Colliers’ profit rebounds

Real estate firm’s net income jumps 11.5% in third quarter

National /
Oct.October 27, 2020 04:28 PM
Colliers’ Jay Hennick (iStock; Colliers)

Colliers’ Jay Hennick (iStock; Colliers)

Colliers International reported an 11.5 percent jump in net income during the third quarter, despite a pandemic that has significantly slowed commercial real estate activity.

The real estate firm reported a profit of $32 million, up from $28.7 million in the same period last year, according to its third-quarter earnings report. It was also a significant improvement from the second quarter, when net income was just $6.5 million.

That increase came despite third-quarter revenue dropping by 6 percent over the same period in 2019, to $692.3 million, because of a decline in leasing and investment sales.

The company made $169.7 million from leasing, down 22 percent from 2019. Its revenue from capital markets was $165.6 million, down 17 percent.

“While uncertainties persist, we expect our full-year results to come in stronger than anticipated,” said Jay Hennick, global chairman and CEO, during a conference call with analysts.

A key factor in the income spike is the firm’s growing “recurring services” sector, which now accounts for 60 percent of its earnings, according to Hennick. In recent years, the company has added services including engineering (via Maser Consulting, which it acquired this year) and mortgage processing to its portfolio.

But Hennick emphasized that the firm will not abandon its traditional commercial real estate brokerage services. “There’s nothing wrong with traditional capital markets and leasing,” he said.

“Transaction volumes may be down, but they will be back, and they’ll be back strongly as the economy stabilizes,” the CEO added. “These are essential services that are needed and required by real estate owners and occupiers everywhere.”

The uptick in net income was also the result of cost-cutting, such as furloughing employees, 6 percent of whom are still not working, Hennick said. Total cost savings will amount to about $150 million this year, said Christian Mayer, Colliers’ chief financial officer.

The stock market reacted positively to the results: Colliers’ shares rose from $63.73 Monday to around $72 on Tuesday.





    Related Articles

    arrow_forward_ios
    Thor Equities Group Chairman Joseph J. Sitt. (Thor)
    Thor facing foreclosure on Harlem rental building
    Thor facing foreclosure on Harlem rental building
    Photo illustration of Vornado CEO Steven Roth and Hotel Pennsylvania at 401 Seventh Avenue (Getty, iStock, Vornado)
    “Inevitable”: Vornado will demolish Hotel Pennsylvania
    “Inevitable”: Vornado will demolish Hotel Pennsylvania
    The rate of loans sent to special servicers continued to fall in March. (Unsplash)
    CMBS special servicing rate declines in March
    CMBS special servicing rate declines in March
    JLL CEO Christian Ulbrich. (Getty)
    JLL explores sale of China property management wing
    JLL explores sale of China property management wing
    Dollar General CEO Todd Vasos (Retail Industry Leaders Association, iStock)
    Dollar General thrives amid retail apocalypse
    Dollar General thrives amid retail apocalypse
    Bill Lee (Lee & Associates/YouTube)
    Lee & Associates founder Bill Lee dies
    Lee & Associates founder Bill Lee dies
    The vacancy rate for regional and superregional malls is at an all-time high.  (Getty)
    Mall vacancy rate hits all-time high
    Mall vacancy rate hits all-time high
    Rudin Management’s Michael Rudin and Industrious’ Justin Stewart with 32 Sixth Avenue in Tribeca (Rudin, Industrious, Google Maps)
    Rudin teams up with Industrious for flex-office play
    Rudin teams up with Industrious for flex-office play
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...