Good morning, everyone, and welcome to CBRE's second quarter 2026 earnings conference call. Earlier today, we posted a presentation deck on our website that you can use to follow along with our prepared remarks and an Excel file that contains additional supplemental materials.

Today's presentation contains forward-looking statements, including without limitation statements concerning our business outlook, business plans, capital allocation strategy, as well as our earnings and free cash flow outlook. These statements involve risks and uncertainties that may cause actual results and trends to differ materially.

For a full discussion of the risks and other factors that may impact these statements, please refer to this morning's earnings release and our other SEC filings. We've provided reconciliations of our non-GAAP financial measures discussed on our call to the most directly comparable GAAP measures, together with explanations of these measures, in our presentation deck appendix.

Throughout our remarks, when we cite financial performance relative to expectations, we are referring to actual results against the outlook we provided on our first quarter 2026 earnings call in April, unless otherwise noted. All the growth rates we cite are in U.S.

dollars, unless otherwise noted, and reflect an FX tailwind of 1% to 2%. Also, as a reminder, our resilient businesses include facilities management, critical infrastructure services, property management, project management, loan servicing, valuations, other portfolio services, and recurring investment management fees.

Our transactional businesses are comprised of property sales, leasing, mortgage origination, carried interest and incentive fee in the investment management business, and development fee. I'm joined on today's call by Bob Sulentic, our Chair and CEO, and Emma Giamartino, our Chief Financial Officer.

Now please turn to slide 3 as I turn the call over to Bob.

Thank you, Chandni, and good morning, everyone. The momentum in CBRE's business continued in the second quarter with core EPS up 30% on a 16% revenue increase.

Our strength was balanced across the company. Each of our segments: Advisory, Building Operations & Experience, Project Management, and REI, grew SOP by more than 25%.

Our strategy is working the way we intended. Resources and investments are being productively directed into areas that drive current growth and position us for long-term growth.

Directly related to this positioning, over the last several months, we've received many questions from investors about our infrastructure and data center services businesses. Those businesses are performing well, and they provide an excellent forward-looking opportunity.

Infrastructure services revenue reached nearly $1.2 billion in the second quarter, increasing by more than 45%. Within infrastructure services, data center services revenue surpassed $700 million, rising nearly 30%.

This revenue is strictly from the provision of services and does not include any data center development land sales. The work we do includes the build-out of data centers as well as ongoing maintenance and operational oversight.

During this period of significant AI investment, we expect our data center services revenue to remain elevated at about 25% annually for the next 5 years and then above 15% as the build cycle matures. Given the momentum in our entire business and specifically our infrastructure business, we have increased our core EPS expectations for 2026.

We now expect to earn in the range of $7.80 to $7.90, equating to 23% growth at the midpoint. Now Emma will discuss our outlook and results for the quarter in more detail.

Emma?

Thank you, Bob, and good morning, everyone. CBRE's strong second quarter saw revenue increase by 16%, as both resilient and transactional businesses delivered double-digit growth.

Results exceeded our expectations, with core EBITDA up 34% and core EPS up 30%. This is the fifth consecutive quarter that we achieved at least 18% core EPS growth.

In Advisory Services, revenue rose 18% and exceeded our expectations, driven by accelerated growth in leasing and continued strength in sales. Global leasing revenue grew 24%, with strength across office and industrial.

In the U.S., leasing also grew 24%, led by office up 29% and industrial up 17%. We generated our highest U.S.

office leasing revenue for any second quarter, driven by large deals in gateway markets. We've seen notable strength across the legal and financial services sectors, as tenants are upgrading and expanding their space.

U.S. industrial leasing growth was led by Los Angeles, San Francisco, Washington, D.C., and Chicago, reflecting increased demand from 3PL providers and companies engaged in advanced manufacturing.

Outside the U.S., leasing grew 27% in EMEA, led by France, Germany, and Spain, and 19% in APAC, with notable strength in Australia and India. Global property sales revenue grew 20%, led by the U.S., which grew 24% with double-digit increases across most major property types.

Outside the U.S., sales grew 8% in EMEA and 6% in APAC. Mortgage origination revenue grew 8%, with strong volume from private capital sources partly offset by lower agency lending activity.

