![]() ![]() The company expects more of its income stream in the leasing business to increasingly come from industrial relative to office. This is another important headwind for CBRE, as a little over 50% of its leasing comes from the office sector, even if that is down from ~70% in the past. On the other hand, office remains extremely challenged, and the CBRE believes occupancy will not come close to pre-pandemic levels anytime soon. The company shared that multi-family and industrial fundamentals remain strong, but with occupancy declining slightly from peak levels and rent growth moderating. Given the size and reach of CBRE in the real estate industry, it is very interesting to hear from them how the different property types are performing. CBRE estimates that roughly 45% of its core EBITDA comes from resilient business segments, which helped offset a larger-than-expected decline in transactional revenue. In terms of asset classes, logistics performed very well. These businesses are mostly focused on outsourcing services and include things like project management and facilities management. One of the key things mentioned during the company's earnings call was that the cyclically resilient business segment performed particularly well. CBRE stock also managed to deliver a ~75% free cash flow conversion. ![]() ![]() Looking at the whole year, things are not as bad, with full year core EPS growing ~7% to $5.69, net revenue up ~10%, and Core EBITDA slightly higher. Despite these headwinds, the company was able to slightly exceed expectations thanks to strength in the Advisory and Global Workplace Solutions segments. These headwinds include a weakening economy, rising interest rates, market declines, and constrained credit availability. Still, given the headwinds, things could have been much worse. Revenue was down ~4%, net revenue decreased ~11%, core EBITDA came in ~30% lower, GAAP EPS suffered a ~88% decline, and core EPS was ~26% lower. In fact, most of the key business indicators were down in the fourth quarter. In Q4, core EPS was $1.33 which represents a ~26% year-over-year decline. The real estate is suffering multiple headwinds, and that was reflected in CBRE Group, Inc.'s ( NYSE: CBRE) FY2022 results, and particularly in the results of its fourth quarter. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |