CBRE Group Inc.

10/23/2025 | Press release | Distributed by Public on 10/23/2025 14:47

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) provides the reader with management's perspective on our financial condition, results of operations, liquidity and certain other factors that may affect future results. The MD&A in this Quarterly Report on Form 10-Q (Quarterly Report) for CBRE Group, Inc. for the three and nine months ended September 30, 2025 should be read in conjunction with our consolidated financial statements and related notes included in our 2024 Annual Report on Form 10-K (2024 Annual Report) as well as the unaudited financial statements included elsewhere in this Quarterly Report.
In addition, the statements and assumptions in this Quarterly Report that are not statements of historical fact are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended, including, in particular, statements about our plans, strategies and prospects as well as estimates of industry growth for the next quarter and beyond. For important information regarding these forward-looking statements, please see the discussion below under the caption "Cautionary Note on Forward-Looking Statements."
Business Environment
The operating environment for commercial real estate has improved considerably in 2025. This is evident in notably strong occupier demand for office, data center and industrial leases, particularly in the U.S., as well as increased real estate sales activity. Large occupiers' growing appetite for outsourcing services underpins demand for facilities management and project management work. We continue to monitor the potential impact of U.S. trade policy, including higher tariffs, but to date, have not seen a material effect on capital deployment or real estate occupancy decisions.
Capital Allocation
We did not repurchase any shares during the third quarter of 2025. We repurchased approximately $663 million worth of shares through the nine months ended September 30, 2025, while maintaining substantial liquidity to finance future growth.
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Results of Operations
The following table sets forth items derived from our consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024 (dollars in millions):
Three Months Ended September 30, (1)
Nine Months Ended September 30, (1)
2025 2024 2025 2024
Revenue:
Facilities management $ 5,137 50.1 % $ 4,638 51.3 % $ 15,024 51.9 % $ 13,263 52.3 %
Property management 657 6.4 % 507 5.6 % 1,889 6.5 % 1,437 5.7 %
Project management 2,027 19.8 % 1,683 18.6 % 5,444 18.8 % 4,766 18.8 %
Advisory leasing 1,145 11.2 % 974 10.8 % 3,001 10.4 % 2,582 10.2 %
Valuation 194 1.9 % 178 2.0 % 573 2.0 % 528 2.1 %
Loan servicing 127 1.2 % 130 1.4 % 369 1.3 % 369 1.5 %
Other portfolio services 90 0.9 % 96 1.1 % 267 0.9 % 282 1.1 %
Capital markets:
Advisory sales 544 5.3 % 420 4.6 % 1,364 4.7 % 1,129 4.5 %
Commercial mortgage origination 135 1.3 % 115 1.3 % 351 1.2 % 261 1.0 %
Investment management 148 1.4 % 196 2.2 % 447 1.5 % 494 1.9 %
Development services 63 0.6 % 106 1.2 % 212 0.7 % 268 1.1 %
Corporate, other and eliminations (9) (0.1) % (7) (0.1) % (20) (0.1) % (16) (0.1) %
Total revenue 10,258 100.0 % 9,036 100.0 % 28,921 100.0 % 25,363 100.0 %
Costs and expenses:
Pass-through costs (2)
4,211 41.1 % 3,718 41.1 % 12,095 41.8 % 10,629 41.9 %
Cost of revenue, excluding pass-through costs 4,093 39.9 % 3,534 39.1 % 11,416 39.5 % 9,892 39.0 %
Operating, administrative and other 1,328 12.9 % 1,237 13.7 % 3,794 13.1 % 3,538 13.9 %
Depreciation and amortization 181 1.8 % 178 2.0 % 540 1.9 % 497 2.0 %
Total costs and expenses 9,813 95.7 % 8,667 95.9 % 27,845 96.3 % 24,556 96.8 %
Gain (loss) on disposition of real estate 36 0.4 % (1) 0.0 % 55 0.2 % 12 0.0 %
Operating income 481 4.7 % 368 4.1 % 1,131 3.9 % 819 3.2 %
Equity income (loss) from unconsolidated subsidiaries 53 0.5 % (4) 0.0 % 50 0.2 % (77) (0.3) %
Other income 3 0.0 % 12 0.1 % 10 0.0 % 26 0.1 %
Interest expense, net of interest income 50 0.5 % 64 0.7 % 159 0.5 % 163 0.6 %
Write-off of financing costs on extinguished debt - 0.0 % - 0.0 % 2 0.0 % - 0.0 %
Income before provision for income taxes 487 4.7 % 312 3.5 % 1,030 3.6 % 605 2.4 %
Provision for income taxes 91 0.9 % 67 0.7 % 203 0.7 % 70 0.3 %
Net income 396 3.9 % 245 2.7 % 827 2.9 % 535 2.1 %
Less: Net income attributable to non-controlling interests 33 0.3 % 20 0.2 % 86 0.3 % 54 0.2 %
Net income attributable to CBRE Group, Inc. $ 363 3.5 % $ 225 2.5 % $ 741 2.6 % $ 481 1.9 %
Core EBITDA $ 821 8.0 % $ 688 7.6 % $ 2,019 7.0 % $ 1,618 6.4 %
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(1)Calculated as a percentage of Total Revenue.
(2)Pass-through costs represent certain costs incurred associated with subcontracted third-party vendor work performed for clients. These costs are reimbursable by clients and the corresponding amounts owed are reflected within Revenue.
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Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024
We reported consolidated net income of $363 million for the quarter, on revenue of $10.3 billion as compared to consolidated net income of $225 million on revenue of $9.0 billion in the prior year.
The revenue increase of 13.5% reflected growth in leasing activity, particularly for office space, industrial and data centers,along with increased revenue from commercial mortgage origination and property sales in the Advisory segment and continued growth in the Business Operations & Experience (BOE) segment, which benefited from strong new business activity, contract expansions and acquisitions. Revenue from our Project Management segment increased, driven by strength in the United Kingdom, the Middle East and North America. Revenue decreased in the Real Estate Investments (REI) segment, driven by incentive fees recognized in the prior year quarter.
Foreign currency translation had a 1.7% positive impact on revenue, reflecting strength in the euro and British pound sterling partially offset by weakness in the Indian rupee.
Pass-through costs increased 13.3% during the quarter as compared to the same period in 2024 primarily due to revenue growth in the BOE and Project Management segments. Foreign currency translation had a 1.8% negative impact on pass-through costs.
Cost of revenue, excluding pass-through costs increased 15.8% during the quarter as compared to the same period in 2024 primarily due to revenue growth consistingof higher commission expense and employee compensation, as well as higher indirect reimbursed costs. Foreign currency translation had a 1.6% negative impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs increased slightly to 39.9% of total revenue from 39.1% driven by higher costs to support growth in revenues.
Operating, administrative and other expenses increased 7.4% during the quarter as compared to the same period in 2024. The increase was driven byan increase in third-party fees related to acquisitions and integration activities, along with an increase in employee compensation, driven by revenue growth. Foreign currency translation had a 1.7% negative impact on total operating expenses during the quarter. Operating, administrative and other expenses as a percentage of revenue decreased to 12.9% in the third quarter 2025 from 13.7% in the third quarter 2024, as operating expenses grew slower than revenue.
Depreciation and amortization expense increased by 1.7% during the quarter, as compared to the same period in 2024, reflecting higher depreciation and amortization expense related to assets acquired from recent acquisitions, such as Industrious.
Gain on disposition of real estate increased by $36 million during the quarter, driven by monetization of real estate development assets in the REI segment.
We recorded equity income from unconsolidated subsidiaries of approximately $53 million, compared to equity loss of $4 million in the third quarter 2024, primarily due to positive co-investment returns and sales in the current quarter.
Interest expense, net of interest income, decreased by 21.9%, compared with the third quarter 2024. This decrease was primarily attributableto increased net investment hedging activity, offset by the impact of increased commercial paper borrowings and the issuance of senior term loans and new senior unsecured notes.
