Colliers International Group Inc.

Welcome to the Collier's International Second 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 40F as filed with the U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is Thursday, July 30, 2026. 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, and good morning. I'm Jay Hennick, Global Chairman and Chief Executive Officer of Colliers. Joining me today is Christian Mayer, our Chief Financial Officer and Chief Executive of Colliers Commercial Real Estate. Today's website and presentation materials are available on the investor relations section of our website. Collier's delivered another strong quarter with double-digit revenue growth across all three platforms, healthy internal growth, and continued improvement in earnings quality. In commercial real estate, we are seeing a broader recovery across our markets. Capital markets and leasing revenues each increased by more than 20%, supported by improving transaction activity, better financing conditions, and market share gains in most of our major markets. Engineering continues to be an important strategic differentiator for Colliers. Revenue increased 30%, driven by strong demand across critical infrastructure, Transportation, Water, Property, and Buildings. The acquisition of IESA expanded our global capabilities and strengthened our position across Europe, Latin America, the Middle East, and Australia. Engineering gives colliers recurring revenue, stronger visibility, and new ways to grow our enterprise. Harrison Street continued to add strength and differentiation as well. with assets under management reaching $110 billion and revenues increasing by 17%. Having built two large global platforms at Colliers in commercial real estate and in engineering, we are now building our third. We are bringing our investment management capabilities together across real estate, credit, infrastructure, and private wealth. We are creating more investment opportunities for our clients and greater long-term value for our shareholders. Together, the recovery in commercial real estate, the growth of engineering, and the expansion of our Harrison Street business are changing the quality and composition of our earnings. Today, approximately 70% of our earnings come from resilient, recurring revenue streams giving Colliers greater flexibility, greater stability, stronger cash flow, and perhaps most importantly, more ways to grow our business. What further differentiates Colliers is how our platforms are working together. Commercial real estate gives us market intelligence and deep client relationships. Engineering adds technical expertise and execution capability. Harrison Strait brings capital formation, investment discipline, and ownership expertise. Together they create a much more integrated Colliers, one that can engage clients earlier, serve more of the value chain, and replicate that model across high growth ecosystems. Data centers is just one example. We can help clients identify and acquire sites, provide engineering and technical services to design, build and operate these facilities, and deploy capital through Harrison Street, which over the past six years has invested more than $6 billion in digital infrastructure and data centers already. And after the fact, we can deliver leasing, sales, facility management and other advisory services as those facilities come on stream. That same opportunity exists across many other ecosystems within our business. By combining client relationships with specialized platform capabilities, we can create additional avenues for growth beyond the standalone opportunities inherent in each of our businesses. So in summary, our second quarter results reinforce the confidence that we have in our future. Step by step, we are building Colliers into a stronger global company with broader capabilities, more resilience in our performance, and better position to create lasting value for our clients, our professionals, and our shareholders. Now let me turn things over to Christian to review our financial results in more detail. Christian?