Advisory SOP grew 29%, reflecting strong operating leverage. We delivered strong double-digit revenue growth in our Building Operations & Experience segment.

Growth was led by critical infrastructure services, where revenue increased 68%. Our Data Center Solutions business grew nearly 30%, benefiting from both significant hyperscaler demand and the depth and breadth of our capabilities.

Contributions from the Pierce Services business we acquired last November enhanced the growth rate. Our Local Facilities Management business once again delivered strong high-teens revenue growth across all regions, particularly in the Americas, up almost 35%.

Enterprise facilities management revenue growth was led by the technology, media, and telecom sectors. BOE SOP grew 25%.

In our Project Management segment, revenue grew 19%, underpinned by solid infrastructure activity, which increased 30%, while real estate related services grew 13%. Infrastructure saw strength across transportation and utility projects in the UK, Europe, and the Middle East.

Real estate saw greater than 20% growth in North America and strong double-digit growth in Asia. Across all regions, hyperscaler and technology clients drove significant activity.

SOP grew 28%, with notable operating leverage, which we expect to moderate in the back half of the year given the timing of costs. Turning to the Real Estate Investments segment, development operating profit exceeded the prior year, in line with our expectations and without the benefit of any data center land sales.

We continued to have embedded gains of approximately $900 million in our development portfolio. In Investment Management, operating profit was up modestly, and we ended the quarter with approximately $155 billion of AUM.

We raised $1.6 billion of new capital in the quarter, up from $1.3 billion in the first quarter, but below our expectations. Some investors, particularly capital from the Middle East, remained cautious given the volatile global backdrop.

Now I'll turn to free cash flow and capital allocation. Free cash flow totaled nearly $1.7 billion on a trailing 12-month basis.

For the full year, we remain on track to achieve near the high end of our free cash flow conversion range of 75% to 85%. Since the end of the first quarter, we have bought back more than $450 million worth of shares, bringing our year-to-date total to nearly $1 billion.

This level of buyback activity underscores our conviction that our stock price meaningfully undervalues the enduring long-term growth we see ahead for the business. As Bob indicated, we now expect full-year core EPS of $7.80 to $7.90, up from $7.60 to $7.80 previously.

The increase is driven by our outperformance in the second quarter and improved expectations for the balance of the year. We now foresee more than 20% core EPS growth in the third quarter, with the fourth quarter likely to be comparable to last year, when we also realized significant profits from our data center land program.

Assuming no material changes to the macroeconomic or interest rate environment, we remain confident in delivering at least a 15% increase in core EPS in 2027. With that, operator, we will open the lines for questions.

Thanks. Good morning.

My first question relates to just capital priorities and the second half of the year and what's in guidance, just given the heavy cash flow production later in the year, kind of what do you have baked in for buybacks or other activities?

Our capital allocation priorities remain unchanged from where we've been for the past number of years. We continue to prioritize M&A, and as we've talked about, we have a really strong pipeline across the areas where we know we want to invest.

It is difficult to project which M&A targets we'll be able to convert, and then we'll fill in with buybacks if we don't deploy that level of free cash flow that we generate through M&A. In terms of the back half of the year, there is not significant incremental capital allocation included in our guidance.

Got it. Then just on BOE, can you maybe update us on your thinking as it relates to margins in that business for the year?

Because I think you started the year out pointing to being more flat, but it seems like it's improved quite a bit here in the second quarter. Yeah.

We did make a change to how we classify amortization related to our fleet in that segment, and so without that change, the margin for the year will improve by 20 basis points or so, but the rest of that margin improvement is related to that reclass.

Got it. Thank you.

Hey, good morning. Thanks.

On the leasing side, another very strong quarter there, and that's now been true for the last 2-plus years. Do you think leasing activity there has effectively normalized now after the pandemic, where leasing growth looking forward would be more in line with an average seen throughout the macro cycle, or is there still room for above-cycle growth, just as pent-up demand on the leasing side continues to come through?

I guess just how are you thinking about it over the next couple years?

Stephen, I think there has been a return to the norm. I think COVID is so far in the rearview mirror now that you see it in office buildings, you see it in restaurants, you see it in everything.

There is real return to the norm. Secondly, people really are focused on what office space can do for their businesses, for the productivity of their businesses, exciting their employees about being part of the company, getting their young people educated and brought into the business.

