sale or disposition, you know, if that owner or that asset decides to ultimately make that decision. So it ties the two parts of the business together. That's great, Collin. Thanks.

Was that too much? Was that too much? Did we give you too much there?

It's perfect. I think we can benefit from it right now, just given some of the concerns that are out there. So it's great, Collin. Thank you. And maybe just one last quick one. I'm not sure if you'll bite on this, but the potential for another vertical, has any headway been made there in terms of framing in what that could look like?

Well, as somebody asked the same question, maybe you on the last call, we have a full pipeline of activities in our existing verticals. We have global growth opportunities in every one of those verticals. So there's nothing really on the horizon that I can see. Famous last words of something tremendous came. We obviously have the capacity to do it, but We're very confident that we're building some very, very strong and unique and differentiated verticals that will really stand the test of time and create incredible value for our shareholders.

Okay, great. That's it for me. Thanks very much, gentlemen.

Our next question coming from the line of Frederick Bestin with Raymond James. Your line is open.

Hi, good morning. Hi, Frederick. The million shares that you repurchased, it started towards the end of the first quarter and then it's up until yesterday or today. Just wondering if it was evenly split between the two quarters.

I think we... We purchased around 600,000 shares during March and 400,000 roughly in April, Frederick.

Okay, that's good color. I'm just curious about how much liquidity you estimate you have going forward. I guess the Basalt transaction is as yet to close. And then you've got the extra amount that you spent on the share purchase. How comfortable are you that you can deploy capital, say, in the second half if some great opportunities present themselves?

I think we're very well positioned, Frederick. We have a $1 billion revolver, which has a low draw on it. I think we're on $200 million at the moment. First, we have the Basalt transaction to close. So lots of liquidity in the system, and our leverage is very low. So we're well positioned.

as your business has become more and more recurring in nature, are you comfortable kind of leveraging more too as well? You know, can you remind me of what your comfort range is right now with respect to net debt?

Look like our comfort zone is one to two times and we're comfortable at that two times level. Like for the reason that you, that you described with the higher amount of recurring revenue and, Certainly the business is transforming this year with the Basalt transaction. We're going to have 23% of our EBITDA from investment management, extremely high visibility and highly durable and high margin EBITDA coming from those services, low CapEx as well, so strong cashflow. And if we get to a point where our leverage is above two times based on an acquisition or something, we know we can quickly de-lever and get back into that sort of one to two times range quickly. So we feel pretty comfortable with all that.

Jay, I got one for you. Can you comment on the latest acquisition that Collier Z&D did in the U.S. Southwest, how that kind of fits in the whole strategy, how well diversified you are now in the U.S. and where you might take that business going forward?

You know, just briefly, Fred, you know, it was an excellent acquisition. From our perspective, it fit very nicely into our business. Our current business or pre-acquisition business had a very small and growing platform in Texas, so we needed a We needed to augment that business, which we did. And we're very excited about the new partners that joined the overall business. But I would say we have lots and lots of room in engineering in the U.S. and globally. And as you know, because you cover many engineering firms, we have a global brand. We have extensive client relationships and both of those things come in very handy, especially when you pursue a partnership philosophy as we do, which creates that much more alignment between the people that make it happen day to day and some of the other firms that are 100% owned engineering firms. So, you know, this has been, you know, standard fare for our business over 27 years. We understand how to build platforms through great partnerships with great people. And we see that this segment is ripe for the same growth trajectory and we can do it on a global basis. So lots to do there, but it's still a very small percentage, not very small, but still a small percentage of our global business.

Great. Specifically on a regional basis in the U.S., if I recall, you're in the Northeast, Southeast, and now kind of Texas. Is California a white space for you?

Is California – everything – sorry?

Go ahead. No, I was wondering if California was an opportunity here.

Yeah, and if you have an idea in mind, I'll give you my phone number, which I know you already have.

I do. All right, thanks. Thanks, Jay. Thanks. Thanks, Roger.

Yeah.

Our next question coming from the line of Shantani Ghotra with Goldman Sachs. Your line is open.

Hi, good morning. Congratulations on a strong quarter. Could you perhaps talk about the driver of higher margin guidance? I mean, I know you alluded to kind of, you know, getting some operating leverage, but then there's some acquisitions-related impact as well, which is obviously working favorably for you. But is there a way to think about a split in kind of, you know, what piece and how much is coming from just, you know, leverage in the business.