Thank you, Jay, and good morning, everyone. Please note that the non-GAAP measures discussed in this call are defined in our press release and quarterly presentation. Unless otherwise noted, all revenue growth figures are presented in local currency. Our second quarter consolidated revenues were $1.6 billion, up 16%, and net revenues also increased 16% to $1.4 billion. Adjusted EBITDA was $205 million, up 14%. adjusted EPS increased 6% to $1.83 and was tempered by higher interest expense. These results met our expectations and our momentum gives us confidence as we enter the second half of the year. Commercial real estate segment net revenue for the quarter was up 12%. Capital markets rose 23% with growth across all geographies led by the Americas and Asia-Pacific Activity in industrial property sales was up notably in all geographies. Leasing revenues were also up 23% led by U.S. Industrial with all global regions contributing to growth. The segment net margin was 11.9% up slightly over the prior year. Engineering second quarter net revenue was up 27% from a mix of recent acquisitions including a partial quarter of IESA and solid 5% internal growth. Our net margin is 14.5% up slightly over last year. Our engineering backlog stood at 12 months as of June 30th, indicating strong momentum for the back half of the year. Investment management net revenues increased 15% driven by a recent acquisition and internal growth from New Capital. The net margin was 36.5%, as expected, given ongoing planned global platform building under the Harrison Street Asset Management brand. These costs will continue to impact margins for the second half of the year, and we expect margins to stabilize in the low 40% range for 2027. During the quarter, Asset realizations generated strong gains and resulted in the return of $1.9 billion of capital to our limited partners and $3 billion year-to-date. Our demonstrated ability to monetize high-quality portfolios at attractive prices and make meaningful distributions to investors has always been a key differentiator for us. We raised $2.2 billion in new capital commitments in the second quarter and just under $3 billion for the six-month period. Year-to-date fundraising is on plan and we expect an acceleration in the second half. Our annual fundraising target for 2026 remains unchanged at $6 to $9 billion. Turning to our balance sheet, we completed the IESA acquisition late in the quarter and despite significant capital deployment for this strategic platform, we finished the second quarter with leverage of 2.8 times. We expect to deleverage significantly in the second half of the year as the majority of our seasonal cash flows come in and should finish the year in the 2.3 times range. Given this leverage profile and given the current undervaluation of our shares, We may choose to deploy capital on a stock buyback as we progress through the second half of the year. We are reaffirming our full year 2026 outlook. The key forward-looking indicators across our business segments being transaction pipelines, engineering backlogs, and fundraising pipelines are up nicely over the prior year. Geopolitical risk and macroeconomic volatility continue to be elevated, as we all know. However, we believe that these risks should not materially impact our overall results. That concludes my prepared remarks. Operator, can you please open the line for questions?

We will now begin our Q&A. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from the line of Himanshu Gupta with Scotiabank. Himanshu, your line is open. Please go ahead.

Thank you and good morning, everyone. So first on commercial real estate, Looks like industrial was strong for leasing. Industrial was strong for capital markets as well in Q2. So just wondering what led to this trend and how do you see momentum in Q3?

Thanks, Manchu. So industrial is one of our key historical Strength areas, and it continues to be the case. And in the quarter, we saw strong demand in the Americas, in the U.S. in particular. And that was, I think, partially a reflection of some uncertainty that happened last year, post-Liberation Day, which was in the second quarter last year. So a bit of an easier comp. led to some stronger growth in that area. As we look ahead, momentum is strong, but we do have some tougher comps ahead in the third quarter.

Okay. And overall, how do you see, you know, losing revenue or capital markets in Q3?

Yeah, we expect leasing revenues to be up in the mid single digit range and capital markets to be again, you know, strong, you know, 15% or thereabouts year over year growth.

Got it. Okay. Thank you. And then just moving to investment management, especially the margins. Is the recovery pickup in margins getting pushed to the next year and not likely to be in Q4? So maybe anything on the margin side.

Yeah, Himanshu, as Jay mentioned, we're building a global investment management platform with Harrison Street. and we have taken additional integration steps this year including Round Shield rebranding and integrating with our Harrison Street Europe business which was announced just a few weeks ago. So taking our time to integrate this business and build it for the future and that will impact the margins here for the remainder of the year. We expect the margin profile to increase in 2027, as I mentioned in my prepared remarks, to the low 40s range.

Thank you. And maybe just the last question. I think over $2 billion was raised during the quarter. Has this capital being deployed? I'm just trying to see that when will this raise will lead to EBITDA pickup in numbers?

Yeah, so we did raise $2.2 billion of new capital in the second quarter. That capital comes in a mix of fund types. Some of the closed-end funds, that capital becomes fee-bearing immediately, and in other fund types, it will take some time to deploy that capital, and then that capital will at that point become fee-bearing immediately. So this is a normal part of the fundraising process. Some capital, as I mentioned, becomes fee-bearing immediately. Some takes time to be deployed and then become fee-bearing. But that's reflected in our expectations for the year.

Thank you so much, and I'll be back. Thank you.

Your next question comes from the line of Stephen Sheldon with William Blair. Steven, your line is open. Please go ahead.