That's a very real thing. It's a real thing for us.

We have a lot of office space around the world, and we think about that a lot, and we know our big occupier clients are thinking about that a lot, and they're competing with each other to try to have the kind of space that allows them to get those things done. I think it's going to be somewhere between a return to the norm and maybe more than that.

I'll give you one anecdote. With all the talk about the various parts of our economy that might get disintermediated by AI, one of the areas is the legal profession, law firms.

We're having tremendous leasing success with law firms now, kind of unlike we ever had before. It is because they recognize the importance of office space to their business, and it also is because they're using AI for certain things and then doing other things with their talent, that's causing their head count not to go down the way some people think it might.

Got it. That's helpful and makes sense.

Then just as a follow-up, Bob, really encouraging commentary on the data center revenue growth outlook. As you think about CBRE's opportunity to continuing to support the data center build-out, where do you see the biggest opportunities by business line, I guess to drive the 25% annual revenue growth that you talked about expecting over the next 5 years?

Are there certain business lines where there's a huge opportunity, you're not doing much yet, there's a big opportunity for activity to pick up, and just yeah, maybe where are you seeing those opportunities?

It's become big for us. Infrastructure was $1.2 billion of revenue in the quarter.

$700 million of that was data centers. We think by the year 2030, we could have a $10 billion business with over a billion dollars of EBITDA related to infrastructure.

The disproportionate share of that would be in data centers, certainly not exclusively in data centers. Where we're really seeing it, the opportunity in the current activity is in two places.

It's in our project management and program management business with Turner & Townsend. By the way, they've been growing their data center related business at over 30% for a decade now.

Then the second place we're seeing it is Building Operations & Experience. We're helping create data centers in support of the boom that AI is generating, but over half of our data center revenue is from downstream work: managing them, refitting them, doing project work in data centers.

We expect to see a lot of growth in both those areas of our business in the BOE area and in the projects business.

Good to hear. Thank you.

Thank you. Thank you for the question and congratulations on the strong quarter.

I wanted to maybe dig into Project Management a little bit more, very impressive quarter, both top line and bottom line. Sounds like maybe that will flow with expenses a little bit in the back half, but I guess could you talk about how we should think about the sort of the projects that go into that?

Sounds like it's a lot of infrastructure projects. I think of those as sort of longer dated Turner & Townsend projects, and so is it right to think that much of this strength could carry into sort of the future quarters?

Julien, we're very very excited about the future for Turner & Townsend and the project management and program management business that they participate in. One thing to realize about them is they were really dominant in Europe, Middle East, significant in Asia, significant in Australia.

By combining with us, they've been able to significantly escalate their activity in Japan, in India, and especially in the U.S. Just the geographic positioning of that business has improved dramatically.

I've commented on this over and over, the leadership team of Turner & Townsend, the tools and capabilities they bring to the table just hasn't existed in our sector before. Where do we think the real opportunity will be with them?

It will be in big infrastructure projects, big energy projects. It will be in doing more of that in particular here in the U.S.

Emma tells the M&A story every quarter. We have specific areas of our business we want to grow with M&A.

We've got some ideas around Turner & Townsend that we want to make happen there if we can find the right deals. We think that you should expect lots of growth in the U.S.

and in infrastructure and in energy, etc., from Turner & Townsend. They also do a tremendous amount of corporate work.

With Turner & Townsend as part of our business now, we're doing big, complicated projects for corporates that we weren't able to do before. That'll be another area of growth.

Thank you. No, that's very helpful.

Then on the land site sales, Emma, it sounds like you have a number of these earmarked to be sold in the third quarter. Just wondering, beyond the ones that are sort of earmarked here, how many will you have left in your land bank for potential future monetization?

We still have about 30 sites across the U.S. in our land bank.

They're of varying sizes, and it's very difficult to time when they'll potentially monetize, but we still have 30 sites.

Great. Thank you.

Thank you very much. In terms of the 2027 commentary for EPS growth of at least 15%, is it reasonable to expect double-digit revenue growth?

Are there any key areas of operating leverage you'd like to highlight?

