CBRE Group, Inc. (CBRE): history, ownership, mission, how it works & makes money

A Brief History of CBRE Group, Inc.

CBRE Group, Inc. has established itself as a leader in the commercial real estate services sector. As of 2024, the company reported a total revenue of $9.036 billion for the third quarter, marking an increase of 14.8% compared to $7.868 billion in Q3 2023. For the nine months ended September 30, 2024, total revenue reached $25.363 billion, up from $22.999 billion in the same period of the previous year.

Financial Performance

For the three months ended September 30, 2024, CBRE's net income attributable to stockholders was $225 million, a 17.8% increase from $191 million in Q3 2023. The basic income per share rose to $0.73 from $0.62 year-over-year. For the nine-month period, net income attributable to stockholders was $481 million, down slightly from $509 million in 2023.

Operating Expenses

Operating expenses for the three months ended September 30, 2024, totaled $8.667 billion, up from $7.604 billion in the same quarter of 2023. The increase was primarily driven by higher costs associated with employee compensation and restructuring expenses. The cost of revenue represented 90.1% of total revenue, slightly down from 90.3% in Q3 2023.

Debt and Financing

As of September 30, 2024, CBRE's long-term debt amounted to $3.325 billion, which includes senior term loans and various senior notes. The company reported an interest expense of $64 million for Q3 2024, up from $38 million in Q3 2023. The effective interest rate on the company’s borrowings was approximately 5.3% as of the end of the reporting period.

Market Presence and Strategic Initiatives

CBRE continues to expand its global footprint with significant operations in over 100 countries. The company’s focus on technology integration and digital transformation has positioned it competitively within the real estate services sector. Recent acquisitions, including J&J Worldwide Services and Direct Line Global, have contributed to revenue growth and enhanced service offerings.

As of September 30, 2024, CBRE reported total assets of $1.747 billion, with total liabilities at $4.401 billion, reflecting a leverage ratio that remains within its targeted range. The company’s strategic initiatives aim to bolster its investment management capabilities and enhance operational efficiencies across its service lines.

Conclusion

CBRE Group, Inc. continues to demonstrate resilience and growth in a competitive market. The company’s financial performance, strategic acquisitions, and commitment to innovation are expected to drive future success as it leverages its global presence and expertise in commercial real estate services.

A Who Owns CBRE Group, Inc. (CBRE)

Major Shareholders

As of 2024, the ownership structure of CBRE Group, Inc. primarily comprises institutional investors, mutual funds, and individual shareholders. The following table outlines the major shareholders and their respective ownership percentages:

Executive Ownership

Executive officers and directors also hold significant shares in CBRE. As of September 30, 2024, the following table highlights the ownership of key executives:

Non-controlling Interests

CBRE Group, Inc. has reported non-controlling interests in various subsidiaries, which as of September 30, 2024, amounted to approximately $864 million. The detailed breakdown is as follows:

Recent Stock Performance and Buybacks

In 2024, CBRE initiated a stock repurchase program, authorizing up to $4 billion. As of September 30, 2024, the company had repurchased approximately $110 million worth of shares. The stock performance is summarized below:

Conclusion on Ownership Structure

CBRE Group, Inc. exhibits a diverse ownership structure with significant institutional holdings, executive ownership, and active stock buyback initiatives. The company has shown resilience in its financial performance, further solidifying its position in the real estate services industry.

CBRE Group, Inc. (CBRE) Mission Statement

Overview of Mission Statement

CBRE Group, Inc. (CBRE) focuses on delivering exceptional real estate services and solutions, leveraging innovative technology and deep market insights to drive value for clients globally. The company aims to create a more sustainable and resilient future through its operations, emphasizing integrity, collaboration, and excellence in service delivery.

Financial Performance

As of September 30, 2024, CBRE reported significant financial results, with consolidated net income of $225 million, reflecting a 17.8% increase from $191 million in the same period of 2023. The revenue for the third quarter of 2024 was $9.0 billion, a 14.8% increase year-over-year.

Segment Performance

CBRE operates through three main segments: Advisory Services, Global Workplace Solutions (GWS), and Real Estate Investments. The revenue and operating profit for each segment as of September 30, 2024, are detailed below:

Investment and Growth Strategies

CBRE's strategic initiatives include a focus on sustainability and technological innovation. The company has invested in various technology platforms to enhance operational efficiency and improve client service. As of September 30, 2024, the company has made acquisitions totaling approximately $295 million in cash and non-cash consideration for six in-fill business acquisitions.

Global Operations and Market Presence

CBRE operates in over 100 countries and employs more than 105,000 professionals worldwide, providing comprehensive real estate solutions. Approximately 42.3% of the company's revenue was transacted in foreign currencies during the third quarter of 2024.