Our provision for income taxes on a consolidated basis was $91 million for the three months ended September 30, 2025 as compared to a provision for income taxes of $67 million for the three months ended September 30, 2024. The increase of $24 million is primarily related to an increase in current year earnings and favorable permanent book tax differences. Our effective tax rate decreased to 18.7% for the three months ended September 30, 2025 from 21.5% for the three months ended September 30, 2024. Our effective tax rate for the three months ended September 30, 2025 is different than the U.S. federal statutory tax rate of 21.0%, primarily due to U.S. state taxes and favorable permanent book tax differences.
Legislative Developments
The Organization for Economic Co-operation & Development (OECD) Pillar Two Model Rules established a minimum global effective tax rate of 15% on country-by-country profits for large multinational companies. European Union member states along with many other countries adopted or expect to adopt the OECD Pillar Two Model effective January 1, 2024 or thereafter. The OECD and other countries continue to publish guidelines and legislation which include transition and safe harbor rules. We continue to monitor new legislative changes and assess the global impact of the Pillar Two Model Rules.
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On July 4, 2025, the U.S. Government enacted, H.R.1, the One Big Beautiful Bill Act ("OBBBA"), a budget reconciliation package that changes the U.S. federal income tax laws, including extensions of various expiring provisions from the Tax Cuts and Jobs Act of 2017. The 2025 impacts of the OBBBA are insignificant based on our current operations.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
We reported consolidated net income of $741 million for the nine months ended September 30, 2025 on revenue of $28.9 billion as compared to consolidated net income of $481 million on revenue of $25.4 billion for the nine months ended September 30, 2024.
The revenue increase of 14.0% reflected growth in leasing activity, particularly for office space, industrial and data centers, along with increased revenue from commercial mortgage origination and property sales in the Advisory segment and continued growth in the BOE segment, which benefited from strong new business activity, contract expansions and acquisitions. Revenue from our Project Management segment increased, driven by continued strong performance from the United Kingdom, North America and the Middle East. Revenue decreased in the REI segment, driven by lower carried interest and incentive fees recognized in the prior year.
Foreign currency translation had a 0.4% positive impact on total revenue during the nine months ended September 30, 2025, primarily driven by strength in the British pound sterling and euro, partially offset by weakness in the Canadian dollar, Australian dollar, Indian rupee and Mexican peso.
Pass-through costs increased 13.8% during the nine months ended September 30, 2025 as compared to the same period in 2024 primarily due to revenue growth in the BOE and Project Management segments. Foreign currency translation had a 0.4% negative impact on pass-through costs.
Cost of revenue, excluding pass-through costs increased 15.4% during the nine months ended September 30, 2025 as compared to the same period in 2024 primarily due to revenue growth consisting of higher commission expense and employee compensation, as well as higher indirect reimbursed costs. Foreign currency translation had a 0.3% negative impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs increased slightly to 39.5% of total revenue from 39.0%.
Operating, administrative and other expenses increased 7.2% as compared to the same period last year. The increase was driven by an increase in third-party fees related to acquisitions and integration activities, along with an increase in bad debt expenses and employee compensation, driven by revenue growth. Foreign currency translation had a 0.3% negative impact on total operating expenses during the nine months ended September 30, 2025. Operating, administrative and other expenses as a percentage of revenue decreased to 13.1% from 13.9%, as operating expenses grew slower than revenue.
Depreciation and amortization expense increased by 8.7% during the nine months ended September 30, 2025 as compared to the same period in 2024, reflecting higher depreciation and amortization expense related to assets acquired from recent acquisitions, such as Industrious.
Gain on disposition of real estate increased by $43 million during the nine months ended September 30, 2025, driven by monetization of real estate development assets in the REI segment.
We reported equity income of $50 million during the nine months ended September 30, 2025 compared to equity loss of $77 million in the same period in 2024. This was primarily driven by positive co-investment returns and sales in the current period, compared to higher unrealized equity losses in the prior period, driven by a fair value adjustment related to our non-core strategic equity investment in Altus.
Interest expense, net of interest income, decreased by 2.5% for the nine months ended September 30, 2025, compared to the same periodin 2024. This decrease was primarily due to the impact of net investment hedging activity, partially offset by the impact of increased commercial paper borrowings and the issuance of senior term loans and new senior unsecured notes.
Our provision for income taxes on a consolidated basis was $203 million for the nine months ended September 30, 2025 as compared to a provision for income taxes of $70 million for the nine months ended September 30, 2024. The increase of $133 million is primarily related to an increase in earnings, favorable permanent book tax differences, and a prior year benefit for the reversal of unrecognized tax positions. Our effective tax rate increased to 19.7% for the nine months ended September 30, 2025 from 11.6% for the nine months ended September 30, 2024. Our effective tax rate for the nine months
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ended September 30, 2025 is different than the U.S. federal statutory tax rate of 21.0% primarily due to the U.S. state taxes and favorable permanent book tax differences.
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Segment Operations
In January 2025, we combined our project management business with our Turner & Townsend majority-owned subsidiary and created a fourth reportable segment, Project Management. In addition, on January 16, 2025, we acquired full ownership of Industrious, a provider of premium flexible workplace solutions, and established a new business segment, Building Operations & Experience (BOE), comprised of enterprise and local facilities management, property management and flexible workplace solutions.
In connection with the transactions described above, we organized our operations around, and publicly report our financial results on, four reportable business segments: (1) Advisory Services; (2) BOE; (3) Project Management; and (4) Real Estate Investments (REI).
Advisory Services provides a comprehensive range of services globally, including property leasing, capital markets (property sales and loan origination), loan servicing, and valuation. BOE provides a broad suite of integrated, contractually based outsourcing services to occupiers and owners of real estate, including facilities management and property management. Our Project Management business delivers program management, project management and cost consultancy services across commercial real estate, infrastructure and natural resources sectors. REI is a major real assets developer, investor and operator and is comprised of two businesses: investment management and development services.
We also have a Corporate and Other segment. Corporate primarily consists of corporate overhead costs. Other consists of activities from strategic non-core non-controlling equity investments and is considered an operating segment but does not meet the aggregation criteria for presentation as a separate reportable segment and is, therefore, combined with Corporate and reported as Corporate and other. It also includes eliminations related to inter-segment revenue. For additional information on our segments, see Note 16 - Segments of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.
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Advisory Services
The following table summarizes our results of operations for our Advisory Services operating segment for the three and nine months ended September 30, 2025 and 2024 (dollars in millions):
Three Months Ended September 30, (1)
Nine Months Ended September 30, (1)
2025 2024 2025 2024
Revenue:
Advisory leasing $ 1,145 51.2 % $ 974 50.9 % $ 3,001 50.6 % $ 2,582 50.1 %
Valuation 194 8.7 % 178 9.3 % 573 9.7 % 528 10.3 %
Loan servicing 127 5.7 % 130 6.8 % 369 6.2 % 369 7.2 %
Other portfolio services 90 4.0 % 96 5.0 % 267 4.5 % 282 5.5 %
Capital markets:
Advisory sales 544 24.3 % 420 22.0 % 1,364 23.0 % 1,129 21.9 %
Commercial mortgage origination 135 6.0 % 115 6.0 % 351 5.9 % 261 5.1 %
Total segment revenue 2,235 100.0 % 1,913 100.0 % 5,925 100.0 % 5,151 100.0 %
Costs and expenses:
Pass-through costs (2)
13 0.6 % 17 0.9 % 39 0.7 % 43 0.8 %
Cost of revenue, excluding pass-through costs 1,298 58.1 % 1,105 57.8 % 3,403 57.4 % 2,941 57.1 %
Operating, administrative and other 481 21.5 % 447 23.4 % 1,364 23.0 % 1,304 25.3 %
Depreciation and amortization 69 3.1 % 67 3.5 % 203 3.4 % 192 3.7 %
Total costs and expenses 1,861 83.3 % 1,636 85.5 % 5,009 84.5 % 4,480 87.0 %
Operating income 374 16.7 % 277 14.5 % 916 15.5 % 671 13.0 %
Equity loss from unconsolidated subsidiaries - 0.0 % (9) (0.5) % - 0.0 % (8) (0.2) %
Other income 1 0.0 % 2 0.1 % 4 0.1 % 2 0.0 %
Add-back: Depreciation and amortization 69 3.1 % 67 3.5 % 203 3.4 % 192 3.7 %
Adjustments:
Impact of fair value non-cash adjustments related to unconsolidated equity investments - 0.0 % 9 0.5 % 2 0.0 % 9 0.2 %
Costs associated with efficiency and cost-reduction initiatives - 0.0 % 13 0.7 % - 0.0 % 13 0.3 %
Segment operating profit $ 444 $ 359 $ 1,125 $ 879
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(1)Calculated as a percentage of Total Revenue.
