CBRE chief executive Bob Sulentic has said the agency has “evolved” to the point that worries over the speed of a capital markets rebound will not hurt its growth prospects.
In third-quarter earnings, CBRE said global property sales revenue showed year-over-year growth for the first time since the second quarter of 2022, at a better-than-expected 14%. The agency delivered its second-highest Q3 earnings on record, with all business lines posting double-digit growth. Chief financial officer Emma Giamartino said the firm has “greater earnings growth potential than at any point in our history”.
Asked on an earnings call with analysts what the capital markets recovery could look like in 2025, Sulentic said: “Our current expectation is not that it’s going to be a steep capital markets recovery. We think it will be a steady recovery. We think buyers and sellers have largely come together for most asset classes or very close to having come together. Not yet for office, obviously.”
But Sulentic emphasised that CBRE’s performance will not hinge on that business line.
“We share the market’s enthusiasm and expect to benefit from a capital markets recovery over the next several years,” he said. “But it’s important to stress that CBRE’s strong short- and long-term growth prospects are excellent regardless of the real estate capital markets impacts. This owes to the progress we have made in building our resilient businesses, our leadership in the global leasing markets, and the large and growing total addressable market for our business.”
He added: “Real estate capital markets are important to our business, but their lower relative contribution to our performance underscores the extent to which we have evolved and diversified CBRE’s business and underpins our confidence in our strong long-term outlook.”
Asked whether the agency would look to “rehire” in its capital markets division as the market improves, Sulentic said: “We’ve got considerable capacity in our mortgage origination team… And we’ve got capacity in our investment sales team. So we don’t need to add talent to grow those businesses materially.
“But it is important – and maybe I should make a clarifying comment – we talk so much about the growth of our resilient businesses because that’s an important part of our strategy. But we are doing nothing to restrain the growth of our transactional businesses. We are the market leader in capital markets and leasing, and we are investing in growing those businesses. So you should expect to see us add talent to both the leasing side of the business and the capital markets side of the business. But we don’t need to do that to grow significantly from where we are now.”
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