Corporate Social Responsibility

CBRE is committed to corporate social responsibility by focusing on sustainability initiatives, reducing carbon emissions, and enhancing community engagement. The company aims to lead the industry in creating sustainable solutions for clients and stakeholders.

Conclusion on Mission Statement Alignment

CBRE's mission statement aligns with its operational strategies, emphasizing client value, innovation, and sustainability. The company continues to adapt to market changes and client needs, ensuring it remains a leader in the global real estate services market.

How CBRE Group, Inc. (CBRE) Works

Business Segments

CBRE Group, Inc. operates primarily through three business segments: Advisory Services, Global Workplace Solutions (GWS), and Real Estate Investments (REI).

Advisory Services

The Advisory Services segment includes property leasing and sales, property management, valuation, and mortgage origination services. For the three months ended September 30, 2024, revenue from Advisory Services was:

Global Workplace Solutions (GWS)

The GWS segment provides integrated facilities management and project management services. For the three months ended September 30, 2024, GWS generated:

Real Estate Investments (REI)

The REI segment focuses on investment management and development services. For the three months ended September 30, 2024, REI contributed:

Financial Performance

For the three months ended September 30, 2024, CBRE reported:

• Consolidated revenue of $9.0 billion, an increase of 14.8% from $7.9 billion in the same period of 2023.
• Net income of $245 million, representing a 17.8% increase compared to $201 million in Q3 2023.
• Core EBITDA of $688 million, up from $436 million year-over-year.

Expenses and Profitability

The cost of revenue increased by 13.4% to $7.2 billion in Q3 2024, leading to an operating income of:

Debt and Liquidity

As of September 30, 2024, CBRE's long-term debt totaled:

CBRE maintains a revolving credit facility with $3.0 billion available as of September 30, 2024.

Cash Flow Overview

For the nine months ended September 30, 2024:

• Net cash provided by operating activities was $368 million.
• Net cash used in investing activities totaled $1.494 billion.
• Net cash provided by financing activities was $927 million.

Stock Repurchase Program

As of September 30, 2024, CBRE had approximately $1.4 billion remaining under its stock repurchase program, which authorized the buyback of up to $4.0 billion of its common stock since November 2021. In Q3 2024, CBRE repurchased 567,209 shares for $62 million.

How CBRE Group, Inc. (CBRE) Makes Money

Revenue Streams

CBRE Group, Inc. generates revenue through several key segments:

• Advisory Services
• Global Workplace Solutions (GWS)
• Real Estate Investments (REI)

Advisory Services

In the third quarter of 2024, the Advisory Services segment reported revenues of $2.395 billion, up from $2.013 billion in Q3 2023. For the nine months ended September 30, 2024, total revenue from this segment reached $6.518 billion, compared to $5.908 billion in the same period last year.

Key components of Advisory Services revenue include:

Global Workplace Solutions (GWS)

For Q3 2024, the GWS segment generated $6.346 billion in revenue, compared to $5.649 billion in Q3 2023. Over the nine-month period, GWS revenue increased to $18.099 billion from $16.413 billion in the previous year.

Key drivers of GWS revenue include:

• Facilities Management
• Project Management

Real Estate Investments (REI)

The REI segment recorded revenue of $302 million in Q3 2024, a significant increase from $210 million in Q3 2023. For the nine months ended September 30, 2024, REI revenue totaled $762 million, compared to $690 million in the same period of 2023.

Revenue sources in REI include:

• Investment Management
• Development Services

Financial Performance

For the nine months ended September 30, 2024, CBRE reported:

• Net Revenue: $25.4 billion
• Net Income: $481 million
• Core EBITDA: $1.618 billion

Costs and Expenses

Costs associated with revenue increased by 10.4% to $20.521 billion for the nine months ended September 30, 2024. Operating expenses were reported at $3.538 billion, reflecting a rise from $3.356 billion in the previous year.

Breakdown of costs and expenses for Q3 2024:

Market Dynamics

CBRE's revenue growth has been supported by the following factors:

• Increased leasing activity, particularly in office spaces.
• Growth in property management services, up 15.1% year-over-year.
• Improved conditions in property sales due to lower interest rates in the latter half of 2024.

Equity Investments

Equity income from unconsolidated subsidiaries showed a loss of $77 million for the nine months ended September 30, 2024, a decline from an income of $121 million in the prior year, primarily due to significant development asset dispositions in 2023 that did not recur.

Conclusion

CBRE Group, Inc. continues to leverage its diversified business model across various segments to drive revenue growth while managing costs effectively. As of the end of Q3 2024, CBRE remains well-positioned within the commercial real estate industry.

Article updated on 8 Nov 2024

Resources:

• CBRE Group, Inc. (CBRE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of CBRE Group, Inc. (CBRE)' financial performance, including balance sheets, income statements, and cash flow statements.
• SEC Filings – View CBRE Group, Inc. (CBRE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.