Spike in investment sales pushes Colliers’ quarterly revenue above $1B
Office leasing “within 5% of 2019 level,” though earnings dipped amid run of acquisitions, mounting expenses
A run of acquisitions and a booming market for industrial and multifamily assets helped push quarterly revenues at Colliers International above $1 billion for the first time.
The revenue spike was aided by $310.7 million from its capital markets business, up 17 percent from the second quarter and 55 percent from the third quarter of 2019, before the pandemic.
Revenue also benefited from an acquisition-fueled expansion of the firm’s non-transactional businesses, such as loan servicing, engineering and design consulting.
“We have a highly diversified business model, diversified by revenue, by clients, by asset class, and by geography,” said Jay Hennick, Colliers’ chairman and CEO, during the firm’s earnings call Tuesday. “We’re also more resilient than ever, with more than 50 percent of our revenues coming from higher-value, recurring revenue streams.”
Colliers’ top line began to bounce back from its pandemic downturn in the second quarter — with the exception of office leasing, which remained depressed. At the time, Hennick told analysts that not many leases were signed because office tenants were still determining how and when to bring back their employees. But leasing activities finally ticked up in the third quarter, the company said.
Total leasing revenue for the quarter was $242.9 million, up 17 percent from the second quarter and 11 percent from the third quarter of 2019. Revenue from office leasing has recovered to “within 5 percent of 2019 level,” Hennick said.
While its revenues soared, Colliers’ bottom-line took a hit.
The firm’s adjusted EBITDA in the third quarter was $124 million, down 9.5 percent from the prior quarter. Chief financial officer Christian Mayer attributed the gap to performance-based compensation along with various costs to support increased transaction activities.
A day before the earnings call, Colliers finalized a deal to acquire Bergmann, a national architecture, engineering and planning firm, for an undisclosed sum. The deal followed Colliers’ 2020 acquisitions of Dougherty, whose subsidiaries provide loan servicing and mortgage lending, and Maser Consulting, an engineering and design consulting firm.
The shopping spree isn’t over. Colliers is in contract to acquire a controlling interest in Antirion, an Italian-based real estate investment management firm with assets throughout Western Europe. The deal is expected to close in the first quarter of next year.