Hey, thanks. I wanted to start on the engineering side. I'm just curious if you can talk a little bit more about how internal organic growth there has been trending in the first half of the year and then how you're thinking about it in the back half and potentially in the early next year. And then also, I really appreciate the color, Jay, on how engineering ties into the rest of Collier's businesses. I think that's been an area of focus for for the buy side, how much cross-selling opportunities there are between engineering and kind of the core CRE business. So just curious, yeah, do you think it'll take some time for some of the cross-selling opportunities to be realized, or are you already starting to see some of those come in? So, yeah, for just a little more color on engineering.

Great. Good question. I'll take the margin question. Our year-to-date margin – sorry, our internal – growth question on engineering. Year to date internal growth in engineering is 5% and we expect that to continue for the remainder of the year. Then I'll pass the question on the cross opportunity in engineering to Jay.

You know, Steve, it's frustrating for me because we have not been able to articulate the full The power of the differentiation that we're trying to create at Colliers. The engineering platform is not good, it's awesome. And if you think about it, and I tried to give you an example in my prepared remarks, if you think about it, all the work done in much of, and it's not just data centers, it's in all ecosystems, whether you're building a building, you're building infrastructure, you're building any asset. We're designing, we're building, we're project managing all through our engineering business. So the connectivity between the different platforms, which for Almost since inception, I don't think people really understood because they saw commercial real estate as a standalone platform, engineering, and Harrison Street all as three standalone platforms. When they're actually working together more and more, the same clients are retaining us to do more and more along the whole value chain. and now with IESA and opening up markets where we had huge presence in commercial real estate across Europe, the Middle East and Australia, but we didn't truly have any engineering presence. Now with IESA, which already is doing business with both our commercial real estate and our investment management business. They're pitching business together, sort of a complete end-to-end solution. So we think that over the next couple of years, being able to handle the entire life cycle of assets will create a differentiator for Colliers that none of the other peers have. Some of them have bits and pieces of it, but we think that we have a truly strategic differentiated and many others. These are global platforms run by people who have a vested interest, equity stakes in our businesses through our partnership philosophy. That creates huge glue and huge collaboration desire from each of the partners to work with the others. So it's a bit of a frustration for me because we have not been able to articulate the power of the three different platforms working together. And we're going to dial up our efforts to do that over the next number of quarters until that finally hits home.

That's great to hear. Very, very helpful commentary, Jay. And then just as a follow up, I guess two questions in investment management. One, it seemed like management fees as a percentage of AUM stepped up nicely this quarter. So just curious what drove that and whether that's something structural and maybe that can keep moving higher from here. And then two, am I right to think that it could get easier for fundraising activity? I know it's been a challenging couple of years, but as capital market activity picks up and as institutional LP starts to see more capital

Yes, I mean, one of the key, again, we are building a global platform with Harrison Street. That means bringing together all of our unique strategies that we had around the world. As you know, Steve, you've been following us for a long time. We built this platform one step at a time since 2018. and we built it through four acquisitions of very good operators that had a vested interest in their strategies. And now we're bringing them all under the Harrison Street banner on a global basis. We're taking distribution that it was previously done across the different platforms. We're standardizing them. There's so many aspects that we're doing and that's putting us in a different category in terms of fundraising. So all of our 45 people that are in capital distribution are in front of clients and the clients are making the decision on which strategies are more interesting to them. And so in the case of our proven Funds, Harrison Street 10 is in the market right now. Basalt 5 is in the market right now. There's a variety of strategies that have stood the test of time over a long period of time. But there's also new strategies that have been introduced that our investors are saying, tell me more about that. And if you don't do that in a streamlined way, you're missing a great opportunity to leverage relationships that The Harrison Street core business would have with some LPs. And now Basalt can leverage those strong relationships and introduce them to mid-market infrastructure deals that they're also interested in. So building a platform takes time. It takes expense. It takes bringing together teams. But we're very, very, very pleased with the results. All of the partners, and again, I emphasize, as you know, our philosophy has always been around perpetual partnerships. All of our partners in each of the strategies had the choice of staying by themselves or rolling up into Harrison Street Asset Management and two, a professional. They all rolled up and together they own circa 25% of the equity of this very valuable platform and doing what we're doing is only making it much more valuable.

Makes a lot of sense. Thank you.

