Colliers International Q1 2026 Earnings Call - CRE Transaction Services Surge 25% as Capital Markets Recovery Gains Momentum

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: Welcome to the Colliers International 1st quarter investors conference call. Today’s call is being recorded. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance, or achievements when you play it in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the company’s annual information form as filed with the Canadian Securities Administrators and in the company’s annual report on Form 40-F, as filed with the U.S. Securities and Exchange Commission. As a reminder, today’s call is being recorded. Today is Tuesday, May 5, 2026.

At this time, for opening remarks and introductions, I would like to turn the call over to the Global Chairman and Chief Executive Officer, Mr. Jay Hennick. Please go ahead, sir.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: Thank you for joining us. With me today is Christian Mayer, our Global Chief Financial Officer and also Chief Executive Officer of our Commercial Real Estate division. This call, as always, is being webcast, and the presentation materials are available on our website. Colliers delivered strong results for 2026 for the first quarter, underscoring the durability of our company. We have made solid progress in a still uneven market, supported by continued strength in our resilient businesses and improving activity in commercial real estate. Colliers is built to compound shareholder value through 3 growth engines across the built environment: commercial real estate, engineering and project management, and investment management. From an earnings perspective, more than 70% of our earnings come from resilient businesses, engineering, project management, investment management, property management, and mortgage servicing.

This mix gives Colliers greater stability through market cycles and more growth opportunity than others. These attributes, together with our enterprising culture and meaningful inside ownership, have supported a 31-year record of delivering 17% compound annual growth in per share value. Importantly, we achieve these performance numbers at a time when our shares are trading well below their intrinsic value, creating significant upside potential for shareholders. During the quarter, we strengthened our leadership team to better capture growth opportunities in engineering, appointing Elias Mulamoottil as the CEO and Christian as the CEO of our commercial real estate business. We also increased our financial flexibility through a $400 million long-term debt financing and an extension of our revolving credit facility supporting the acquisition of Ayesa Engineering, which we expect to close later this quarter. In commercial real estate, the recovery continues to gain momentum.

Transaction services, including both capital markets and leasing, were up an industry-leading 25%, reflecting market share gains across the globe for Colliers and improved investor sentiment industry-wide. Engineering also delivered strong performance, providing highly technical support across attractive end markets like infrastructure, transportation, property and buildings, water, and environmental. This work also has strong visibility and consistent margins while creating meaningful opportunities for growth and for collaboration across our other businesses. The acquisition of Ayesa will accelerate our momentum in engineering even further by expanding our geographic reach, adding in-demand capabilities, and extending our growth runway into new markets. In investment management, assets under management increased 9% year over year to almost $1.9 billion.

At Harrison Street, we invest capital along institutional and high net worth individuals across high growth infrastructure-related assets, including data centers as well as demographic-driven defensive sectors such as senior housing, student housing, medical office, and healthcare delivery. Over more than two decades, our differentiated investment strategies have delivered strong returns for investors and are supported by powerful secular and demographic tailwinds that continue to support our growth. We are very excited about Harrison Street’s prospects as we continue to scale the business and capitalize on the many opportunities ahead. We believe we are well-positioned to continue to generate attractive growth opportunities for our investors and for our shareholders. With that, I’ll turn things over to Christian, after which we’ll open the line for questions. Christian?

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Good morning, everyone. Following up on Jay’s overview of our strategic progress this quarter, I will now dive into the financial details that support our strong start to 2026. Please note that the non-GAAP measures discussed are defined in our press release and quarterly presentation. Unless otherwise noted, all revenue growth figures are presented in local currency. We have realigned our engineering and Commercial Real Estate segments. This realignment resulted in a modest increase in CRE segment revenue with an offsetting decrease in the engineering segment. Prior periods have been recast, and a historical comparative Excel file is available on our investor relations site. Our 1st quarter consolidated revenues were up 12%. Net revenues also increased 12% to $1.15 billion. Adjusted EBITDA was $125 million, up 8%.

