Dive Brief:
- CBRE’s facilities management net revenue, within its Global Workplace Solutions segment, grew 16.7% year over year in the fourth quarter, to over $4.66 billion, with strength across the firm’s enterprise and local businesses, according to a Feb. 13 release. This growth was particularly strong in the technology, industrial, data center and healthcare sectors, CBRE said.
- The company also reported significant overall growth in the fourth quarter of 2024, growing revenue 16% year over year and net revenue 18% in that time.
- CBRE is restructuring its business lines following the integration of Turner & Townsend, which added project management capabilities, and the acquisition of Industrious, a provider of premium flexible workplace solutions. This will enable the firm to generate synergies across verticals, CEO Bob Sulentic said on an earnings call.
Dive Insight:
The Global Workplace Solutions’s overarching segment grew revenue 15.4% year over year, to $7.04 billion, in the fourth quarter of 2024, with net revenue increasing 18.5% in that time, to $2.799 billion. Project management net revenue rose 9% year over year, led by CBRE’s Turner & Townsend business, which grew revenue 20% with particular strength in North America and the U.K., according to the release.
The tech, media and telecom segment accounted for 25% of CBRE’s facilities management revenue, followed by life sciences and healthcare, 20%, and financial services, 19%, according to the firm’s Q4 earnings presentation.
CBRE’s advisory services segment grew revenue 19.2% year over year, to $3.09 billion, with leasing revenue growth led by the Americas, where U.S. office leasing revenue grew 28% year over year, according to the firm’s earnings presentation. Occupiers are increasingly comfortable making long-term decisions given improved return-to-office momentum and a healthy economic outlook, CBRE said in its release, noting that major gateways showed continued strength in Q4.
“New York led most of the office leasing recovery in 2024 as other markets accelerated substantially in the fourth quarter,” Chief Financial Officer Emma Giamartino said on the earnings call. “Markets comprising New York, San Francisco, Los Angeles, Chicago, Washington, D.C., and Boston, grew approximately 30% in aggregate.”
“Other large markets, like Dallas, Atlanta and Seattle, grew even faster, and certain smaller Midwest markets picked up considerably,” the firm said in its presentation.
The company continues to participate in the data center sector across multiple lines of its business, including project management, facilities management, brokerage and investment management, Sulentic said.
“Our facilities management group manages over 700 data centers. In this business, we fortified our technical services capabilities with last year's acquisition of Direct Line Global, which serves a large base of hyperscale clients,” he said.
As a result of the firm acquiring full ownership of Industrious and integrating the project management capabilities of Turner & Townsend, it will establish new business segments this year. These will include Building Operations & Experience, comprising enterprise and local facilities management and property management, which will include flexible workplace solutions, and Project Management, consisting of the combined Turner & Townsend/CBRE project management business, CBRE said in the release.
“When you look across that base of assets, the management of that base of assets is very, very fragmented. Even though we manage 7 billion square feet, that's just a small, small piece of that portfolio,” Sulentic said on the call. “When you manage all those different classes of assets, there's some very common things that go on: procurement, building, engineering, maintaining records on maintenance of the building, and then responding to what you find in those records about preventative maintenance, accounting for the operations of the building. There [are] all kinds of commonality, whether you're managing a hospital or a complex warehouse.”
“We think by bringing these businesses together, that will generate some strong synergies and strong learning across that kind of horizontal element to that portfolio building,” Sulentic said, noting the firm’s vertical expertise across warehouses, hospitals and office space. “What we think we'll do by bringing this all together is grow our knowledge, grow the synergies across them [and] be able to scale our capabilities, and, by the way, add experience to the mix with Industrious.”
