Cushman’s income drops 70% in Q1

Cushman & Wakefield reported net income of nearly $7 million in the first quarter of 2020, down 70 percent from the same time last year.

Revenue remained relatively flat at just shy of $1.9 billion, but the firm posted larger operating losses.

The steady stream of revenue from property management, which made up a little more than half of the quarter’s fee revenue, helped mitigate the losses in leasing and capital markets due to the coronavirus pandemic, according to CEO Brett White.

“Businesses in our industry that are only capital markets businesses are going to get hammered,” he said on the company’s earnings call Thursday evening.

White said the big three real estate service firms — Cushman, CBRE and JLL — are well positioned to weather the financial downturn thanks to their large property management businesses. Smaller firms that focus on capital markets or leasing, he said, would feel the pinch more.

“We’ll be watching those firms carefully,” he added.

White said Cushman has put mergers and acquisitions on hold for the time being. But he said the company would make an exception if particularly attractive deals came across the table.

He said that in the early days of the pandemic, companies were surprised by work-from-home productivity levels, leading to questions about whether firms would abandon large portions of their office space en masse.

He said those opinions are changing now. “That conversation has changed demonstrably,” he said.

Contact Rich Bockmann at rb@therealdeal.com or 908-415-5229

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