CBRE Group Inc

Greetings and welcome to the fourth quarter 2024 CBRE earnings conference call. At this time, all participants are in a listen-only mode. A 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, Shadani Luthor. Thank you. You may begin.

Good morning, everyone, and welcome to CBRE's fourth quarter 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. Today's presentation contains forward-looking statements, including without limitation statements concerning our business outlook, our business plans and capital allocation strategy, and our earnings and cash flow 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. Also, in our press release, we have provided historical non-GAAP financial information for the new segments, which we will begin reporting with Q1 2025 results. We will provide more details, including historical quarterly financial information by lines of business based on the new segments prior to releasing our Q1 results. I'm joined on today's call by Bob Selentik, our Chair and CEO, and Emma Giammartino, our Chief Financial Officer. Throughout their remarks, when Bob and Emma cite financial performance relative to expectations, they are referring to actual results against the outlook we provided on our Q3 2024 earnings call in October, unless otherwise noted. Also, as a reminder, our resilient businesses include facilities management, project management, property management, loan servicing, valuation, and recurring investment management fees. Our transactional businesses comprise property sales, leasing, mortgage origination, carried interest, and incentive fees in the investment management business and development fees. Finally, unless otherwise noted, whenever we cite growth rates, we are referring to the percentage change versus the 2023 fourth quarter in U.S. dollars. With that, I'll turn the call over to Bob.

Thank you, Chodney, and good morning, everyone. Q4 of 2024 was CBRE's best quarter ever for core earnings and free cash flow with broad strength across our business. We also made significant progress in executing our strategy, positioning the company to continue to deliver double-digit earnings growth on an enduring basis. First, we acquired Industrious, the premium flex workplace provider. This advances our ability to meet office occupier and landlord demand for flexibility and an elevated experience. The industrious transaction also became the catalyst for us to consolidate all our building management businesses into one segment called Building Operations and Experience. This move allows us to build expertise and scale advantage across many areas that are common to the operation of buildings. Jamie Haddari, Industrious' CEO, who has exceptional strategic operational and entrepreneurial skills, is leading this segment as its CEO. We also completed the combination of CBRE project management with Turner and Townsend. This creates a large, uniquely positioned program and project management business with multiple avenues for resilient revenue growth in areas like infrastructure, energy, and data centers. Finally, we took two additional steps to upgrade our senior leadership team. First, we gave our COO, Vikram Kohli, whose capabilities are evident in the major impact he had on our business in 2024, additional responsibility as CEO of our advisory business. Second, we named Adam Gallestel, who will join Seabury in April, and Andy Glansman as co-CEOs of our investment management business. As leader of GIC's America's Business, Adam forged an exceptional track record and prominent industry profile, while Andy has proven to be a strong operational leader who has overseen CBRE Investment Management's strategic evolution. With all these moves in mind, we have reorganized the company into four business segments. Two of the segments, building operations and experience, and project management, are entirely comprised of resilient businesses. Together, they generated $1.4 billion of SOP in 2024, and they are growing organically at a double-digit rate. In both segments, we have tremendous opportunities to scale our position in huge, fragmented, and under-penetrated markets. Our advisory segment, which includes leasing, capital markets, valuations, and loan servicing, is a cornerstone of our business. It is responsible for producing large profits, high margins, strong cash flow conversion, and abundant data and market intelligence that is valuable across our company. Our real estate investment segment, which includes our investment management and development businesses, is underappreciated. This segment has significant embedded profits, and we expect it to become one of the leading contributors to our long-term growth. Additionally, it is an ongoing source of compelling investment opportunities for CBRE. Our confidence in CBRE's future has never been higher, as evidenced by our considerable share repurchases since the end of the third quarter. Despite the strong appreciation of our shares over the last year, we believe the market is undervaluing our business relative to both its growth profile and dramatically enhanced resiliency. Now Emma will discuss the quarter's highlights and our outlook for 2025. Emma?