If you go through our segments, we're looking at low-double-digit SOP growth across both BOE and Project Management, and that does include some operating leverage, but revenue growth is going to be in line with that low-double-digit growth. Then Advisory, as you'd expect, will moderate somewhat from this year, but it's not going to be anywhere near mid-cycle growth levels.

Then what we're expecting for REI is that it will be roughly flat to what we're expecting for this year's SOP, which we're expecting to be very strong. Some operating leverage across our segments, but not a tremendous amount.

Thank you very much. Turning to the AI theme, was wondering if you could comment on whether you see any risk of unbundling of services within property and facilities management.

Also, could you parse out your views on the smaller-size deals in the market, and if you see that as an area of potential risk?

When you say Jade, unbundling, give us a little more on what you're commenting on there.

The thesis around outsourcing has been institutionalization, CBRE being a one-stop shop, and so within that, there's basic facilities and property management, but there's many other services that are provided to occupiers, a full suite of services, and so does AI give them potentially the capacity to shrink the scope of certain outsourcing projects?

The outsourcing work that we do for occupiers centers around three big things: facilities management, project management, and transactions, or leasing. All of those areas of our business, and I'm going to start with transactions, the three big areas that we're introducing AI into our product mix are with transactions, leasing in particular, and now we're using agenic AI to collect and assimilate data in a way that we can help, for instance, our occupier clients predict where their portfolio should go and benchmark them against others in the market.

We have a whole protocol that we're putting in place in our project management business to span the life cycle of projects related to budget, schedule, and risk that's going to give our clients much greater insight into how projects go. It's going to get them much greater confidence in when to kick off big projects and how to correct course on big projects when they get off course on any of those three areas.

Then in facilities management, we're using it for some very basic things, the kind of the back-office work to make it more efficient, but we're also using it for predictive maintenance on the buildings that we manage. We're also using it to help move our mobile engineers around and schedule those engineers, etc.

We think it's going to help all of the products that we offer to our occupier clients in that traditional outsourcing sense. It's actually the areas where we're going to use it most, and we don't think that any of those things that we do are positioned to be, I guess when you say disintermediated or separated, pulled away from us because our clients would do it instead of having us do it.

There's a significant labor involved in all of that work, and we think we will have tools on a overall platform that the clients themselves won't have.

Thank you very much.

Thanks. Good morning.

Bob, I know that the interest rate environment hasn't been as cooperative as everybody had hoped for at the beginning of the year, but yet you still put up pretty good growth in the transaction business. I'm just curious what kind of you're seeing, what the pipeline looks like, and is there any sort of concern about just funding in debt markets and how that business kind of moves forward?

There is concern that interest rates will go up, and what's going on in the Middle East causes that, but a few things as it relates to our business and the market in general, Steve. Number one, and we've said this over the last couple years quite a bit, that's a big, important business for us, but the double-digit growth trajectory of our business doesn't depend on strong capital markets and large sales volumes and large origination volumes.

It's really important, and things will go even better if that happens, but the growth trajectory of our business and the strategy that underpins our business is not tied to that. Secondly, what we saw in the quarter was lots of uncertainty around debt and the cost of debt, and some things happened.

A big part of our profit stream in the origination business comes from the agencies. We did not have a strong quarter at all with the agencies, but yet we had still a very strong quarter overall in capital markets and in debt origination.

What we saw in the market was the bid-ask spread had come down and was closer than it had been in years, and there are people out there, again, we've talked about this quarter after quarter, there's people out there with assets that they want to sell, and there's people out there with a lot of money to invest in assets. The choppiness in the debt markets didn't keep them on the sidelines.

We don't know how that will unfold going forward, but we think we'll continue to see pretty strong sales for the rest of the year, and we think we'll see pretty strong debt origination for the rest of the year, but it may come down if interest rates go up or if the volatility gets to be too great.

Thanks. Maybe, Emma, just as a follow-up to Tony's early question on kind of capital deployment, if I'm looking at the cash flow statement right, between buybacks and acquisitions, I think you've invested close to $1.3 billion in the first half of the year, and given that you sort of generate that $1.7 billion of free cash flow, is it fair to then assume that kind of buyback activity would likely taper off quite significantly, or if the stock remains at sort of these levels, you would lean in and even I guess invest more than the free cash flow of a billion 7?

