CBRE Group Inc

Greetings and welcome to the Q1 2024 CBRE Earnings Conference Call. At this time, all participants are on a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brad Burke, Head of Investor Relations and Treasurer. Thank you. You may begin.

Good morning, everyone, and welcome to CBRE's first quarter of 2024 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 capital allocation strategy, and our financial outlook. Forward-looking statements are predictions, projections, and 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'm joined on today's call by Bob Slentik, our chair and CEO, and Emma Giammartino, our chief financial officer. Now, please turn to slide five as I turn the call over to Bob.

Thank you, Brad, and good morning, everyone. Before I begin, it's important to note that Emma and I regularly reference our performance relative to expectations during these quarterly calls. In all cases, the expectations we are referencing are based on the outlook we provided during our most recent quarterly call. We started 2024 by delivering core earnings that exceeded our expectations. This was driven in part by solid net revenue growth. However, several notable elements of our performance differed from our plan going into the year. I'll touch on three of them. Leasing strength property sales weakness, and cost pressure. Leasing outperformed expectations driven by office leasing growth globally that reflects a resilient economy and companies making progress on bringing their employees back to the office. At the same time, persistent inflation kept interest rates higher than expected, which led to underperformance in our property sales transaction activity. Our global workplace solutions segment again delivered double-digit net revenue growth, even as margins fell short of expectations. Our costs in GWS have increased at an unacceptable rate, and we have initiated actions to bring them quickly back into line with revenue trajectories. These actions include consolidating the management of advisory and GWS under our chief operating officer, Vikram Kohli, with an explicit focus on rapidly wringing out unnecessary costs and better integrating the solutions we deliver for occupier clients. Significant progress has already been made on these efforts. We expect GWS's cost challenges to be mostly mitigated by year end, with the majority of our actions being initiated in the second quarter. As a result, this segment remains poised to achieve mid-teens SOP growth for the full year. Looking across the whole business, we remain confident that we will generate core earnings per share in the range of $4.25 to $4.65. Our confidence is underpinned by our resilient businesses' continued strong performance, our rapid actions on costs, and the fact that advisory services remains on track to achieve its growth target for the year despite a more uncertain economic outlook. Emma will discuss the specifics of our outlook in greater detail after reviewing our first quarter performance. Emma?