Adjusted EPS increased 5% to $0.91 and was tempered by a higher than expected tax rate related to certain European operations. We expect our tax rate to moderate in the coming quarters. The solid performance met our expectations and reflects effective execution across our business. first quarter commercial real estate segment net revenue is up 13%. Capital markets revenues increased 43%, led by market share gains in the U.S. and in parts of Europe, both in sales and debt finance. We reported sales growth in all property types, but most notably data center development land and office. The U.K., Germany, and Japan also posted strong year-over-year gains in office and industrial sales. Leasing revenues were up 9% with U.S. industrial property leading the growth.

Segment net margin was 6.3%, up 20 basis points over the prior year first quarter with operating leverage from higher transactional revenues, partially offset by investment in recruiting across the segments. First quarter engineering segment net revenue was up 13% from a mix of recent acquisitions and solid internal growth. End market demand continues to be strong, especially in infrastructure and related areas. Net margin was 9.5%, slightly lower than last year, reflecting lower workforce utilization in residential development and telecommunications, both of which we expect will improve as we progress through the year. Our overall engineering backlog continues to be robust. Investment management net revenues increased 8%, driven by a recent acquisition and internal growth from new capital deployed.

Net margin declined to 37.4% as expected as a result of planned investments to integrate and streamline under the Harrison Street Asset Management brand. These costs will continue to impact margins for the next couple of quarters, after which we expect to return to a low 40s net margin profile. The IM segment raised just under $1 billion in new capital commitments during the first quarter. We expect increasing momentum as the year progresses. Our fundraising target for 2026 remains unchanged at $6 billion-$9 billion. Our balance sheet is strong with leverage at 2.3x reflecting seasonal working capital usage and with $1.5 billion in total credit availability as of March 31st. We expect to complete the acquisition of Ayesa Engineering in the coming weeks, funded from available credit.

We are maintaining our full year 2026 outlook for mid-teens revenue, EBITDA, and EPS growth. Our solid Q1 performance, which met our expectations, is the foundation for this outlook. Our continued confidence stems from robust pipelines in commercial real estate transactions and sustained momentum in our resilient businesses. While we acknowledge the recent increases in geopolitical risk and macroeconomic volatility, these risks are not expected to materially impact our 2026 results at this point, reflecting the inherent geographic service line and client diversification of our platform. That concludes my remarks. Operator, can you please open the line for questions?

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you wish to ask a question, you may press star one on your telephone keypad. Should you wish to cancel your request, you may press star two. Once again, that is star one should you wish to ask a question. Our first question is from Anthony Paolone from J.P. Morgan. Your line is now open.

Anthony Paolone, Analyst, J.P. Morgan: Great. Thanks. Good morning. My first question relates to, I think in engineering, some of the utilization being down a little bit, and I think you mentioned it was related to residential. Can you just talk a bit more as to whether you see that as temporary and how you manage margin in instances where some of these end markets may ebb and flow? Just maybe give us a little bit more insight into how that business works in that manner.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Yeah, it’s a great question, Tony. We have a well diversified engineering business that currently operates in three major markets, Canada, the U.S., and Australia. In each country, we have a number of highly predictable and high demand end markets, including infrastructure, transportation, property, buildings, resi development, telecommunications, program management, institutional project management. A wide variety of end users and that is intentional. We try to also have a well-balanced business between public and private sector clientele so that we can manage ebbs and flows, like we are seeing today in residential development and in telecom. We manage the business for consistency in margins from time to time.

A couple of these areas will be stronger or weaker, and over time, we’re able to generate a consistent margin. We do expect that these two areas will rebound in the coming quarters.

Anthony Paolone, Analyst, J.P. Morgan: Okay. Thanks. My follow-up question relates to you all mentioning making some investments into the CRE segment. Can you talk more specifically about, you know, what types of investments those may be, whether it’s people or other types of items, and, you know, kind of where you see the opportunity in making those investments?

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Yeah. Tony, there’s really two areas, and you hit the nail on the head. It’s people first and foremost. We continue to recruit at an accelerating pace and bring new people into our Cap Markets and leasing business in major markets around the world. That’s the primary focus. Secondarily, and we’ve talked about this before, we are increasing the pace of our IT spending, both OpEx and CapEx. That is to enable AI and technology, and efficiencies are gonna come from that, as well as enhanced abilities for our producers to be of service to clients and hopefully more productive. You know, those are the areas that we’re investing in.

