CBRE Group Inc (CBRE) — Agentic Tribune

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals.

From 10-Q filed 2026-04-23 (period ending 2026-03-31).

Item 2. 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 months ended March 31, 2026 should be read in conjunction with our consolidated financial statements and related notes included in our 2025 Annual Report on Form 10-K (2025 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.”

During the first quarter of 2026, we began reclassifying amortization associated with MSRs (mortgage servicing rights) to net against the related revenue (Commercial mortgage origination). Historically, the corresponding MSR intangible assets were amortized through amortization expense over the estimated mortgage service period. Prior year amounts have been reclassified to conform to the fiscal 2026 presentation.

Business Environment

The strong recovery of the commercial real estate market that began in 2025 continued in early 2026. This is evident in the continuation of markedly increased property leasing and sales activity during the first quarter. Occupier demand remained notably strong in the U.S. particularly for industrial, office and data center space in the U.S. During the quarter, investment sales and financing activity improved sharply in most global markets, buoyed by broad capital availability, improved occupancy market fundamentals and tighter bid-ask spreads. Large occupiers’ growing appetite for outsourcing services continued to underpin demand for facilities management and project management activities, while the outsized growth of Artificial Intelligence investments and data center buildouts fuels strong demand for critical infrastructure services. To date, the ongoing Middle East conflict has had limited impact on CBRE’s business except for a notable slowdown in fundraising from capital sources based in the region.

Capital Allocation

We deployed $538 million in 2026 to repurchase 3,639,682 shares as of April 21, 2026.

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Results of Operations

The following table sets forth items derived from our consolidated statements of operations for the three months ended March 31, 2026 and 2025 (dollars in millions):

	Three Months Ended March 31, (1)
	2026				2025
Revenue:
Facilities management	$	5,229	49.7	%	$	4,469	50.4	%
Property management	684		6.5	%	586		6.6	%
Critical infrastructure	578		5.5	%	338		3.8	%
Project management	1,838		17.5	%	1,594		18.0	%
Advisory leasing	1,035		9.8	%	862		9.7	%
Valuation	200		1.9	%	183		2.1	%
Loan servicing	120		1.1	%	120		1.4	%
Other portfolio services	75		0.7	%	81		0.9	%
Capital markets:
Advisory sales	513		4.9	%	360		4.1	%
Commercial mortgage origination	81		0.8	%	53		0.6	%
Investment management	154		1.5	%	154		1.7	%
Development services	45		0.4	%	79		0.9	%
Corporate, other and eliminations	(25)		(0.2)	%	(4)		0.0	%
Total revenue	10,527		100.0	%	8,875		100.0	%
Costs and expenses:
Pass-through costs (2)	4,448		42.3	%	3,798		42.8	%
Cost of revenue, excluding pass-through costs	4,227		40.2	%	3,467		39.1	%
Operating, administrative and other	1,460		13.9	%	1,192		13.4	%
Depreciation and amortization	182		1.7	%	142		1.6	%
Total costs and expenses	10,317		98.0	%	8,599		96.9	%
Gain on disposition of real estate	301		2.9	%	—		0.0	%
Operating income	511		4.9	%	276		3.1	%
Equity (loss) income from unconsolidated subsidiaries	(9)		(0.1)	%	16		0.2	%
Other income	11		0.1	%	1		0.0	%
Interest expense, net of interest income	59		0.6	%	50		0.6	%
Income before provision for income taxes	454		4.3	%	243		2.7	%
Provision for income taxes	112		1.1	%	52		0.6	%
Net income	342		3.2	%	191		2.2	%
Less: Net income attributable to non-controlling interests	24		0.2	%	28		0.3	%
Net income attributable to CBRE Group, Inc.	$	318	3.0	%	$	163	1.8	%
Core EBITDA	$	831	7.9	%	$	518	5.8	%

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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 March 31, 2026 Compared to the Three Months Ended March 31, 2025

We reported consolidated net income of $318 million for the quarter, on revenue of $10.5 billion as compared to consolidated net income of $163 million on revenue of $8.9 billion in the prior year.

Revenue increased 18.6% reflecting double-digit growth across the Advisory Services, Building Operations & Experience (BOE) and Project Management segments, partially offset by a decrease in revenue in the Real Estate Investments (REI) segment.

Foreign currency translation had a 4.0% 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 17.1% during the quarter as compared to the same period in prior year primarily due to revenue growth in the BOE and Project Management segments. Foreign currency translation had a 4.1% negative impact on pass-through costs.

Cost of revenue, excluding pass-through costs increased 21.9% during the quarter as compared to the same period in prior year primarily reflecting business growth and higher commission expenses and employee compensation, as well as higher indirect reimbursed costs. Foreign currency translation had a 4.0% negative impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs increased to 40.2% of total revenue from 39.1% driven by higher costs to support growth in revenues.

Operating, administrative and other expenses increased 22.5% during the quarter as compared to the same period in prior year. The increase was primarily due to higher employee compensation and business promotion and advertising expense, driven by business growth. Foreign currency translation had a 4.0% negative impact on total operating expenses during the quarter. Operating, administrative and other expenses as a percentage of revenue increased to 13.9% in the first quarter 2026 from 13.4% in the first quarter 2025, as operating expenses grew higher than revenue.

Depreciation and amortization expense increased by 28.2% during the quarter, as compared to the same period in prior year, reflecting higher amortization expense related to intangible assets from recent acquisitions, such as Pearce.

Gain on disposition of real estate increased by $301 million during the quarter, driven by monetization of real estate development assets in the REI segment.

We recorded equity loss from unconsolidated subsidiaries of approximately $9 million, compared to equity income of $16 million in the first quarter 2025. In the first quarter 2025, we recorded equity income of $21 million, reflecting the higher value of our investment in Altus, which was sold in the second quarter 2025.

Interest expense, net of interest income, increased by 18.0%, compared with the first quarter 2025. This increase was primarily attributable to increased commercial paper borrowings, offset by the impact of net investment hedging activity.

Our provision for income taxes on a consolidated basis was $112 million for the three months ended March 31, 2026 as compared to a provision for income taxes of $52 million for the three months ended March 31, 2025. The increase of $60 million is primarily related to an increase in earnings. Our effective tax rate increased to 24.7% for the three months ended March 31, 2026 from 21.4% for the three months ended March 31, 2025. Our effective tax rate for the three months ended March 31, 2026 is different than the U.S. federal statutory tax rate of 21.0% primarily due to the U.S. state taxes and 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 of 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. In January 2026, the OECD issued a comprehensive Side by Side Package, which introduces additional administrative guidance intended to enhance coordination and simplify aspects of the global minimum tax framework. The package includes several new safe harbors including the new Side by Side and Ultimate Parent Entity safe harbors that may deem certain top-up taxes to be zero in jurisdictions with qualifying minimum tax regimes, such as the United States. We will

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continue to monitor additional administrative guidance and legislative action to incorporate the guidance into local law to assess the global impact of the Pillar Two Model Rules. The impact of Pillar Two top-up taxes is expected to be insignificant for 2026.

On July 4, 2025, the U.S. federal 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 2026 impacts of the OBBBA are insignificant based on our current operations.

Segment Operations

We organize our operations around, and publicly report our financial results for, four reportable business segments: (1) Advisory Services; (2) BOE; (3) Project Management; and (4) REI.

Advisory Services provides a comprehensive range of services globally, including 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, property management and critical infrastructure. Our Project Management business delivers program 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, and costs associated with our platform that are not allocated to segments, including corporate leadership 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 within 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 months ended March 31, 2026 and 2025 (dollars in millions):

	Three Months Ended March 31, (1)
	2026				2025
Revenue:
Advisory leasing	$	1,035	51.1	%	$	862	52.0	%
Valuation	200		9.9	%	183		11.0	%
Loan servicing	120		5.9	%	120		7.2	%
Other portfolio services	75		3.7	%	81		4.9	%
Capital markets:
Advisory sales	513		25.3	%	360		21.7	%
Commercial mortgage origination	81		4.0	%	53		3.2	%
Total segment revenue	2,024		100.0	%	1,659		100.0	%
Costs and expenses:
Pass-through costs (2)	8		0.4	%	12		0.7	%
Cost of revenue, excluding pass-through costs	1,181		58.3	%	955		57.6	%
Operating, administrative and other	469		23.2	%	428		25.8	%
Depreciation and amortization	33		1.6	%	32		1.9	%
Total costs and expenses	1,691		83.5	%	1,427		86.0	%
Operating income	333		16.5	%	232		14.0	%
Equity (loss) income from unconsolidated subsidiaries	(1)		0.0	%	1		0.1	%
Other income	1		0.0	%	1		0.1	%
Add-back: Depreciation and amortization	33		1.6	%	32		1.9	%
Adjustments:
Net non-cash mortgage servicing rights	12		0.6	%	13		0.8	%
Business and finance transformation	2		0.1	%	—		0.0	%
Costs associated with efficiency and cost-reduction initiatives	(5)		(0.2)	%	—		0.0	%
Segment operating profit	$	375			$	279

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(1)Calculated as a percentage of Total Revenue.

Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

Revenue increased 22.0% during the quarter compared to the same period in 2025. Property sales revenue grew 42.5%, led by industrial, retail, multifamily, office, and data centers in the U.S. and Asia Pacific. Globally, sales grew double-digits across industrial, office, and multifamily. Global leasing revenue rose 20.1%, led by data centers, industrial and office leasing driven by growth in the Americas which grew 20.5%, including 20.7% in the United States, and growth in Asia Pacific which grew 24.4%.

Foreign currency translation had a 2.8% 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 and Japanese yen.

Cost of revenue, excluding pass-through costs increased 23.7%, primarily reflecting business growth and higher commission expense, salaries and bonus. Foreign currency translation had a 3.0% negative impact on total cost of revenue, excluding pass-through costs.

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Operating, administrative and other expenses increased by 9.6%, as compared to the same period in 2025, primarily due to higher employee compensation and business promotion and advertising expenses driven by the growth in the business. Foreign currency translation had a 4.2% negative impact on total operating expenses.

For the three months ended March 31, 2026, gross income from mortgage servicing rights (MSR) was $26 million, offset by $38 million of amortization of related intangible assets, resulting in a net reduction to Commercial Mortgage Origination revenue of $12 million. For the three months ended March 31, 2025, the comparable amounts were $22 million and $35 million, respectively, resulting in a net reduction of $13 million. The change was associated with higher origination activity given an increase in financing activities.

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. During the first quarter of 2026, we began reclassifying amortization associated with MSRs (mortgage servicing rights) to net against the related revenue (Commercial mortgage origination). Historically, the corresponding MSR intangible assets were amortized through amortization expense over the estimated mortgage service period. Prior year amounts have been reclassified to conform to the fiscal 2026 presentation.

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Building Operations & Experience

The following table summarizes our results of operations for our BOE operating segment for the three months ended March 31, 2026 and 2025 (dollars in millions):

	Three Months Ended March 31, (1)
	2026				2025
Revenue:
Facilities management	$	5,229	80.6	%	$	4,469	82.9	%
Property management	684		10.5	%	586		10.9	%
Critical infrastructure	578		8.9	%	338		6.3	%
Total segment revenue	6,491		100.0	%	5,393		100.0	%
Costs and expenses:
Pass-through costs (2)	3,513		54.1	%	2,959		54.9	%
Cost of revenue, excluding pass-through costs	2,371		36.5	%	1,922		35.6	%
Operating, administrative and other	377		5.8	%

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Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Next expected filings

~2026-07-28 10-Q expected by 2026-08-10 (in 88 days)
~2026-10-22 10-Q expected by 2026-11-04 (in 174 days)
~2027-02-11 10-K expected by 2027-02-15 (in 286 days)
~2027-04-22 10-Q expected by 2027-05-05 (in 356 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-04-28 8-K Material Agreement Entered; Financial Statements and Exhibits
2026-04-23 8-K Earnings Release; Financial Statements and Exhibits
2026-04-23 10-Q Quarterly Report
2026-03-23 8-K Officer/Director Change; Financial Statements and Exhibits
2026-02-27 8-K Officer/Director Change
2026-02-26 8-K Officer/Director Change; Financial Statements and Exhibits
2026-02-12 10-K Annual Report
2026-02-12 8-K Earnings Release; Financial Statements and Exhibits
2025-11-13 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
2025-11-07 8-K Material Agreement Entered; Financial Statements and Exhibits
2025-10-23 10-Q Quarterly Report
2025-10-23 8-K Earnings Release; Financial Statements and Exhibits
2025-08-12 8-K Officer/Director Change
2025-07-29 10-Q Quarterly Report
2025-07-29 8-K Earnings Release; Financial Statements and Exhibits

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