(2)Pass-through costs represent certain costs incurred associated with subcontracted third-party vendor work performed for clients. These costs are reimbursable by clients and the corresponding amounts owed are reflected within Revenue.
Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024
Revenue increased 16.8% during the quarter compared to the same period in 2024. Property sales revenue grew 29.5%, led by office, industrial, land and data centers in the U.S., APAC and Europe. Globally, sales grew double-digits across office, industrial and multifamily. Global leasing revenue rose 17.6%, led by data centers, office and industrial leasing driven by Americas which grew 19.1%, including 17.9% in the United States and APAC which grew 21.6%.
Foreign currency translation had a 1.0% positive impact on total revenue during the quarter, primarily driven by strength in the euro and British pound sterling partially offset by weakness in the Australian dollar and Indian rupee.
Cost of revenue, excluding pass-through costs increased 17.5%, primarily reflecting business growth and higher commission expense. Foreign currency translation had a 0.9% negative impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs as a percentage of total revenue increased slightly to 58.1% compared to the same period in 2024, as costs of revenue increased proportionately with the increase in revenue.
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Operating, administrative and other expenses increased by 7.6%, as compared to the same period in 2024, primarily due to higher employee compensation and business promotion, advertising and travel expenses driven by the growth in the business. Foreign currency translation had a 1.3% negative impact on total operating expenses.
In connection with the origination and sale of mortgage loans with servicing rights retained, we record servicing assets or liabilities based on the fair value of mortgage servicing rights (MSRs) on the date the loans are sold. Upon origination of a mortgage loan held for sale, the fair value of the mortgage servicing rights to be retained is included in the forecasted proceeds from the anticipated loan sale and results in a net gain (which is reflected in revenue). Our MSRs are initially recorded at fair value. Subsequent to the initial recording, MSRs are amortized in proportion to and over the period that the servicing income is expected to be received based on projections and timing of estimated future net cash flows and assessed for impairment based on the fair value each reporting period.
For the three months ended September 30, 2025, MSRs contributed $41 million to operating income, offset by $36 million of amortization of related intangible assets. The MSR contribution to third quarter 2024 operating income was $38 million and amortization totaled $36 million. The increase was associated with higher origination activity given an increase in financing activities and strong performance in both agency and non-agency lending.
Depreciation and amortization expense increased 3.0% primarily due to higher amortization of mortgage servicing rights as described above.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Revenue increased 15.0% for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. Property sales revenue increased 20.8%, led by office, industrial, land and data centers in the U.S., APAC and Europe. Global leasing revenue rose 16.2%, led by data centers, office and industrial leasing driven by Americas which grew 17.8%, including 18.1% in the United States and the United Kingdom, which grew 15.3%.
Foreign currency translation had a 0.1% positive impact on total revenue during the nine months ended September 30, 2025, primarily driven by strength in the British pound sterling and euro, partially offset by weakness in the Australian dollar and Canadian dollar.
Cost of revenue, excluding pass-through costs increased 15.7%, primarily reflecting business growth and higher commission expense. Foreign currency translation had a negligible impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs slightly increased to 57.4% of total revenue from 57.1% for the same period in 2024 primarily due to escalating commission payouts driven by strong revenue growth.
Operating, administrative and other expenses increased by 4.6% for the nine months ended September 30, 2025 as compared to the same period in 2024, primarily due to higher employee compensation, higher business promotion, advertising and travel expense, driven by growth in the business. Foreign currency translation had a 0.1% positive impact on total operating expenses.
For the nine months ended September 30, 2025, MSRs contributed $96 million to operating income, offset by $108 million of amortization of related intangible assets. For the nine months ended September 30, 2024, MSRs contributed $74 million to operating income, offset by $104 million of amortization of related intangible assets. The increase was associated with higher origination activity given an increase in financing activities.
Depreciation and amortization expense increased 5.7% primarily due to higher amortization of mortgage servicing rights as described above.
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Building Operations & Experience
The following table summarizes our results of operations for our Building Operations & Experience (BOE) operating segment for the three and nine months ended September 30, 2025 and 2024 (dollars in millions):
Three Months Ended September 30, (1)
Nine Months Ended September 30, (1)
2025 2024 2025 2024
Revenue:
Facilities management $ 5,137 88.7 % $ 4,638 90.1 % $ 15,024 88.8 % $ 13,263 90.2 %
Property management 657 11.3 % 507 9.9 % 1,889 11.2 % 1,437 9.8 %
Total segment revenue 5,794 100.0 % 5,145 100.0 % 16,913 100.0 % 14,700 100.0 %
Costs and expenses:
Pass-through costs (2)
3,085 53.2 % 2,804 54.5 % 9,147 54.1 % 8,114 55.2 %
Cost of revenue, excluding pass-through costs 2,119 36.6 % 1,830 35.6 % 6,095 36.0 % 5,165 35.1 %
Operating, administrative and other 348 6.0 % 282 5.5 % 983 5.8 % 885 6.0 %
Depreciation and amortization 65 1.1 % 67 1.3 % 196 1.2 % 169 1.1 %
Total costs and expenses 5,617 96.9 % 4,983 96.9 % 16,421 97.1 % 14,333 97.5 %
Operating income 177 3.1 % 162 3.1 % 492 2.9 % 367 2.5 %
Equity income (loss) from unconsolidated subsidiaries 3 0.1 % - 0.0 % (14) (0.1) % 4 0.0 %
Other income (loss) 1 0.0 % (1) 0.0 % 6 0.0 % 1 0.0 %
Add-back: Depreciation and amortization 65 1.1 % 67 1.3 % 196 1.2 % 169 1.1 %
Adjustments:
Integration and other costs related to acquisitions
17 0.3 % 5 0.1 % 60 0.4 % 35 0.2 %
Costs associated with efficiency and cost-reduction initiatives - 0.0 % 11 0.2 % - 0.0 % 41 0.3 %
Net results related to the wind-down of certain businesses (3)
22 0.4 % - 0.0 % 22 0.1 % - 0.0 %
Segment operating profit $ 285 $ 244 $ 762 $ 617
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(1)Calculated as a percentage of Total Revenue.
(2)Pass-through costs represent certain costs incurred associated with subcontracted third-party vendor work performed for clients. These costs are reimbursable by clients and the corresponding amounts owed are reflected within Revenue.
(3)In the third quarter of 2025, management made the decision to wind down certain businesses within the BOE Segment.
Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024
Revenue increased 12.6%, reflecting a double-digit increase in property management and facilities management, primarily due to growth in clients driving increased management fees and reimbursements as well as the impact from acquisitions. Foreign currency translation had a 1.9% positive impact on total revenue during the quarter, primarily driven by strength in the euro and British pound sterling, partially offset by weakness in the Indian rupee.
Pass-through costs increased 10.0% during the quarter as compared to the same period in 2024 primarily due to revenue growth in the BOE segment. Foreign currency translation had a 1.9% negative impact on pass-through costs.
Cost of revenue, excluding pass-through costs increased 15.8%, driven primarily by higher professional compensation and indirect managed spend, due to revenue growth, as well as an increase driven by acquisitions. Foreign currency translation had a 1.8% negative impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs was 36.6% of total revenue, and increased compared to 35.6% in the third quarter 2024.
Operating, administrative and other expenses increased 23.4%, primarily due to higher employee compensation and benefit expenses and an increase in bad debt expense. Foreign currency translation had a 2.1% negative impact on total operating expenses during the quarter.
Depreciation and amortization expense decreased 3.0%, reflecting lower amortization expense related to intangibles assets, which became fully-amortized.
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Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Revenue increased 15.1% for the nine months ended September 30, 2025 as compared to the same period in 2024, reflecting a double-digit increase in property management and facilities management, primarily due to growth in clients driving increased management fees well as the impact from acquisitions. Foreign currency translation had a 0.5% positive impact on total revenue, primarily driven by strength in the British pound sterling and euro, partially offset by weakness in the Canadian dollar, Indian rupee and Mexican peso.