Anthony Paolone, Analyst, J.P. Morgan: Okay. Thank you.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: Thank you. Our next question is from Frederic Bastien from Raymond James. Your line is now open.

Frederic Bastien, Analyst, Raymond James: Good morning, everybody. We had some pretty solid results from the CRE segment. However, outsourcing growth was a bit on the soft side. Was there any tough comparables that you were lapping? Just wanna get a bit more color on what transpired here.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Frederic, no real, notable, tough compares. We had, you know, slightly slower than we had hoped growth there, still in the low single digits, but, you know, nothing really of note. We hope on a full year basis that our growth will accelerate in that outsourcing area.

Frederic Bastien, Analyst, Raymond James: Okay. Thanks. Switching gears to investment management. We saw some pretty good growth, obviously some acquired growth in there as well. As we look at the next couple quarters, how can we expect the pace of revenue to ramp both on organic basis, fundraising, acquisition, and the like? Thank you.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: IM is very interesting because as you know, we have spent the last couple quarters, and it is going to continue for a while, bringing together our four platforms under the Harrison Street brand. Needless to say, that has a lot to do with bringing people together, rebranding funds, streamlining accounting systems across the board, IT, and a variety of other areas. We are very excited about that particular platform. It has some great momentum. First of all, it has unique and strong, differentiated strategies as I talked about in my comments. Fundraising in particular is gaining momentum as Christian mentioned. We are holding our forecast at $6+ billion of new capital.

We’ve also returned a lot of capital this past quarter to our investors in terms of property sales versus new assets acquired. There’s a lot going on in that segment. We’re building what we think is a very strong Harrison Street Asset Management, that’s a truly global business with a streamlined and one management team. These things take time and building companies like this is something that we’ve done many times over the years. We feel like we’re on pace or ahead. We feel like we’re walking into a fundraising environment that should be more buoyant going forward.

The teams are excited, and we have several new strategies all around infrastructure and deep relationships that we built with leading academic institutions, hospitals, all of which we have been serving for over two decades. Now new opportunities and P3 partnerships and a variety of other things are materializing, which are creating unique investment opportunities for our investors. A lot there to unpack, but, you know, suffice it to say, we’re very excited about where IM will be in the next several quarters.

Frederic Bastien, Analyst, Raymond James: Great. Last one, maybe a follow-up. With respect to the pace of fundraising, do you expect it to be even over the next quarters or just more ramp up more into the back half of the year?

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: I’m sorry. I didn’t hear that full question there, Frederic.

Frederic Bastien, Analyst, Raymond James: Yeah. With respect to the pace of fundraising, do you expect that to come evenly over the next quarter or be more back-end loaded towards the back of the year?

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: It never comes evenly. It’s as you can appreciate, it is quite unpredictable. We have bigger pipelines in terms of fundraising than we’ve ever had before. We’ve had good first closes or we’re in the process of having first closes in the Basalt Fund, in the Harrison Street closed-end fund, all of which there’s only a limited amount of capital we can take. It’s a function of when the final decisions are made and when that comes in. We’re expecting both of those to be substantially completed before the end of the year. When the exact commitments are made is still up in the air a bit, and will be. You can’t really predict it.

Frederic Bastien, Analyst, Raymond James: Okay. Thanks, Jay. Appreciate the call.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: Thank you. Our next question is from Erin Kyle from CIBC Capital Markets. Your line is now open.

Erin Kyle, Analyst, CIBC Capital Markets: Hi. Good morning. Thanks for taking the questions. Maybe just a follow-up to that last one on the fundraising environment. Jay, I appreciate your comments around the unpredictability of the fundraising quarter to quarter. Maybe on that note, what gives you confidence on the trajectory towards that $6 billion-$9 billion in 2026? Maybe you have an idea of how much advanced fundraising is already soft-circled or in discussions and how that compares right now versus to where it did yeah, last year.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: Well, for sure, it’s way ahead of last year. The confidence that we have is that we have new strategies in the marketplace this year, which we didn’t have last year. We were completing our investment cycle in several of the funds last year. This year we’re open with new funds and new investment opportunities. There’s a lot of investors looking at some of the unique Harrison Street products. You know, infrastructure is all the rage, as you know. Everybody is talking about data centers. That’s a significant part of our business. I think we own 64. We’ve been in the data center business at Harrison Street for six years now. This is a well-worn path for us.