Your next question comes from the line of Erin Kyle with CIBC Capital Markets. Erin, your line is open. Please go ahead.

Hi, good morning. Thanks for taking the questions. Maybe going back to the engineering segment on the margin side. So the prior two quarters had seen some margin contraction on lower utilization that you had called out in the past. And then we saw net margins expand year over year. So the question is, is utilization back up where you expect it to be? And are there any other productivity metrics or anything you can point to in the engineering segment?

Yeah, Erin, the margin in our engineering business will vary on a quarterly basis because there is seasonality in our business. And as you're aware, we operate in Canada and the The northern parts of the U.S. where winter is a significant factor in driving revenue levels as well as utilization levels. In the past few quarters we have called out some utilization areas in certain end markets and that's always going to be a factor in our business and for that reason we have a multi-discipline diversified Business with multiple end markets and multiple client types and also a diversity of clients between public and private sector. So nothing really major to call out this quarter. The IS acquisition, as you know, has higher margins, so that is going to impact the margin profile a little bit in the back half of the year as we bring that business on stream.

The only thing I would add to that, Christian, is IESA also softens, creates more geographic diversification into different markets that have different climate issues.

Yeah, that's right. The seasonality of IESA is almost non-existent. It generates 24% to 26% of its revenues in EBITDA in any given quarter, given the markets that it operates in. and without the weather-related seasonality.

Okay, so that's helpful on a go-forward basis. Maybe in 2027, we see a little bit less of that quarter-to-quarter variability there. Maybe if I switch gears to the commercial real estate segment, growth has been quite strong for the past two quarters. in capital markets and leasing this quarter as well. And that's kind of in despite of an interest rate environment that hasn't necessarily been as constructive as everyone was expecting maybe heading into the year. So would you say that's mainly a function of like pent up demand in the market or is Collier's winning share here as I know you've been recruiting for new team members across the CRE segment as well?

Aaron, we certainly believe all that is the case. We have been winning share of market and in particular in terms of our recruiting efforts, I think we've been very disciplined but yet aggressive on recruiting and we've added more producers than others. I think relative to our publicly traded peers in the U.S. at least, we've added more producers on a percentage basis than they have. And I think that's starting to show in our numbers. And it has been a modest drag on our margins over the last few quarters as we ramp these folks up. So we're feeling very good about our business and about the trajectory. The rate environment, of course, is one that is top of mind for real estate investors. And I think as long as it's in a range, activity levels will continue. and those ranges are fairly wide. And as long as Geophysical Events continue to be under a reasonable level, we should see strong activity through the balance of the year.

Thank you. That's helpful. I'll pass the line. Your next question comes from the line of Jimmy Shawn with RBC Capital Market. Jimmy, your line is open. Please go ahead.

You mentioned share buyback. So I guess with the stock trading where it is, how are you prioritizing between share buyback versus the tuck in M&A that you'll be doing, especially as leverage comes down? And then at what leverage level do you feel comfortable accelerating either?

Well, you know, obviously, stock buybacks has been presence of mind for us. As you know, some of the senior executives here have been buying significant amounts of stock in the company, but we did not believe that it would be prudent for us to be using our normal course issuer bid to be buying back stock in light of the Significant IESA transaction, which is now completed. As Christian mentioned, the margin, the leverage of we expected something around three at the time we contracted for that transaction. It's come in at 2.8, which is positive. And you can see our cash and many more. The other thing is that acquisitions continue to be abundant for us. And there's lots of opportunity, not just with IESA, which opens up all kinds of new markets, all kinds of adjacencies, additional qualifications that help not only the IESA business, but can be transferred to our other businesses. So we don't want to slow down our acquisition activity at the same time. So we always, even if there's a difference, a current difference in where Colliers is trading versus buying an exceptional business that will pay dividends over a long period of time. We will always default to a great acquisition. That's something that will add to us as we've done for 30 years. So I hope that gives you a little bit more color around our thinking on the issuer bid.

Yep, that's helpful. Maybe just as a follow-up, you've still been acquiring, obviously the last few acquisitions have been on the engineering side. I guess with the uncertainty with respect to how AI can potentially impact the business, at least from a public market perspective, I wondered if there's been any change in the multiples that you've observed that people are paying for engineering firms, or how would you underwrite, if at all, any AI risk when you underwrite those businesses?