Pass-through costs increased 12.7% during the nine months ended September 30, 2025 as compared to the same period in 2024 primarily due to revenue growth in the BOE segment. Foreign currency translation had a 0.4% negative impact on pass-through costs.
Cost of revenue, excluding pass-through costs increased 18.0%, driven by higher professional compensation and indirect managed spend, due to revenue growth, as well as an increase driven by acquisitions. Foreign currency translation had a 0.4% negative impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs was 36.0% of total revenue, an increase from 35.1% for the nine months ended September 30, 2024.
Operating, administrative and other expenses increased 11.1%, primarily due to higher employee compensation and benefit expenses and an increase in bad debt, business promotion, advertising and travel expenses. Foreign currency translation had a 0.6% negative impact on total operating expenses during the nine months ended September 30, 2025.
Depreciation and amortization expense increased 16.0%, reflecting higher expense related to intangibles from recent acquisitions such as Industrious.
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Project Management
The following table summarizes our results of operations for our Project Management operating segment for the three and nine months ended September 30, 2025 and 2024 (dollars in millions):
Three Months Ended September 30, (1)
Nine Months Ended September 30, (1)
2025 2024 2025 2024
Segment revenue 2,027 100.0 % 1,683 100.0 % 5,444 100.0 % 4,766 100.0 %
Costs and expenses:
Pass-through costs (2)
1,113 54.9 % 897 53.3 % 2,909 53.4 % 2,472 51.9 %
Cost of revenue, excluding pass-through costs 639 31.5 % 541 32.1 % 1,797 33.0 % 1,622 34.0 %
Operating, administrative and other 124 6.1 % 117 7.0 % 365 6.7 % 320 6.7 %
Depreciation and amortization 28 1.4 % 26 1.5 % 78 1.4 % 83 1.7 %
Total costs and expenses 1,904 93.9 % 1,581 93.9 % 5,149 94.6 % 4,497 94.4 %
Operating income 123 6.1 % 102 6.1 % 295 5.4 % 269 5.6 %
Equity income from unconsolidated subsidiaries - 0.0 % 1 0.1 % - 0.0 % - 0.0 %
Other income - 0.0 % - 0.0 % 1 0.0 % 2 0.0 %
Add-back: Depreciation and amortization 28 1.4 % 26 1.5 % 78 1.4 % 83 1.7 %
Adjustments:
Integration and other costs related to acquisitions
2 0.1 % - 0.0 % 13 0.2 % (22) (0.5) %
Segment operating profit $ 153 $ 129 $ 387 $ 332
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(1)Calculated as a percentage of Total Revenue
(2)Pass-through costs represent certain costs incurred associated with subcontracted third-party vendor work performed for clients. These costs are reimbursable by clients and the corresponding amounts owed are reflected within Revenue.
Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024
Revenue increased 20.4% due to strong business activity in the United Kingdom, the Middle East and North America and increased revenue from pass-through costs. Foreign currency translation had a 1.9% positive impact on total revenue during the quarter, primarily driven by strength in the British pound sterling and euro.
Pass-through costs increased 24.1% during the quarter as compared to the same period in 2024 primarily due to revenue growth in the Project Management segment. Foreign currency translation had a 1.5% negative impact on pass-through costs.
Cost of revenue, excluding pass-through costs increased 18.1%, driven by increased professional compensation. Foreign currency translation had a 2.2% negative impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs was 31.5% of total revenue, slightly down from 32.1% in the third quarter 2024.
Operating, administrative and other expenses increased 6.0%, primarily due to higher employee compensation expenses and higher business promotion, advertising and travel expense. Foreign currency translation had a 2.6% negative impact on total operating expenses during the quarter.
Depreciation and amortization expense increased 7.7%, reflecting higher depreciation expense.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Revenue increased 14.2% for the nine months ended September 30, 2025, due to strong business activity and increased revenue from pass-through costs. Foreign currency translation had a 0.5% positive impact on total revenue, primarily driven by strength in the British pound sterling and euro partially offset by weakness in the Indian rupee, Australian dollar and Mexican peso.
Pass-through costs increased 17.7% during the nine months ended September 30, 2025 as compared to the same period in 2024 primarily due to revenue growth in the Project Management segment. Foreign currency translation had a 0.3% negative impact on pass-through costs.
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Cost of revenue, excluding pass-through costs increased 10.8%, driven by increased professional compensation. Foreign currency translation had a 0.6% negative impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs was 33.0% of total revenue, a slight decrease from 34.0% for the nine months ended September 30, 2024.
Operating, administrative and other expenses increased 14.1%, primarily due to higher employee compensation expenses. Foreign currency translation had a 1.0% negative impact on total operating expenses during the nine months ended September 30, 2025.
Depreciation and amortization expense decreased 6.0%, reflecting lower amortization expense due to intangible assets being fully amortized in 2024.
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Real Estate Investments
The following table summarizes our results of operations for our Real Estate Investments (REI) operating segment for the three and nine months ended September 30, 2025 and 2024 (dollars in millions):
Three Months Ended September 30, (1)
Nine Months Ended September 30, (1)
2025 2024 2025 2024
Revenue:
Investment management $ 148 70.1 % $ 196 64.9 % $ 447 67.8 % $ 494 64.8 %
Development services 63 29.9 % 106 35.1 % 212 32.2 % 268 35.2 %
Total segment revenue 211 100.0 % 302 100.0 % 659 100.0 % 762 100.0 %
Costs and expenses:
Cost of revenue 39 18.5 % 60 19.9 % 121 18.4 % 161 21.1 %
Operating, administrative and other 192 91.0 % 229 75.8 % 540 81.9 % 586 76.9 %
Depreciation and amortization 2 0.9 % 4 1.3 % 8 1.2 % 10 1.3 %
Total costs and expenses 233 110.4 % 293 97.0 % 669 101.5 % 757 99.3 %
Gain (loss) on disposition of real estate 33 15.6 % (1) (0.3) % 52 7.9 % 12 1.6 %
Operating income 11 5.2 % 8 2.6 % 42 6.4 % 17 2.2 %
Equity income from unconsolidated subsidiaries 49 23.2 % 14 4.6 % 40 6.1 % 29 3.8 %
Other income - 0.0 % 8 2.6 % - 0.0 % 6 0.8 %
Add-back: Depreciation and amortization 2 0.9 % 4 1.3 % 8 1.2 % 10 1.3 %
Adjustments:
Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue 3 1.4 % (4) (1.3) % 10 1.5 % 12 1.6 %
Costs associated with efficiency and cost-reduction initiatives - 0.0 % 4 1.3 % 1 0.2 % 4 0.5 %
Net results related to the wind-down of certain businesses (2)
8 3.8 % - 0.0 % 22 3.3 % - 0.0 %
Provision associated with Telford's fire safety remediation efforts - 0.0 % 33 10.9 % - 0.0 % 33 4.3 %
Segment operating profit $ 73 $ 67 $ 123 $ 111
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(1)Calculated as a percentage of Total Revenue
(2)In the first quarter of 2025, management made the decision to wind down Telford Homes' legacy construction business. A new Telford entity, Telford Living, is developing residential housing in the U.K. under a new business model under which the company does not self-perform general contracting.
Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024
Revenue decreased 30.1% for the current quarter primarily due to lower incentive fees in our Investment Management business and lower construction management and development fees from development services. Foreign currency translation had a 2.0% positive impact on total revenue during the quarter primarily driven by strength in the British pound sterling and euro.
Cost of revenue decreased 35.0% in the quarter as compared to the same period in 2024 due to lower construction costs incurred on our real estate development projects. Foreign currency translation had a 3.3% negative impact on total cost of revenue during the quarter.
Operating, administrative and other expenses decreased 16.2% primarily due to a decrease in total compensation in our investment management and development services lines of business. Foreign currency translation had a 1.3% negative impact on total operating expenses.
Gain on disposition of real estate increased by $34 million compared with third quarter 2024, driven by monetization of real estate development assets in the current period versus none in the prior year quarter.
We recorded equity income from unconsolidated subsidiaries of approximately $49 million versus equity income of $14 million in the third quarter 2024, primarily due to positive co-investment returns and sales in the current quarter.
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A roll forward of our AUM by product type for the three months ended September 30, 2025 is as follows (dollars in billions):
Funds Separate Accounts Securities Total
Balance at June 30, 2025 $ 68.5 $ 76.6 $ 10.2 $ 155.3
Inflows 1.4 1.5 0.7 3.6
Outflows (1.7) (1.2) (0.3) (3.2)
Market appreciation (depreciation) 0.4 (0.6) 0.3 0.1
Balance at September 30, 2025 $ 68.6 $ 76.3 $ 10.9 $ 155.8
AUM generally refers to the properties and other assets with respect to which we provide (or participate in) oversight, investment management services and other advice, and which generally consist of real estate properties or loans, securities portfolios and investments in operating companies and joint ventures. Our AUM is intended principally to reflect the extent of our presence in the real estate market, not to be the basis for determining our management fees. Our assets under management consist of:
•the total fair market value of the real estate properties and other assets either wholly-owned or held by joint ventures and other entities in which our sponsored funds or investment vehicles and client accounts have invested or to which they have provided financing. Committed (but unfunded) capital from investors in our sponsored funds is not included in this component of our AUM. The value of development properties is included at estimated completion cost. In the case of real estate operating companies, the total value of real properties controlled by the companies, generally through joint ventures, is included in AUM; and
•the net asset value of our managed securities portfolios, including investments (which may be comprised of committed but uncalled capital) in private real estate funds under our fund of funds investments.
Our calculation of AUM may differ from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Revenue decreased 13.5% for the nine months ended September 30, 2025 primarily due to lower incentive fees and carried interest partially offset by higher asset management fees in our Investment Management business and lower construction management and development fees from development services. Foreign currency translation had a 0.9% positive impact on total revenue during the nine months ended September 30, 2025, primarily driven by strength in the British pound sterling.
Cost of revenue decreased 24.8% for the nine months ended September 30, 2025 as compared to the same period in 2024 due to lower construction costs incurred on our real estate development projects. Foreign currency translation had a 1.9% negative impact on total cost of revenue during the nine months ended September 30, 2025.
Operating, administrative and other expenses decreased 7.8%, primarily due to a decrease in variable incentive compensation in our investment management and development services lines of business. Foreign currency translation had a 0.6% negative impact on total operating expenses.
Gain on disposition of real estate increased by $40 million compared to the same period in 2024 due primarily to gains recognized upon monetization of real estate development projects.
We recorded equity income from unconsolidated subsidiaries of approximately $40 million versus equity income of $29 million during the same period in 2024, primarily due to positive co-investment returns and sales in the current quarter.
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A roll forward of our AUM by product type for the nine months ended September 30, 2025 is as follows (dollars in billions):
Funds Separate Accounts Securities Total
Balance at December 31, 2024 $ 64.0 $ 73.4 $ 8.8 $ 146.2
Inflows 2.8 5.4 2.2 10.4
Outflows (2.3) (6.7) (0.9) (9.9)
Market appreciation 4.1 4.2 0.8 9.1
Balance at September 30, 2025 $ 68.6 $ 76.3 $ 10.9 $ 155.8
We describe above how we calculate AUM. Also, as noted above, our calculation of AUM may differ from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers.
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Corporate and Other
Our Corporate segment primarily consists of corporate overhead costs. Other consists of activities from strategic non-core non-controlling equity investments and is considered an operating segment but does not meet the aggregation criteria for presentation as a separate reportable segment and is, therefore, combined with our core Corporate function and reported as Corporate and other. The following table summarizes our results of operations for our core Corporate and other segment for the three and nine months ended September 30, 2025 and 2024 (dollars in millions):
Three Months Ended September 30, (1)
Nine Months Ended September 30, (1)
2025 2024 2025 2024
Elimination of inter-segment revenue $ (9) $ (7) $ (20) $ (16)
Costs and expenses:
Cost of revenue (2)
(2) (2) - 3
Operating, administrative and other 183 162 542 443
Depreciation and amortization 17 14 55 43
Total costs and expenses 198 174 597 489
Gain on disposition of real estate 3 - 3 -
Operating loss (204) (181) (614) (505)
Equity income (loss) from unconsolidated subsidiaries 1 (10) 24 (102)
Other income (loss) 1 3 (1) 15
Add-back: Depreciation and amortization 17 14 55 43
Adjustments:
Business and finance transformation 10 - 38 -
Costs associated with efficiency and cost-reduction initiatives - 13 12 79
Charges related to indirect tax audits and settlements - 25 (1) 39
Costs incurred related to legal entity restructuring - - - 2
Integration and other costs related to acquisitions 41 17 131 17
Segment operating loss $ (134) $ (119) $ (356) $ (412)
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(1)Percentage of revenue calculations are not meaningful and therefore not included.
(2)Primarily relates to inter-segment eliminations.
Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024
Core corporate
Operating, administrative and other expenses for our core corporate functions rose 13.0% to $183 million for the third quarter of 2025, mainly due to higher costs related to acquisitions, integration activities and higher management incentive compensation.
Other (non-core)
We recorded equity income of $1 million in the third quarter of 2025, compared to a $10 million loss in the third quarter of 2024, reflecting the lower value of our investment in publicly traded Altus Power. Altus was acquired by a third-party on April 16, 2025.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Core corporate
Operating, administrative and other expenses for our core corporate functions rose 22.3% to $542 million for the nine months ended September 30, 2025, mainly due to higher costs related to acquisitions, integration activities and higher management incentive compensation.
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Other (non-core)
We recorded equity income of $24 million in the nine months ended September 30, 2025, reflecting the higher value of our investment in publicly traded Altus, which was acquired by a third-party on April 16, 2025. This compares with a $102 million loss during the same period in 2024, reflecting the lower valuation of our investment in Altus.
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Liquidity and Capital Resources
We believe that we can satisfy our working capital and funding requirements with internally generated cash flow and, as necessary, borrowings under our revolving credit facilities and commercial paper program. Our expected capital requirements for 2025 include up to $339 million of anticipated capital expenditures, net of tenant concessions. During the nine months ended September 30, 2025, we incurred $222 million of capital expenditures. As of September 30, 2025, we had aggregate future commitments of $187 million related to co-investments funds in our REI segment, $22 million of which is expected to be funded in 2025. Additionally, as of September 30, 2025, we are committed to fund additional capital of $357 million and $62 million to consolidated and unconsolidated projects, respectively, within our REI segment. As of September 30, 2025, we had $3.5 billion of borrowings available under our revolving credit facilities (under both the 5-Year Revolving Credit Agreement and 364-Day Revolving Credit Agreement, as described below, and the Turner & Townsend revolving credit facility) and $1.7 billion of cash and cash equivalents. We intend to maintain available commitments under the 5-Year Revolving Credit Agreement in an amount at least equal to the amount of commercial paper notes outstanding from time to time. As of September 30, 2025 and December 31, 2024, we had $1.1 billion and $175 million, respectively, in outstanding borrowings under the commercial paper program.
We have historically relied on our internally generated cash flow, our revolving credit facilities and commercial paper program to fund our working capital, capital expenditure and general investment requirements (including in-fill acquisitions) and have not sought other external sources of financing to help fund these requirements. In the absence of extraordinary events, large strategic acquisitions or large returns of capital to shareholders, we anticipate that our cash flow from operations, our revolving credit facilities and commercial paper program would be sufficient to meet our anticipated cash requirements for the foreseeable future, and at a minimum for the next 12 months. Given compensation is our largest expense and our sales and leasing professionals are generally paid on a commission and/or bonus basis that correlates with their revenue production, the negative effect of difficult market conditions is partially mitigated by the inherent variability of our compensation cost structure. We may seek to take advantage of market opportunities to refinance existing debt instruments, as we have done in the past, with new debt instruments at interest rates, maturities and terms we deem attractive. We may also, from time to time in our sole discretion, purchase, redeem, or retire our existing senior notes, through tender offers, in privately negotiated or open market transactions, or otherwise.