In fact, we’re considering in a couple of cases, selling assets early, because of the heat to buy data center assets. Our infrastructure doesn’t end with data centers. There’s all kinds of other infrastructure-related assets, long-term investment opportunities that are a part of our open-ended funds, new opportunities in our closed-ended funds. There’s some separate investments that our teams are making. Of course, you know, let’s go back to the demographically driven assets that we have in seniors, students, healthcare delivery, all of which have huge tailwinds. One of the great things about this platform is that we have designed it to focus on a specific group of assets that have these tailwinds.

That’s what’s giving us the confidence that our results have been very good over decades. All of that gives us confidence that this will be a strong year for us, fundraising-wise. You know, we hope that we’ll raise more money than the range that we give you, that we’ve given you. We are optimistic.

Erin Kyle, Analyst, CIBC Capital Markets: Thank you. That is a lot of helpful color there. Maybe I’ll switch gears to the commercial real estate business. The capital markets growth was exceptionally strong this quarter. You’re lapping a weaker comparative period, but are you able to identify, like, how much of that growth reflects pent-up demand versus a sustained improvement in buyer confidence here?

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: Erin, you know, we watch our capital markets business very carefully. I believe this is our seventh quarter of capital markets growth on a quarter-over-quarter basis. You know, the conditions for transacting continue to improve.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Credit availability, bid-ask spreads, the desire of our clients and market participants to transact is improving because they see more transactions happening, which gives more confidence to investors as well as to sellers. You know, nothing really in particular to note this quarter, but it is a continuation of this multi-quarter recovery in capital markets activity that, you know, we think we’re in the early to mid-innings of a recovery. We have a couple of years at least, you know, to go to recover to prior peak transaction levels. I’d say we also have today a bigger, stronger, more productive producer workforce in our capital markets business than we ever have had in the past. We’re feeling really positive.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: I would underline a comment that I made. You know, 45% in capital markets growth was significant, but when you take it together with our transactions, we were at 25% between leasing and capital markets. We were industry-leading. That’s very telling, when you consider the other players in the industry on a global basis.

Erin Kyle, Analyst, CIBC Capital Markets: Thank you. I’ll pass the line.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: Thank you. Our next question is from Nevan Yochim from BMO Capital Markets.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International1: Thanks. Good morning, guys. Nevan on for Stephen today. You provided a little bit of color so far on the outsourcing segment, but I was hoping you could just touch on your expectations for growth and capital markets as well as leasing for 2026 and how that’s expected to trend through the year.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Sure, Nevan. You know, obviously, we talked about the strong growth in our transaction business in the first quarter. I would expect that to continue on a full year basis. You know, capital markets growth on a full year basis somewhere in the 25% range. You know, leasing in the 8% range or so on a full year basis. Rounding out our commercial real estate business, outsourcing, growing in the 5% range on a full year basis. You know, continuing to see strong growth, not necessarily, you know, at rates that we saw in the first quarter, which is the seasonal slow quarter.

Growth there can lead to higher % numbers, but certainly on a full year basis looking, very solid right now.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International1: Great. Thanks, Christian. You know, we’re seeing a strong recovery here in the capital markets in the CRE business. I’m wondering if you’re able to quantify the remaining upside in a full recovery scenario.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Well, you know, Nevan, I talked about, you know, we’re probably a couple of years away from a full recovery. As I mentioned, we have a bigger, better, stronger, more productive workforce today than we’ve ever had in the past. We’ve been investing heavily into in our debt finance business, capital markets, producers in various specialty asset classes, multifamily being a big area of focus for us, which is a huge market that we have significant opportunity in for growth of market share. You know, we’re, you know, we think we’re going to have, you know, a nice long runway of recovery ahead here and looking to exceed prior high water marks at some point in the next couple of years.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International1: Great. Thanks for taking a stab at that, Christian.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: Thank you. Our next question is from Julien Blouin from Goldman Sachs. Your line is now open.