Well, I can give you my professional response or I can tell you the way it is based on my experience. And so I'm just going to do what I always do and tell you the way it is. Look, technology and AI are always an important element, but You know, everybody woke up last week and all of a sudden AI is a fancy word. For years, we've been using technology to automate workflows and get productivity gains and take our specialized data and create special insights and unique insights for our clients. And one of the things that we've done in light of the additional focus on AI as we tasked our people to create a shopping list of ideas and opportunities that can improve our business further using AI. And there were several interesting ones and we've increased our technology spend against the highest priority initiatives. So AI has actually become a benefit in the sense that it's raised It's raised the focus around making changes to our business to become more competitive and unlock some embedded data sets that we might have. But really, at the end of the day, it's not about all of that. It's about professional judgment, specialized expertise and trusted relationships. which don't change. So when I think about both commercial real estate and I think about engineering, I think that they are going to only get better, more efficient, but the most important thing which you alluded to in your first sentence is, yes, we are adjusting down the purchase prices, arguing that AI is going to have a major impact on some of these businesses, which it will not. and I say will not. It's will not to the big players because we're in the game and we're doing what we need to do. The small guys don't have the depth and capital to capitalize on these things but the bigger guys do and I think AI will only help us make our business better but the smaller guys don't have those advantages and as a result we could be buying and are buying exceptional businesses albeit smaller at better valuations this year than last year for example for that reason.

Okay appreciate the comment thanks.

I will now take this time to remind analysts that if you would like to ask a question please press star one. Your next question comes from the line of Daryl Young with Stifel. Daryl, your line is open. Please go ahead.

Hey, good morning, everyone. First question is just around the real estate services and outsourcing activity. Given the strength in transaction activity, I might have expected to see a little bit stronger performance in outsourcing advisory. Is there something specific you can speak to on the Europe and Asia weakness you highlighted?

Yeah, I mean, the only real challenge we have in our outsourcing business right now is the local project management in those two markets. And there's some timing of projects, which we'll start to see those come through in the fourth quarter of this year. The other parts of the business, property management, valuation, loan servicing, all up nicely in the second quarter, and we continue to through the balance of the year.

Got it. And then just quickly on the data center theme, one of your peers provided an outlook for some pretty exceptional long-term growth and revenue targets. And I know you've referenced data centers in the past as just another asset class that you're capable of servicing, but there does seem to be some pretty significant early mover wins in that sector. So is there a more formalized strategy that you're taking or that's evolving in the background around data centers for colliers?

You know, the short answer is that we, in each of our businesses, are focusing very closely on the growth in data centers, and we believe we're getting a strong share, whether it's in engineering, obviously, Harrison Street owns $6 billion worth of these centers, which gives us natural connectivity to be doing business there. We have not developed, as you're suggesting, a uniform strategy across all platforms yet. I presume we will over time. What's happening is that there's lots of growth and so for example, if we're doing data center work for a client in engineering and that client goes and does a separate data center, we generally get the first call. So there's a great opportunity for us to take more share from that particular client in a different geographic region. and we're seeing quite a bit of that, which is exciting to see. But I would say if I'm being candid, we are very busy with data centers right now. And so it's difficult to get everybody together and say, let's create a uniform strategy when they're just trying to even see the internal growth in engineering is quite strong. And we expect it to get a little stronger and one of those areas is data centers.

Got it. Just one last one. On the NCIB, did you say you'd be willing to take the leverage back to three times in the back half of the year to get aggressive on the NCIB or did I mishear that?

Daryl, to be very clear, we did not say that. In my view, 2.8 is the high water mark. We're going to de-lever through the balance of the year. And we may, at these prevailing prices, spend, just for argument's discussion's sake here, $100 million would buy back 2%, 1% of our float. It could be nicely accretive without being meaningfully impactful on our leverage, and certainly we don't expect to have a material increase to our leverage as a result of a stock buyback action.

It really depends on the M&A opportunities as well, because we do have quite a pipeline of deals, and we'll have to see how the balance of the year shakes out before we execute on that.