On May 12, 2025, we issued $600 million in aggregate principal amount of 4.800% senior notes due in 2030 and $500 million in aggregate principal amount of 5.500% senior notes due in 2035, generating aggregate net proceeds of approximately $1.1 billion after offering expenses. On May 28, 2025, we used a portion of the proceeds from this offering to redeem in full the $600 million aggregate outstanding principal amount of our 4.875% senior notes due 2026.
As noted above, we believe that any future significant acquisitions we may make could require us to obtain additional debt or equity financing. In the past, we have been able to obtain such financing for material transactions on terms that we believed to be reasonable. However, it is possible that we may not be able to obtain acquisition financing on favorable terms, or at all, in the future.
Our long-term liquidity needs, other than those related to ordinary course obligations and commitments such as operating leases, are generally comprised of the following elements. The first is the repayment of the outstanding and anticipated principal amounts of our long-term indebtedness. If our cash flow is insufficient to repay our long-term debt when it comes due, then we expect that we would need to refinance such indebtedness or otherwise amend its terms to extend the maturity dates. We cannot make any assurances that such refinancing or amendments would be available on attractive terms, if at all.
The second long-term liquidity need is the payment of obligations related to acquisitions. Our acquisition structures often include deferred and/or contingent purchase consideration in future periods that are subject to the passage of time or achievement of certain performance metrics and other conditions. As of September 30, 2025 and December 31, 2024, we had accrued deferred purchase consideration totaling $339 million ($234 million of which was a current liability) and $292 million ($199 million of which was a current liability), respectively, which was included in "Accounts payable and accrued expenses" and in "Other long-term liabilities" in the accompanying consolidated balance sheets set forth in Item 1 of this Quarterly Report.
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Lastly, as described in Note 14 - Income Per Share and Stockholders' Equity of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report, in November 2024, our Board of Directors (Board) authorized an additional $5.0 billion to our existing $4.0 billion share repurchase program (as amended, the 2024 program) bringing the total authorized amount under the 2024 program to a total of $9.0 billion as of September 30, 2025. The Board also extended the term of the 2024 program through December 31, 2029.
We did not repurchase any shares of our common stock during the three months ended September 30, 2025 under the 2024 program. During the nine months ended September 30, 2025, we repurchased 5,185,163 shares of our common stock with an average price of $127.82 per share for an aggregate of $663 million under the 2024 program. As of September 30, 2025, we had $5.2 billion of capacity remaining under the 2024 program.
Our stock repurchases have been funded with cash on hand and we intend to continue funding future repurchases with existing cash. We may utilize our stock repurchase programs to continue offsetting the impact of our stock-based compensation program and on a more opportunistic basis if we believe our stock presents a compelling investment compared to other discretionary uses. The timing of any future repurchases and the actual amounts repurchased will depend on a variety of factors, including the market price of our common stock, general market and economic conditions and other factors.
Historical Cash Flows
Operating Activities
Net cash provided by operating activities totaled $338 million for the nine months ended September 30, 2025 as compared to net cash provided by operating activities of $368 million during the nine months ended September 30, 2024. The primary drivers that contributed to the decreasein net cash provided by operating activities were as follows: working capital movements, driven by timing of cash receipts and payment to vendors, partially offset by higher cash flows from earnings, driven by revenue growth.
Investing Activities
Net cash used in investing activities totaled $664 million for the nine months ended September 30, 2025 as compared to net cash used in investing activities of $1,494 million during the nine months ended September 30, 2024, a decrease of $830 million. The decrease was primarily due to lower cash outflows from acquisitions in the current period (primarily consisting of the acquisition of Industrious), compared to the prior period when we acquired J&J Worldwide Services and Direct Line.
Financing Activities
Net cash provided by financing activities totaled $832 million for the nine months ended September 30, 2025 as compared to $927 million for the nine months ended September 30, 2024. The decreased cash inflow was primarily driven by cash paid to repurchase common stock in the nine months ended September 30, 2025, offset by net proceeds from the issuance of long-term debt in the current period, compared to the prior period.
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Indebtedness
We use a variety of financing arrangements, both long-term and short-term, to fund our operations in addition to cash generated from operating activities. We also use several funding sources to avoid becoming overly dependent on one financing source, and to lower funding costs.
Long-Term Debt
On July 10, 2023, CBRE Group, Inc., CBRE Services, Inc. (CBRE Services) and Relam Amsterdam Holdings B.V., a wholly-owned subsidiary of CBRE Services (Relam Borrower), entered into a new 5-year senior unsecured Credit Agreement (2023 Credit Agreement) maturing on July 10, 2028, which refinanced and replaced the previous credit agreement. The 2023 Credit Agreement provides for a senior unsecured term loan credit facility comprised of (i) tranche A Euro-denominated term loans in an aggregate principal amount of €367 million (Tranche A (Euro) Loans) and (ii) tranche A U.S. Dollar-denominated term loans in an aggregate principal amount of $350 million (Tranche A (USD) Loans) with weighted average interest rate of 4.0% as of September 30, 2025, both requiring quarterly principal payments beginning on December 31, 2024 and continuing through maturity on July 10, 2028. The proceeds of these term loans under the 2023 Credit Agreement were applied to the repayment of all remaining outstanding senior term loans, approximately $437 million, under the previous credit agreement, the payment of related fees and expenses and other general corporate purposes.
On March 13, 2025, CBRE Group, Inc., CBRE Services and Relam Borrower entered into Amendment No. 1 to the 2023 Credit Agreement, which provided for, among other things, the ability of Relam Borrower to obtain incremental commitments and loans under the 2023 Credit Agreement in an aggregate principal amount of $750 million (or the Euro equivalent). On March 14, 2025, CBRE Group, Inc., CBRE Services and Relam Borrower entered into Amendment No. 2 and Incremental Assumption Agreement to the 2023 Credit Agreement, pursuant to which Relam Borrower incurred incremental term loans (i) denominated in Euros in the aggregate principal amount of €425 million (Incremental Euro Term Loans) and (ii) denominated in U.S. Dollars in the aggregate principal amount of $125 million (Incremental USD Term Loans). The Incremental Euro Term Loans have the same terms applicable to, and constitute the same class as, the Tranche A (Euro) Loans, and the Incremental USD Term Loans have the same terms applicable to, and constitute the same class as, the Tranche A (USD) Loans under the 2023 Credit Agreement. The proceeds of the Incremental Euro Term Loans and the Incremental USD Term Loans were used for working capital and other general corporate purposes (including the partial repayment of borrowings under the commercial paper program) and to pay fees and expenses incurred in connection with entering into the amendments to the 2023 Credit Agreement. On June 24, 2025, CBRE Group, Inc., CBRE Services and Relam Borrower entered into Amendment No. 3 to the 2023 Credit Agreement, for the purpose of, among other things, amending the financial covenants to remove the interest coverage ratio covenant and to increase certain baskets and thresholds in the 2023 Credit Agreement in a manner consistent with the terms of the Revolving Credit Agreements described below.
The term loan borrowings under the 2023 Credit Agreement are fully and unconditionally guaranteed on a senior basis by CBRE Group, Inc. and CBRE Services.
On May 12, 2025, CBRE Services issued $600 million in aggregate principal amount of 4.800% senior notes due June 15, 2030 (the 4.800% senior notes) at a price equal to 99.065% of their face value. The 4.800% senior notes are unsecured obligations of CBRE Services and are guaranteed on a senior basis by CBRE Group, Inc. Interest accrues at a rate of 4.800% per year and is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2025.
On May 12, 2025, CBRE Services issued $500 million in aggregate principal amount of 5.500% senior notes due June 15, 2035 (the 2035 5.500% senior notes) at a price equal to 99.549% of their face value. The 2035 5.500% senior notes are unsecured obligations of CBRE Services and are guaranteed on a senior basis by CBRE Group, Inc. Interest accrues at a rate of 5.500% per year and is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2025.
On February 23, 2024, CBRE Services issued $500 million in aggregate principal amount of 5.500% senior notes due April 1, 2029 (the 2029 5.500% senior notes) at a price equal to 99.837% of their face value. The 2029 5.500% senior notes are unsecured obligations of CBRE Services and are guaranteed on a senior basis by CBRE Group, Inc. Interest accrues at a rate of 5.500% per year and is payable semi-annually in arrears on April 1 and October 1 of each year.