Julien Blouin, Analyst, Goldman Sachs: Yeah, thank you for taking my question. Just curious, are you seeing any signs of caution in EMEA or APAC? Maybe that decision-making is slowing. One of your peers commented that they were seeing deals being canceled or delayed in Europe due to the geopolitical instability. Just wondering if you’re seeing any of that. How is that sort of working its way into your thoughts about the back half of this year?

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: I think it’s true that Europe and APAC both are slowing. You know, the strength of our results in the first quarter really came from North America, and the North American market continues to do well. You know, we have some insight into, you know, the current quarter as well. Europe is slowing, and we’re watching it very carefully. I think it’s the geopolitical piece is part of it. There’s other reasons as well. There’s not as much access to financing in Europe, which is an opportunity we see long term.

Asia Pac is interesting because you’ve got some markets that are doing very well, and you’ve got other markets that used to do well last year, for example, and all of a sudden they’re just stalled. You know, the beauty of having a global business and strong positions in many markets is you’re geographically diversified. Not too many people talk about geographic diversification, and that creates another, you know, another sort of stable business for us because you’ll have some markets that will exceed and some markets that will be soft. It’ll happen within service lines as well. I mean, you know, there was an earlier question, and I’m expanding your question here a little. There was an earlier question about outsourcing.

What’s happened in some markets, in property management, for example, as developers are running into financial difficulty, they’re deciding that they’re gonna take property management in-house. You know, in our view, it’s, we’ve seen it so many times over the years. They do it for, you know, they do it for a year or two. They realize it’s a very difficult business. It’s a lot of employees to manage over wide geographies. The better way is to have somebody that has a national platform like us to manage nationally and focus on the asset management side. That doesn’t stop some of those property owners to insource property management. There’s those kinds of things that are happening.

If you double-click, and move back a little bit, the geographic diversification is what gives us confidence and strength in this wonderful platform we have called Colliers.

Julien Blouin, Analyst, Goldman Sachs: Thank you. No, that’s really helpful. Maybe latching on to that last point on seeing some insourcing from property owners, do you think at all this is being impacted by AI, that some of them are feeling maybe bolder or more capable, with sort of advancements in AI to go ahead and insource the property management functions?

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: You know, there’s no question. Like we have a massive property management business on a global basis, and there’s no question that AI over time will not only provide us with unique information that will hopefully differentiate us in this business, but also help to streamline back office functions. Property management is a, you know, is a fair margin business. Yes, there’ll be pickup in margin. We’ll be better at what we do. I think you need a major player, like us to be able to invest in the IT platforms necessary to bring better margins. When a small player is insourcing because he thinks AI is gonna enhance his margin, I think is, you know, is a bit naive.

Julien Blouin, Analyst, Goldman Sachs: Great. Thank you, Jay. Very helpful.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: Thank you. Our next question is from Himanshu Gupta from Scotiabank. Your line is now open.

Himanshu Gupta, Analyst, Scotiabank: Thank you. Good morning. I mean, looks like $1 billion of fundraising in Q1. Was it in line with your expectations? Was there any fundraising done in Q2 so far?

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Uh, I mean-

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: Go ahead.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Yeah, Himanshu, we always wanna raise more capital, of course. Our progress in Q1 was good. I guess what gives us more confidence, and it’s the second part of your question, you know, we have had closes here through April, so off to a strong start. Look, we are continuing to focus on the full year fundraise with the products that we have in the market. Our visibility and confidence is high. You know, we raised over $5 billion last year, and we’re very confident we’re gonna raise more than that this year with the work we’ve done in terms of our products and our strategies, as well as our fundraising capabilities, quite frankly.

Himanshu Gupta, Analyst, Scotiabank: Okay. Thank you, Christian. Then within IM, how much private credit exposure do you have you seen any impact so far, you know, in terms of redemptions or any V2 for your business?