Thanks for that, guys, and congrats on a good quarter. Thank you.

Your next question comes from the line of Mitch Germain with Citizens Bank. Mitch, your line is now open. Please go ahead.

Thank you. Jay, while I recognize engineering and investment management are very nuanced and differentiated, is there a thought around having IESA, Englobe, and other of your key executives coming up with maybe maintaining their existing brands, but coming up with some sort of unified strategy around that business line?

Around which business line? Engineering. Engineering. I don't really understand your question. Do you want to give it to me again?

I understand that the individual brands have a lot of value, but obviously you have certain potential cost savings initiatives that you can deliver if you kind of unify some maybe back office or other sort of and maybe best-in-class practices that they can be sharing in their individual competencies. So is there any thought around, you know, kind of making sure that you can leverage that knowledge and capability and be able to spread it on a more global basis?

Well, they're doing that today. I mean, you know, remember all technology is run centrally. Each of the divisions have their own and many others. But on the business front what we're finding is that the engineering businesses in the different geographic regions are working closely with the primarily commercial real estate and investment management or The investment professionals within the investment management business to see about bringing together a complete solution for clients. And they're doing that naturally right now. I would say it's still early days to have a much more formalized approach. But anything internally around How do we rationalize, simplify? Is there a way to create additional efficiencies, bring down data costs across the organization? That's all been something that we've been doing for years across Collier, so that's happening. But the new business connectivity is becoming more interesting because, as I said earlier, the client relationships If you've got a strong relationship with Costco in one part of the U.S. and they're building a data center or a building and it applies not just to data centers but all kinds of other ecosystems, they're building something else in other parts of the country, it brings the two opportunities together very nicely and it's spreading business around. I would say nothing's formalized yet. I think we need another year or two of really capitalizing on some of the business opportunities we're getting and seeing how everybody naturally comes together. But we are capitalizing on, I would say, the easier things, which is, you know, the internal cost structures and ways in which we can become more efficient.

That's super helpful. And then remind me what you guys are viewing as more of a long-term leverage target. I think you were back in 2024, you were around two times. It's come up with a bunch of acquisitions. I know that you're forecasting it to come down a bit by year end. But, you know, kind of longer term, is there some sort of, and many more. Thank you. I appreciate it.

Your next question comes from the line of Frederick Bastion with Raymond James. Frederick, your line is now open. Please go ahead.

Good morning, guys. It's still early days for IESA under the Callers platform, but are there any early surprises, positive or negative, that you can share?

It's been a very positive experience so far. We found the team very excited about becoming partners finally in the business. They're now real equity partners in the business. They had not had that opportunity under the prior ownership structure. They are very engaged internally in their growth as well as with our commercial real estate folks and our other engineering folks around the world to explore opportunities to work together and to build the business. So it's been a very positive first couple of months and we look forward to building our relationship more deeply with that team.

And you know, Fred, as you know, yeah, just sorry, Fred, as you know, These deals generally take a year or a year and a half to come to fruition. So we've had a long time to work with the team and better understand what their motivations are and where their opportunities are that they couldn't pursue under the previous ownership structure. So that's been quite exciting. They're exceptional operators. but I think, I could be wrong, but I think since 1964 when the company was founded, they made one acquisition in Australia. And that one acquisition was a company that our team looked at also in Australia and it was relatively recent. So there's an opportunity to bring those two together. But the bigger point is, There's lots of opportunity within their existing markets with relationships that they've had for years and years and years that we think that we can capitalize on with this great team over the coming years.

Great, and just building on that, are there any specific areas of expertise or capabilities within the business, within AESA, that you're particularly excited about to potentially cross-sell across the broader callers platform?

Yeah, they have a very strong expertise in desalinization. I think they run, I don't know the number, It's something between 6 and 10 large, they designed them, they built them, they operate them in the Middle East using technology I believe that they were able to gain from Israel. And that's an interesting area for them. And they have some marine engineering expertise. and water, which we think that we can transfer to other markets. So, you know, each engineering platform in other companies, as you know better than most, have lots of different expertise. But, you know, I think IESA brings two or three more that we can transfer hopefully easily to our other businesses.