Our goal is not to deploy more than we generate free cash flow in buybacks. Yes, it's safe to assume that the buybacks will taper off.

Great. Thank you.

Great. Just thinking back to the presentation that you guys had in June, I think you talked about 30% of revenues from Fortune 100 companies.

When you sort of take a step back and you guys think about sort of your penetration rate and your opportunity set, not just across these Fortune 100 companies, but just broadly, just where do you think you are in that cycle, in that inning? How much more sort of white space is there for CBRE?

Thanks.

Yeah. We do a lot for the world's biggest companies, and it's just very clear in our results and what we're seeing day-to-day that there's a skewing of that opportunity toward anything related to data centers and infrastructure.

There's all kinds of work going on with various military-related companies, and so on and so forth. Those are very large companies.

Obviously, the hyperscalers are the biggest companies in the world, and all of those types of companies are offering up bigger and bigger opportunity than we've ever seen from them before, and all of those companies like to interface with companies that have substantial scale. Our scale helps us with those companies.

Our ability to invest helps us with those companies. Our global footprint.

I don't think I've ever remember us being involved in any area of our business where the revenue synergies were as great as they are in the data center business. If you do data center work for a company in one area, the odds of getting work from them in other areas, other types of services or other geographies, are as high as I've ever seen in terms of revenue synergies.

Our future is going to be skewed toward big companies, and that opportunity for us is substantial.

Great. Just my follow-up, I think some of the numbers suggest we're in the sweet spot of the real estate cycle, and you've sort of talked about 2027 growth, core EPS growth, and my question is really just on visibility, right?

What are you guys looking at, whether it's contracts or pipelines? Sort of what gives you sort of confidence in that visibility, call it 12 to 18 months out, to have that target out there?

Thanks.

Across our BOE and Project Management business, we have strong visibility. That low-double-digit growth on SOPs that I talked about across both of those segments is in line with, if not slightly below, what those businesses have delivered consistently over the past number of years on an organic basis, and so we have high confidence that that will continue.

Then within Advisory, we do believe that there is more room. Bob was talking about it earlier, but on the leasing side, we're still not back to 2019 levels.

We see there's more room to go this year, and that will extend into next year. On the sales side, we're still pretty early.

We've seen strong growth, but not near the levels of growth that we've seen coming out of other recoveries. We have a high level of confidence that we'll be able to deliver 15% growth next year.

Thank you.

Great. Thanks for taking my questions.

Do you anticipate any impacts on your data center business from the growing NIMBYism that we're seeing in the market? Is there anything that CBRE can do either in conjunction or on behalf of your clients to mitigate concerns among local governments and local residents?

There's all kinds of things that are challenging the growth of the data center business relative to the demand for that growth. There's the NIMBYism, there's water issues, which are tied to the NIMBYism, there's power issues, which are tied to the NIMBYism.

There's challenges all over with regard to the supply chain. For the kind of work we do, there's challenges.

Hard to hire the people you need to hire to do the work we do. Obviously, all the equipment that goes into data centers, etc.

There's challenges everywhere with regard to growing the base of data centers in the world. There's enormous demand, and there will be, even in light of those challenges, there'll be considerable growth in the number of data centers and the size of the data centers out there.

We're convinced of that. They'll have to move to areas that allow them to get that done, the supply chains will have to adjust, etc.

Yes, there's all kinds of pressures when anything becomes that big and rapidly changing and uses up resources the way data centers use up resources, there's going to be challenges, but we expect a very, very substantial, sustained opportunity in the creation of data centers and an even bigger long-term opportunity in the downstream work we do in data centers.

Great. Thanks, Bob.

For my follow-up on the local facilities management growth, I think it was in the high teens, it seemed to pace enterprise growth. Can you just discuss what was behind those dynamics this quarter?

Local, that business has consistently outpaced enterprise, and we expect that to continue. A major driver is the expansion of our local business into new markets.

For example, we really just started entering the U.S., 5 years ago or so, maybe a little bit before that, and within the U.S., we've been growing that business at 20% to 30% very consistently, and we expect that to continue. Even in the more mature markets where our local business is, within the UK, that's growing at a low-teens rate.

There is a lot of growth within that business.

Great. Thank you very much.

Thanks, everyone, for being with us, and we'll talk to you again when we report our third quarter results.