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Himanshu, I wanna be very clear on this. We have no corporate credit exposure at all in our business. We provide certain real estate asset-backed credit strategies and products. They’re tied to real estate directly. We’re not, as I mentioned, not participating in any of this corporate type credit or these other troubled areas that you may read about in the news.

Himanshu Gupta, Analyst, Scotiabank: Okay. Thank you so much.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: It’s a small part of it. It’s also a small part of our business. You guys, you can correct me if I’m wrong, but I’m thinking it’s 6% of the AUM.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Yeah, it’d be 8% or 10% of the AUM.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: 8 or 10% of the.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: It’s backed by multifamily real estate, you know, very, you know, primarily, very, strong asset classes with strong underlying cash flows.

Himanshu Gupta, Analyst, Scotiabank: Got it. No redemptions as such, I mean, regarding this exposure.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: No. No. No, exactly.

Himanshu Gupta, Analyst, Scotiabank: Thank you. Moving on. Q4 margins in IM expected to be in low 40% net margin, you mentioned. Is it predicated on you raising this $6 billion-$9 billion of fundraising, or do you think if the fundraising is softer, this margin expectation will be revised down as well?

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Himanshu, our forecast all assembles and fits together. We expect to raise $6 billion-$9 billion to expect to achieve the financial results that we’ve talked about for investment management, including that margin goal. A few things have to happen. Integration is progressing and will continue to progress towards year-end. Fundraising will by year-end lead to higher quarterly revenues, which will give us the visibility going forward in terms of our margin profile.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: Yeah. Just to be clear, you raise capital, and then you have to put it to work. If we raise, you know, our range of capital during the year, and we start to put it to work, it doesn’t pay dividends until the following year. There’ll be some modest pickup, but not material.

Himanshu Gupta, Analyst, Scotiabank: Yeah. That’s a good point. Thanks. Thank you for that. Okay, maybe the last question here on CRE, commercial real estate. Clearly, you know, strong capital markets revenue, strong leasing revenues, as you mentioned. Maybe business did not see much operating leverage in Q1, you know, in terms of incremental margins on incremental revenue. Is that correct?

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Well, we did see some operating leverage, Himanshu, as I mentioned earlier on the call, which was partially offset by our investments in recruiting and in IT infrastructure. I’ll just mention that, again, the Q1 is our seasonal slow quarter in the business. We achieved, you know, a good flow through, and we have a couple of, you know, the things I’ve pointed out, as well as some things like seasonality in our producer mix, that impact the flow through in the quarter. We’re confident that we’ll have higher flow through later in the year as we did last year.

You saw our margins pick up significantly in the third and fourth quarters, and that’ll happen again this year.

Himanshu Gupta, Analyst, Scotiabank: Got it. Thank you. Maybe my final question here. The question is really on synergies. You know, like synergies between engineering and CRE, commercial real estate. Have you identified? Can you know, even quantify? How will they be realized over time? That’s my final question.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Yeah. Himanshu, your question is about synergies between commercial real estate and our engineering business. You know, I think we’ve talked about a couple times over the last few quarters about how our engineers are working with our capital markets professionals to help identify opportunities to qualify, you know, land acquisition, to help with design activities, environmental assessments, property condition assessments. That work, you know, continues in our engineering business and in consultation with our capital markets professionals, and it’s something that is bearing fruit. I don’t have any exact numbers for you at the moment in front of me.

It’s an exciting, you know, additional avenue to differentiate ourselves and provide additional value to our clients, including some of our largest clients.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: I mean, let me just add some obvious ones. We’ve talked about it on previous calls. You know, if a client wants to assemble land, whether they wanna build a multifamily development, a data center, et cetera, et cetera, our CRE professionals know the land business, know where the opportunities are. They bring it forward. We are selling to our clients, not only will we find the land, but we’ll also entitle it, and that’s where the engineers start getting involved. Roads, power sources, water, a variety of other things. The client makes a decision. Do you wanna buy the land based on the engineering information? If they do buy the land, we then go into what can be built.