Perfect. Thanks. That's all I have.

Your next question comes from the line of Stephen McLeod with BMO Capital Markets. Stephen, your line is now open. Please go ahead.

Thank you. Good morning, guys. And lots of great color so far on the call. So thank you specifically around some of the cross-selling opportunities. Nice to hear about the long-term opportunities. I just wanted to focus in just a little bit. You talked in your prepared remarks about having very strong back half visibility into all three segments. And I'm just curious sort of what the foundation of that is. I mean, maybe starting with CRE, what are your customers saying about rates, the rates environment? And then in engineering, you talked about having a 12-month backlog. And I'm just curious how that's trended relative to prior quarters.

So we track our pipelines in commercial real estate in a very disciplined manner. We've been doing this for a long time, and it's something that is a key part of what we do every day and how we manage the business every day. We certainly look at the 10-year Treasury as a bellwether for the U.S. in particular. At 4.7, it's kind of on the high end, but it moves around, as you know. With the information we have and in our best judgment, we see a strong list of transactions that will happen. over the next year. And we have more visibility into the more near-term transactions, being the ones in the next quarter or the next six months. And as a result, that gives us the confidence we're looking for. In terms of our backlogs in engineering, we have really four engineering businesses that operate around the world. ISA being the newest. Each one has a wide variety of clients and end markets and each one tracks its revenue backlogs. Our goal always is to have a 12-month backlog of work under contract and that is where we currently sit. So I know that can vary a little bit seasonally, but certainly right now where we sit is very comfortable. And we have the visibility we need from that backlog to give you the outlook that we delivered.

That's great. Thanks, Christian. And then I know we're talking a little bit about sort of leverage and the balance between that and buybacks. you know you're very long-term thinkers so when we get to 2027 and you think about the acquisition opportunities beginning to uh or the opportunity for you to be able to deploy capital for acquisitions in a more meaningful way um can you just give a bit of color around sort of what you see as your your next top priorities yeah i mean um our our nearest term top priority is to complete

The build-out of Harrison Street Asset Management is a global player. Anyone that follows the asset management business will see that Harrison Street is among one of the bigger players in the next tier below the obvious big guys. There's lots of opportunity for us to continue to consolidate that business. There's a lot of opportunity to raise additional capital. You know, the early talk for 27 and beyond is higher than what we're talking about today, primarily because there's more strategies, more opportunity. So, you know, in a short, you know, just to summarize today, I think our nearest term focus is to finish the job at Harrison Street, bring it all together in a streamlined way. We actually, as Christian alluded to, we actually accelerated a few steps in the integration process over the past quarter because we thought there was a great opportunity to do it in Europe. Round one was to bring it all together in the U.S., which is largely done. Round two is Europe. and, you know, round three is an expansion into Australia, New Zealand, which we're already on the ground and looking for opportunity down there as well. And then where do we go from here? Base business is strong. We're focused in the right areas. Some of our peers are in traditional real estate assets. We have a very small component of our business in traditional real estate. We're focused on alternate real estate, infrastructure, debt, things like that. So we like the categories that we're in, but there's lots of opportunity for us to consolidate, bring other exceptional strategies into the fold. So I would say there's that. Engineering continues to be a growth engine. And even in commercial real estate, there's some interesting opportunities to strengthen our debt origination business, create opportunities to enhance our access to capital flows, to fund some of our professionals' origination. So there's just a lot happening, and that's one of the great things of having a global platform now in three different areas. We can grow globally. We can grow by service line. We have a much more resilient revenue stream than any of the others do by quite a bit. And so we're really building a highly diversified, resilient business the way that we've done it for so many years to create long-term value for our shareholders, the largest of which are the people that run the business day to day.

That's great. Thanks, Jay. Thanks, Christian. Appreciate the call. Thanks.

We have reached the end of our Q&A session. I will now pass the call back to Mr. Jay Hennick for some closing remarks.

Thank you, everyone, for participating. And we look forward to speaking again at the end of the third quarter. So thank you.

This concludes the conference call. Thank you for your participation and have a nice day.