Yeah, for, for sure. Chandy, um, the, uh, operating, um, margin, um, increase is half from, uh, organic sources. So you saw in the quarter, um, the America's business, um, had, you know, strong revenues, but also strong, uh, margin, uh, growth. Uh, we expect that, uh, to continue. Um, through the year across all of our regional businesses from operating leverage, from higher revenues, also from some of the continuing cost management activities that we're undertaking around the company. The other half of the margin increase is from acquisitions. And as you know, investment management businesses operate at higher margins So the impact of the Ontario deal, which we just closed on April 1st, and the Basalt transaction closing in the second half will drive that additional margin expansion on a consolidated basis.

That is great, Culler. Thank you for that. And then for my follow-up, so you guys talked about, you know, thinking about buyback at this point, given how shares have just generally acted. Is there... something embedded in guidance that we should think about as we kind of model our numbers? You know, you have given that high teens earnings growth today, and how much of, you know, buyback is embedded in there? Are you giving any guidance around that?

The outlook that you see for you today does not have any additional buybacks factored in.

Understood.

And our next question coming from the line of Maxim Sitshev with National Bank Financial. Your line is open.

Hi, good morning, gentlemen.

Hi, Max.

Jay, maybe the first question for you, if it's possible. Given the fact that we've seen, obviously, some multiple compression of the public markets, I was wondering if you are seeing any changing body language from potential sellers as you communicate right now with the targets.

Thanks. No, I don't think so. I think the expectation of the sellers continues to be higher than they were a year or two ago for obvious reasons. Assets in the private market are trading materially higher than many public companies, including Collier's. So I'm not seeing any changes in pricing expectations from sellers.

Okay, that's super helpful. Thank you very much. And then, Christian, I just had a question for you in terms of non-cash working capital. There was a pretty significant draw this quarter versus last year. I'm just trying to see how we should be thinking about it as the year progresses in terms of some of that unwinding. If you can provide any comment, it would be super helpful. Thanks.

Yeah, that's a great question, Max. There were a couple of things in our working capital this quarter of note. One was a contingent consideration payment that we made. which is on the Harrison Street earn-out, and $59 million of that showed up as a negative against cash from operations. So that's a non-operating item in my view. Under GAAP, of course, it's shown as an operating item. And then secondly, the accounts receivable facility that we have – We drew on it during the quarter and there are some ins and outs on the cash flow statement from that, which resulted in the non-cash change in the accounts receivable being highly negative in the quarter. And that's something that is a non-recurring item and results in that working capital change that you saw. Sure.

And then in terms of kind of the rest of the year, is it going to be sort of closer to what we've seen in 21? Or how should we think about it if we were to exclude the Q1?

Yeah, on a full year basis, we expect to be highly cash flow generative as we are each year. The business generates strong operating cash flows. And of course, there is some seasonality to that. with the transactional businesses being very strong in the third and fourth quarters for cash flow. And we expect that to be the case again this year.

Okay.

Absolutely.

Yeah. Thank you so much for sure. Understood. And then just one last clarification. Jay, I'm not sure. Did you say that in terms of office leasing, we're still 5% below the 2019 peaks? I'm just trying to get the number right. And maybe any call in terms of when you think we're going to be eclipsing those levels and potentially going higher? Or what needs to happen for you to see that? Thanks.

Max, this past quarter we were on a global basis 5% below Q1 2019 for office leasing. Look, 5% is not a meaningful or material number. We hope to eclipse those 2019 levels if not next quarter, then the following quarter, I think there's positive momentum and positive trajectory for office leasing. And that's something that we're certainly watching closely.

And are you seeing any change on the industrial side of things? I mean, obviously, we've had tremendous the last couple of years. Just curious about what you're hearing from the clients right now.

Industrial continues to be very hot, and I think that's the case globally. You're also seeing some publicly traded REITs being acquired in that space. So it's a segment that's very hot right now and continues.

And I would add to that that we're seeing land sales at record levels, which is going to become industrial property in the future. which will only drive our leasing revenues and our capital markets revenues in the future because of that additional product on the market.

Okay. That's excellent, Colin. Thank you so much for coming.

Thanks.

I'm showing up for the questions at this time. I would now like to turn the call back over to Mr. Henning for any closing remarks.

Okay, thank you very much, Operator, and thanks, everyone, for participating in this quarter's call, and we look forward to doing it again next quarter. Thanks for joining us.

Ladies and gentlemen, this concludes the conference call. Thank you for your participation, and have a nice day.