We can project manage the construction of the project and deliver it at the end of the day. Frankly, our investment management team is also looking at opportunities to invest in some of those, some of those applications. More and more, our complementary services are working more closely together to either find, finance, entitle, build, own all of these types of assets. That’s one of the unique, the unique features of what Colliers is trying to build as a provider of multiple services across the built environment. We believe all of these things are complementary. It’s the same client base or similar client base. It’s high value, often very complicated services that need to be performed.

Deep client relationships and knowledge of the market, both locally and internationally, when it comes to financing these transactions gives our professionals huge advantage. There’s many examples, but I hope that one gives you sort of a deep understanding of what we’re seeing out in the marketplace, this merger of these various professional services.

Himanshu Gupta, Analyst, Scotiabank: Got it. No, this is great color. Thank you, Jay and Christian, and I’ll turn it back. Thank you.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: Thank you. Our next question is from Jimmy Shan from RBC Capital Markets. Your line is now open.

Jimmy Shan, Analyst, RBC Capital Markets: Thanks. Yeah, most of my questions have been answered, but just two quick ones from me. First, just following up on capital markets, are you seeing any impact from the recent rate volatility in decision-making, even within North America, which has been strong? Then second, in terms of leverage, on a pro forma basis, I think you’ll be about 2.7 times. How should we think about the pace of M&A for the balance of the year?

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Jimmy, rate volatility that we’ve seen in North America has been a little bit higher. At this point, not a major concern. Obviously, we’d like to see rates lower and more stable. With these rate conditions, we’re still seeing significant interest in capital markets activity. In terms of our leverage profile, you will see with the Ayesa acquisition closing in the next few weeks, you’ll see our Q2 leverage at the 2.9 to 3 times level based on the seasonality of the business at Q1 as our starting point.

We will see that leverage come down meaningfully in Q3 and Q4. In the meantime, we’re gonna continue to be active looking at acquisitions of all kinds. We’re gonna focus our efforts in the near term on tuck-in acquisitions that are smaller that we can do at reasonable prices, and that make great strategic sense for us as we build out our platforms.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: Christian makes a very good point. Acquisition pipelines are very interesting right now. Yes, on smaller transactions that expand capabilities, fill white space, et cetera. Let’s not forget the Ayesa acquisition. One of the key strengths of that is it opens up four or five major markets for our engineering business. Since the transaction was announced, and consistently since then, we’ve been approached, both, you know, at Colliers head office, but also the Ayesa management team about potential additions, those that wanna join as partners in the Ayesa business. We’re quite excited about what the future holds there.

It was one of the great strengths of that potential acquisition for us because it gave us a significant foothold in so many different markets, mostly infrastructure related, highly complex. Ayesa’s backlogs are stronger than ever. The excitement level to enter the next phase of their growth is palpable. The reason I raise all of this is, we’ve got a buoyant pipeline of acquisitions. We are cognizant of our leverage ratio, and that is that’s something that we’ll manage as we always have historically. Lots of stuff on the horizon.

Jimmy Shan, Analyst, RBC Capital Markets: Okay. Thanks for the color.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: Thank you. Your next question is from Daryl Young from Stifel. Your line is now open.

Daryl Young, Analyst, Stifel: Hey, good morning, everyone. Just, one quick one for me on the Canadian engineering and project management, platform. Have you started to see any early signs of infrastructure spend or the defense industrial strategy working through into your pipelines? Do you anticipate that being an opportunity in the next complete years?

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Daryl, it’s a definite opportunity for us. I know we’re working on the port expansion in Quebec as an example. Also defense construction. There’s a number of things going on there, we’re active on both project management and engineering. That is work, you know, in the on the East Coast, work in the Arctic. The opportunities there are gonna be manifold over the next few years.

Daryl Young, Analyst, Stifel: Okay, great. Thanks very much.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: Thank you. Your next question is from Stephen Sheldon from William Blair. Your line is now open.

