Flush with cash, CBRE is ready to spend

Blowing past pre-pandemic earnings, firm eyes more deals like its $1.3B Turner & Townsend investment

National /
Jul.July 29, 2021 12:50 PM
CBRE's Emma Giamartino and Bob Sulentic (CBRE, iStock)

CBRE’s Emma Giamartino and Bob Sulentic (CBRE, iStock)

Expect more blockbuster deals from CBRE on the heels of its $1.3 billion investment in global project manager Turner & Townsend.

“​​We still have a very strong M&A pipeline. I think we’re going to look to do more deals like Turner & Townsend,” said newly promoted chief financial officer Emma Giamartino on CBRE’s second-quarter earnings call Thursday.

The world’s largest real estate services firm is sitting on a pile of money it’s looking to put into action. The company has about $2 billion in cash and another $2.8 billion in credit facilities that can be used to diversify its business through acquisitions.

In February, the firm spent about $200 million for a 35 percent stake in the flex-office operator Industrious, and earlier this month, a CBRE-created SPAC announced plans to merge with the solar-power builder Altus Power in a deal valuing the latter company at $1.58 billion.

CBRE’s purchase of a 60 percent stake in Turner & Townsend, company executives explained, fits in with its strategy of diversifying into areas like infrastructure and green energy.

Giamartino said that in addition to large M&A deals, CBRE is evaluating a pipeline of smaller, infill acquisitions to bolt onto the brokerage. She said the company would not try to force any purchases, and if it can’t find the right targets, the firm will opt to return cash to shareholders through stock buybacks.

But the message is clear: CBRE has deep pockets and it’s looking to spend. Giamartino’s promotion further drives home that point, as her new position consolidates CBRE’s finance and investment activities into one role.

As for CBRE’s quarterly performance, the company not only blew past its earnings from last year, but posted strong growth over the same period in 2019.

Adjusted EBITDA for the quarter totaled $718 million, an increase of nearly 169 percent over the second quarter last year and up more than 50 percent from the $468 million in EBITDA recorded in the second quarter of 2019.

CEO Bob Sulentic said the growth was driven by strong performance in investment sales and originating mortgages, while revenue from office leasing continued to lag.

He said the unpredictability surrounding employers’ return-to-office timelines is delaying leasing activity.

“It’s what it has been,” he said. “There’s real uncertainty about how and when companies will go back to the office post-Covid. And as long as that overhang is out there decisions will be made more slowly than they have been historically.”





    Related Articles

    arrow_forward_ios
    The Centre at Purchase at 1, 2, 3, 4 Manhattanville Road with George Comfort & Sons CEO Peter Duncan (George Comfort & Sons)
    Westchester office park owned by George Comfort & Sons slated for auction
    Westchester office park owned by George Comfort & Sons slated for auction
    Attorney General Letitia James and A&E Real Estate CEO James Patchett (Getty, iStock)
    A&E pays just $510K in lead-paint settlement
    A&E pays just $510K in lead-paint settlement
    Seeding from recapitalization of 25 health care properties
    KKR, Cornerstone in $1B JV to develop health care facilities
    KKR, Cornerstone in $1B JV to develop health care facilities
    The Broadway location of Halloween Adventure (Facebook via New York Costumes / Halloween Adventure)
    Halloween Adventure to vacate East Village home as retail condo hits market
    Halloween Adventure to vacate East Village home as retail condo hits market
    Bluerock Residential CEO Robert Ramin Kamfar (Owler)
    NY-based multifamily REIT Bluerock explores sale
    NY-based multifamily REIT Bluerock explores sale
    Two more rent law challenges tossed, landlords reserve hope in appeal
    Two more rent law challenges tossed, landlords rest hopes on appeal
    Two more rent law challenges tossed, landlords rest hopes on appeal
    Purchases across the country rose 0.7 percent in August, easily outpacing estimates by retail analysts. (iStock)
    Big month for retail sales bodes well for landlords
    Big month for retail sales bodes well for landlords
    A rendering of River Ring with Two Trees CEO Jed Walentas (BIG, Getty)
    CB1 approves Two Trees’ River Ring, keeping project on pace
    CB1 approves Two Trees’ River Ring, keeping project on pace
    arrow_forward_ios

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

    Loading...