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On June 23, 2023, CBRE Services issued $1.0 billion in aggregate principal amount of 5.950% senior notes due August 15, 2034 (the 5.950% senior notes) at a price equal to 98.174% of their face value. The 5.950% senior notes are unsecured obligations of CBRE Services and are guaranteed on a senior basis by CBRE Group, Inc. Interest accrues at a rate of 5.950% per year and is payable semi-annually in arrears on February 15 and August 15 of each year.
On March 18, 2021, CBRE Services issued $500 million in aggregate principal amount of 2.500% senior notes due April 1, 2031 (the 2.500% senior notes) at a price equal to 98.451% of their face value. The 2.500% senior notes are unsecured obligations of CBRE Services and are guaranteed on a senior basis by CBRE Group, Inc. Interest accrues at a rate of 2.500% per year and is payable semi-annually in arrears on April 1 and October 1 of each year.
On August 13, 2015, CBRE Services issued $600 million in aggregate principal amount of 4.875% senior notes due March 1, 2026 (the 4.875% senior notes) at a price equal to 99.24% of their face value. We redeemed these notes in full on May 28, 2025. This redemption was funded using net proceeds from the offering of our 4.800% senior notes and 2035 5.500% senior notes.
The indentures governing our outstanding senior notes described above contain restrictive covenants that, among other things, limit our ability to create or permit liens on assets securing indebtedness, enter into sale/leaseback transactions and enter into consolidations or mergers.
Our senior notes are fully and unconditionally guaranteed by CBRE Group, Inc.
Combined summarized financial information for CBRE Group, Inc. (parent) and CBRE Services (subsidiary issuer) is as follows (dollars in millions):
September 30, 2025 December 31, 2024
Balance Sheet Data:
Current assets $ 25 $ 29
Non-current assets 1,752 1,730
Total assets $ 1,777 $ 1,759
Current liabilities $ 1,142 $ 1,072
Non-current liabilities (1)
11,047 11,506
Total liabilities (1)
$ 12,189 $ 12,578
Nine Months Ended
September 30,
2025 2024
Statement of Operations Data:
Revenue $ - $ -
Operating loss (4) (2)
Net loss $ (305) $ (115)
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(1)Includes $7.9 billion and $8.9 billion of intercompany loan payables to non-guarantor subsidiaries as of September 30, 2025 and December 31, 2024, respectively. All intercompany balances and transactions between CBRE Group, Inc. and CBRE Services have been eliminated.
For additional information on all of our long-term debt, see Note 11 - Long-Term Debt and Short-Term Borrowings of the Notes to Consolidated Financial Statements set forth in Item 8 included in our 2024 Annual Reportand Note 10 - Long-Term Debt and Short-Term Borrowings of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.
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Short-Term Borrowings
On June 24, 2025, we entered into a new 5-year senior unsecured Revolving Credit Agreement (the 5-Year Revolving Credit Agreement) which replaced our prior revolving credit agreement dated August 5, 2022. The 5-Year Revolving Credit Agreement provides for a senior unsecured revolving credit facility available to CBRE Services with commitments in an aggregate principal amount of up to $3.5 billion and a maturity date of June 24, 2030.
The 5-Year Revolving Credit Agreement requires us to pay a fee based on the total amount of the revolving credit facility commitment (whether used or unused). In addition, the 5-Year Revolving Credit Agreement also includes capacity for letters of credit not to exceed $300 million in the aggregate and capacity for swingline loans not to exceed $300 million in the aggregate. The 5-Year Revolving Credit Agreement is fully and unconditionally guaranteed by CBRE Group, Inc.
As of September 30, 2025, no amount was outstanding under the revolving credit facility provided for by the 5-Year Revolving Credit Agreement. $61 million of letters of credit were outstanding as of September 30, 2025. Letters of credit are issued in the ordinary course of business and would reduce the amount we may borrow under this revolving credit facility. As of December 31, 2024, $132 million was outstanding under our prior revolving credit facility. No letters of credit were outstanding as of December 31, 2024.
On June 24, 2025, we entered into a new 364-day senior unsecured Revolving Credit Agreement (the 364-Day Revolving Credit Agreement, and together with the 5-Year Revolving Credit Agreement, the Revolving Credit Agreements). The 364-Day Revolving Credit Agreement provides for a senior unsecured revolving credit facility available to CBRE Services with commitments in an aggregate principal amount of up to $1.0 billion and a maturity date of June 23, 2026.
The 364-Day Revolving Credit Agreement requires us to pay a fee based on the total amount of the revolving credit facility commitment (whether used or unused). The 364-Day Revolving Credit Agreement is fully and unconditionally guaranteed by CBRE Group, Inc.
As of September 30, 2025, no amount was outstanding under the revolving credit facility provided for by the 364-Day Revolving Credit Agreement.
On December 2, 2024, CBRE Services established a commercial paper program pursuant to which we may issue and sell up to $3.5 billion of short-term, unsecured and unsubordinated commercial paper notes with up to 397-day maturities, under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. Payment of the commercial paper notes is guaranteed on an unsecured and unsubordinated basis by CBRE Group, Inc. The program notes and the guarantee will rank pari passu with all other unsecured and unsubordinated indebtedness. The proceeds from issuances under the program may be used for general corporate purposes. The company intends to maintain available commitments under the Revolving Credit Agreement in an amount at least equal to the amount of commercial paper notes outstanding from time to time. As of September 30, 2025, we had $1.1 billion in outstanding borrowings under the commercial paper program with a weighted average annual interest rate of 4.34%. As of October 20, 2025 and December 31, 2024, we had $1.0 billion and $175 million, respectively, in outstanding borrowings under the commercial paper program.
In addition, Turner & Townsend maintains a £120 million revolving credit facility pursuant to a credit agreement dated March 31, 2022, with an additional accordion option of £20 million, that matures on March 31, 2027. As of September 30, 2025, no amount was outstanding under this revolving credit facility. As of December 31, 2024, $44 million (£35 million) was outstanding under this revolving credit facility.
For additional information on all of our short-term borrowings, see Note 5 - Warehouse Receivables & Warehouse Lines of Credit and Note 11 - Long-Term Debt and Short-Term Borrowings of the Notes to Consolidated Financial Statements set forth in Item 8 included in our 2024 Annual Reportand Note 4 - Warehouse Receivables & Warehouse Lines of Credit and Note 10 - Long-Term Debt and Short-Term Borrowings of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.
We also maintain warehouse lines of credit with certain third-party lenders. See Note 4 - Warehouse Receivables & Warehouse Lines of Credit of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.
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Off -Balance Sheet Arrangements
We do not have off-balance sheet arrangements that we believe could have a material current or future impact on our financial condition, liquidity or results of operations. Our off-balance sheet arrangements are described in Note 12 - Commitments and Contingencies of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report and are incorporated by reference herein.
Critical Accounting Policies and Estimates
Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, which require us to make estimates and assumptions that affect reported amounts. The estimates and assumptions are based on historical experience and on other factors that we believe to be reasonable. Actual results may differ from those estimates. We believe that the following critical accounting policies represent the areas where more significant judgments and estimates are used in the preparation of our consolidated financial statements. A discussion of such critical accounting policies, which include revenue recognition, business combinations, goodwill and other intangible assets, income taxes, contingencies, and investments in unconsolidated subsidiaries - fair value option can be found in our 2024 Annual Report. There have been no material changes to these policies and estimates as of September 30, 2025.
New Accounting Pronouncements
See Note 2 - New Accounting Pronouncements of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.
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Non-GAAP Financial Measures
Core EBITDA are not recognized measurements under accounting principles generally accepted in the United States, or GAAP. When analyzing our operating performance, investors should use these measures in addition to, and not as an alternative for, their most directly comparable financial measure calculated and presented in accordance with GAAP. We generally use these non-GAAP financial measures to evaluate operating performance and for other discretionary purposes. We believe these measures provide a more complete understanding of ongoing operations, enhance comparability of current results to prior periods and may be useful for investors to analyze our financial performance because they eliminate the impact of selected costs and charges that may obscure the underlying performance of our business and related trends. Because not all companies use identical calculations, our presentation of core EBITDA may not be comparable to similarly titled measures of other companies.