Matthew Filek, Analyst, William Blair: Hey, Jay and Christian. You have Matthew Filek on for Stephen Sheldon. Thank you for the questions. On leasing, are you seeing any change in average lease duration on new lease signings? Just curious if the current macro environment has tenants maybe taking a more cautious approach when it comes to making longer term lease commitments.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: It’s an interesting question because I think it’s a bit of a bifurcated market. When the leases are in triple A type properties, the duration seems to be longer. In suburban properties, it’s about the same as it’s always been. That’s primarily because people are returning to the office, and number one. Number two, the lease rates in suburban office have fallen so much, it’s very attractive for many to take on more space. Everybody is talking about increased spend around technology, that’s helping office occupancy as well. Yeah, those are the kinds of things that we’re seeing out there.

Matthew Filek, Analyst, William Blair: Okay. Thanks for that color, Jay. Appreciate that. Then just had a quick one on data centers. I think you’ve previously mentioned that roughly 10% of AUM and investment management is tied to data centers. Just curious how you see that mix evolving over time, given the obvious tailwind supporting that asset class. Related to that, if you could provide any additional color on how other parts of the business are benefiting from the data center theme, that would be great.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: Well, you know, I don’t have the exact number, the exact numbers, but I do know that we’ve been in the business for 6 years. This isn’t a Johnny-come-lately situation. We’re looking at a lot of opportunity right now. We’re also looking at the opportunity of selling some strategic assets that we’ve owned for a while because the prices are significant. All of those types of things are being factored in. I know everybody’s reading about data centers, and is there enough computing power and, you know, all of those kinds of things. Our teams at Harrison Street have been deep in this area for a long time, and they’re looking at it as they would any other real estate investment.

They believe that if they can deliver some significant returns to their investors, because of the market timing right now, it will just help them raise capital for the next funds. That’s some additional color for you.

Matthew Filek, Analyst, William Blair: Got it. Yep. Thank you both. Appreciate the time.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: Thank you. Your next question is from Maxim Sytchev from National Bank Capital Markets. Your line is now open.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International0: Hi, good afternoon, gentlemen. Christian, I was wondering if you don’t mind, mentioning the organic growth in the engineering space. I guess, you know, we’re lapping and global et cetera, but, I’m not sure if you have the number, floating around somewhere.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Yeah. Max, the growth was in the mid-single digits, but we don’t talk about quarterly growth on a segment basis, as you’re probably aware. That nice growth though, you know, as I mentioned, a mix of organic growth and acquisitions in the engineering space.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International0: Okay. Thanks a lot. Do you mind maybe talking about potentially digital investments in the engineering business as obviously some of the peers are sort of looking to ramp up the capability there. I was wondering what you guys are doing internally. Thanks so much.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International: Yeah, Max, I didn’t catch the first part of that question, if you could repeat it.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International0: Sorry. Yeah, just your strategy around digital investments and sort of augmented AI capability when it comes to the design side of the business. You know, generally speaking, the bigger players seem to be moving that direction. I’m just wondering what is sort of, you know, Colliers’ strategy from that perspective. Thank you.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: Well, you know, as I mentioned in my comments, we’ve increased significantly our spend around IT. A significant portion of that is around AI. We think as we move down the decision-- The other thing I should say is not only have we increased our expenditures, but we partnered with Google, and it’s a very deep partnership. Google brings with it, you know, leading cloud capabilities, world-class engineering talent, and also additional databases, property databases that will help us differentiate ourselves in the marketplace, will help us streamline some of our back office functions, many of which we’ve been working on for the past couple of years.

The increased expenditure is in part because we believe that we have to take control of some of the delivery of technology for the first time, perhaps in our history. That’s bearing some interesting fruit as we move through this. That hopefully gives you a little bit of an over-overview.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International0: Yeah, that’s great, Paul. Thank you so much.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: There are no further questions at this time. I will now hand the call back to Jay Hennick for the closing remarks.

Jay Hennick, Global Chairman and Chief Executive Officer, Colliers International: Thank you everyone for joining us on the first quarter conference call. We look forward to speaking to you again at the end of the second. Thank you.

Christian Mayer, Global Chief Financial Officer and CEO of Commercial Real Estate Division, Colliers International2: Thank you, ladies and gentlemen. This concludes the conference call. Thank you for your participation, and have a nice day.