We use core EBITDA as an indicator of the company's ongoing operating financial performance. Core EBITDA represents earnings before depreciation and amortization, net interest expense and income taxes, further adjusted for the following items:
•write-off of financing costs on extinguished debt,
•integration and other costs related to acquisitions,
•carried interest incentive compensation expense (reversal) to align with the timing of associated revenue,
•charges related to indirect tax audits and settlements,
•net results related to the wind-down of certain businesses,
•the impact of fair value adjustments related to unconsolidated equity investments,
•business and finance transformation,
•efficiency and cost-reduction initiatives,
•costs incurred related to legal entity restructuring,
•net fair value adjustments on strategic non-core investments, and
•provision associated with Telford's fire safety remediation efforts.
We believe that investors may find these measures useful in evaluating our operating performance compared to that of other companies because their calculations generally eliminate the effects of acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions, the effects of financing and income taxes and the accounting effects of capital spending.
Core EBITDA is not intended to be a measure of free cash flow for our discretionary use because it does not consider certain cash requirements such as tax and debt service payments. This measure may also differ from the amounts calculated under similarly titled definitions in our credit facilities and debt instruments, which are further adjusted to reflect certain other cash and non-cash charges and are used by us to determine compliance with financial covenants therein and our ability to engage in certain activities, such as incurring additional debt. We also use core EBITDA as a significant component when measuring our operating performance under our employee incentive compensation programs.
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Core EBITDA is calculated as follows (dollars in millions):
Three Months Ended
September 30, 		Nine Months Ended
September 30,
2025 2024 2025 2024
Net income attributable to CBRE Group, Inc. $ 363 $ 225 $ 741 $ 481
Net income attributable to non-controlling interests 33 20 86 54
Net income 396 245 827 535
Adjustments:
Depreciation and amortization 181 178 540 497
Interest expense, net of interest income 50 64 159 163
Write-off of financing costs on extinguished debt - - 2 -
Provision for income taxes 91 67 203 70
Integration and other costs related to acquisitions
60 22 204 30
Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue 3 (4) 10 12
Charges related to indirect tax audits and settlements - 25 (1) 39
Net results related to the wind-down of certain businesses (1)
30 - 44 -
Impact of fair value non-cash adjustments related to unconsolidated equity investments - 9 2 9
Business and finance transformation 10 - 38 -
Costs associated with efficiency and cost-reduction initiatives - 41 13 137
Costs incurred related to legal entity restructuring - - - 2
Net fair value adjustments on strategic non-core investments - 8 (22) 91
Provision associated with Telford's fire safety remediation efforts - 33 - 33
Core EBITDA $ 821 $ 688 $ 2,019 $ 1,618
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(1) In the first quarter of 2025, management made the decision to wind down Telford Homes' legacy construction business. A new Telford entity, Telford Living, is developing residential housing in the U.K. under a new business model under which the company does not self-perform general contracting. In the third quarter of 2025, management made the decision to wind down certain businesses within the BOE Segment.
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Cautionary Note on Forward-Looking Statements
This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The words "anticipate," "believe," "could," "should," "propose," "continue," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "forecast," "target," and similar terms and phrases are used in this Quarterly Report to identify forward-looking statements. Except for historical information contained herein, the matters addressed in this Quarterly Report are forward-looking statements. These statements relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies.
These forward-looking statements are made based on our management's expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. These uncertainties and factors could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements.
The following factors are among those, but are not only those, that may cause actual results to differ materially from the forward-looking statements:
•disruptions in general economic, political and regulatory conditions and significant public health events, particularly in geographies or industry sectors where our business may be concentrated;
•volatility or adverse developments in the securities, capital or credit markets, interest rate increases and conditions affecting the value of real estate assets, inside and outside the U.S.;
•poor performance of real estate investments or other conditions that negatively impact clients' willingness to make real estate or long-term contractual commitments and the cost and availability of capital for investment in real estate;
•foreign currency fluctuations and changes in currency restrictions, trade sanctions and import/export and transfer pricing rules;
•our ability to compete globally, or in specific geographic markets or business segments that are material to us;
•our ability to identify, acquire and integrate accretive businesses;
•costs and potential future capital requirements relating to businesses we may acquire;
•integration challenges arising out of companies we may acquire;
•increases in unemployment and general slowdowns in economic and commercial activity;
•trends in pricing and risk assumption for commercial real estate services;
•the effect of significant changes in capitalization rates across different property types;
•a reduction by companies in their reliance on outsourcing for their commercial real estate needs, which would affect our revenues and operating performance;
•client actions to restrain project spending and reduce outsourced staffing levels;
•our ability to further diversify our revenue model to offset cyclical economic trends in the commercial real estate industry;
•our ability to attract new user and investor clients;
•our ability to retain major clients and renew related contracts;
•our ability to leverage our global services platform to maximize and sustain long-term cash flow;
•our ability to continue investing in our platform and client service offerings;
•our ability to maintain expense discipline;
•the emergence of disruptive business models and technologies;
•negative publicity or harm to our brand and reputation;
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•the failure by third parties to comply with service level agreements or regulatory or legal requirements;
•the ability of our investment management business to maintain and grow assets under management and achieve desired investment returns for our investors, and any potential related litigation, liabilities or reputational harm possible if we fail to do so;
•our ability to manage fluctuations in net earnings and cash flow, which could result from poor performance in our investment programs, including our participation as a principal in real estate investments;
•the ability of our indirect wholly-owned subsidiary CBRE Capital Markets to periodically amend, or replace, on satisfactory terms, the agreements for its warehouse lines of credit;
•declines in lending activity of U.S. Government Sponsored Enterprises, regulatory oversight of such activity and our mortgage servicing revenue from the commercial real estate mortgage market;
•changes in U.S. and international law and regulatory environments (including relating to anti-corruption, anti-money laundering, trade sanctions, tariffs, currency controls and other trade control laws), particularly in Asia, Africa, Russia, Eastern Europe and the Middle East, due to the level of political instability in those regions;
•litigation and its financial and reputational risks to us;
•our exposure to liabilities in connection with real estate advisory and property management activities and our ability to procure sufficient insurance coverage on acceptable terms;
•our ability to retain, attract and incentivize key personnel;
•our ability to manage organizational challenges associated with our size;
•liabilities under guarantees, or for construction defects, that we incur in our development services business;
•our leverage under our debt instruments as well as the limited restrictions therein on our ability to incur additional debt, and the potential increased borrowing costs to us from a credit-ratings downgrade;
•our and our employees' ability to execute on, and adapt to, information technology strategies and trends;
•cybersecurity threats or other threats to our information technology networks, including the potential misappropriation of assets or sensitive information, corruption of data or operational disruption;
•our ability to comply with laws and regulations related to our global operations, including real estate licensure, tax, labor and employment laws and regulations, fire and safety building requirements and regulations, as well as data privacy and protection regulations, sustainability matters, and the anti-corruption laws and trade sanctions of the U.S. and other countries;
•changes in applicable tax or accounting requirements;
•any inability for us to implement and maintain effective internal controls over financial reporting;
•the effect of implementation of new accounting rules and standards or the impairment of our goodwill and intangible assets;
•the performance of our equity investments in companies we do not control; and
•the other factors described elsewhere in this Quarterly Report on Form 10-Q, included under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates," "Quantitative and Qualitative Disclosures About Market Risk" and Part II, Item 1A, "Risk Factors" or as described in our 2024 Annual Report, in particular in Part I, Item 1A "Risk Factors", or as described in the other documents and reports we file with the Securities and Exchange Commission (SEC).
Forward-looking statements speak only as of the date the statements are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Additional information concerning these and other risks and uncertainties is contained in our other periodic filings with the SEC.
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Investors and others should note that we routinely announce financial and other material information using our Investor Relations website (https://ir.cbre.com), SEC filings, press releases, public conference calls and webcasts. We use these channels of distribution to communicate with our investors and members of the public about our company, our services and other items of interest. Information contained on our website is not part of this Quarterly Report or our other filings with the SEC.
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CBRE Group Inc. published this content on October 23, 2025, and is solely responsible for the information contained herein. Distributed via EDGAR on October 23, 2025 at 20:48 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]