CBRE GROUP, INC.

CBRE GROUP, INC. Annual Report Summary for Retail Investors

CBRE GROUP, INC. (CBRE) is a global leader in commercial real estate services and investment. In fiscal year 2025, the company strategically expanded its service offerings and market reach, primarily through targeted acquisitions, navigating a dynamic commercial real estate landscape. CBRE operates through three core segments: Global Workplace Solutions (GWS), Advisory Services, and Real Estate Investments. GWS delivers integrated facilities management, project management, and transaction services to large clients. Advisory Services offers property sales, leasing, valuation, and capital markets expertise. Real Estate Investments provides investment management and development services.

Financial Performance Highlights (Fiscal Year 2025):

CBRE delivered strong financial performance in 2025, building on a robust prior year.

• Revenue: Total revenue reached $34.5 billion, a 7% increase from $32.2 billion in 2024. Strategic acquisitions and resilient performance in its GWS segment drove this growth.
• Net Income: Net income was $1.8 billion, up 10% from $1.64 billion in 2024, reflecting effective cost management and higher revenue. Diluted Earnings Per Share (EPS) reached $5.50, compared to $4.95 in 2024.
• Operating Cash Flow: The company generated $2.1 billion in operating cash flow, demonstrating its ability to fund operations, strategic investments, and manage debt.

Strategic Growth and Key Achievements:

Fiscal year 2025 featured significant strategic acquisitions that bolstered CBRE's competitive position and service capabilities.

• Key Acquisitions: In November 2025, CBRE acquired Pearce Services LLC, a leading provider of technical operations and maintenance services. This significantly enhanced its Global Workplace Solutions offerings, particularly in critical infrastructure. Earlier, in January 2025, the acquisition of Industrious National Management Company LLC expanded CBRE's flexible office solutions, meeting evolving workplace demands.
• Broader Expansion: Throughout 2025, CBRE also completed several smaller, strategic acquisitions within its Advisory Services segment, deepening expertise in specific property types and geographic markets. The February 2024 acquisition of JJ Worldwide Services further diversified its service portfolio.
• Strengthened Partnerships: The company continued its successful partnership with Turner & Townsend, a global program management and construction consultancy. This reinforced CBRE's Project Management capabilities and global delivery network. These strategic moves broaden CBRE's service lines, enhance technology integration, and expand its client base across diverse real estate sectors.

Financial Health and Liquidity:

CBRE maintains a solid financial position with manageable debt and ample liquidity.

• Debt Profile: Long-term debt, consisting mainly of Senior Notes, remained stable at $5.5 billion at the end of 2025, consistent with 2024. These notes carry fixed interest rates from 4.8% to 5.95%, with staggered maturities through 2034, ensuring predictable debt servicing costs.
• Short-Term Funding (Warehouse Lines): The company uses substantial short-term funding through various "warehouse lines of credit," totaling $8.5 billion in both 2024 and 2025. These lines primarily finance specific client real estate transactions, such as mortgage loan originations, and are typically secured by the underlying assets. They feature variable interest rates tied to SOFR (Secured Overnight Financing Rate).
• Liquidity: As of December 31, 2025, CBRE reported $1.5 billion in cash and cash equivalents. This is complemented by over $2.0 billion in available capacity under its revolving credit facilities, providing strong liquidity for operations and future strategic initiatives.

Key Risks and Challenges:

Investors should be aware of several factors that could impact CBRE's performance:

• Commercial Real Estate Market Downturn: A prolonged slowdown or downturn in the global commercial real estate market poses a significant risk. This could stem from factors like high interest rates, economic recession, or shifts in demand (e.g., increased office vacancies due to hybrid work models), reducing transaction volumes, property values, and demand for advisory services.
• Interest Rate Fluctuations: A portion of CBRE's debt, especially its short-term warehouse lines of credit, carries variable interest rates. Sustained increases in SOFR could increase borrowing costs, reducing profitability.
• Acquisition Integration and Payouts: While acquisitions are strategic, challenges in integrating acquired businesses or higher-than-expected "contingent earnout payments" (additional payments to sellers based on performance targets) could strain resources or dilute returns.
• Competition: The commercial real estate services market is highly competitive, with numerous global and regional players. Intense competition could pressure pricing and market share.
• Cybersecurity and Data Privacy: As a technology-enabled service provider, CBRE faces risks from cybersecurity breaches and compliance with evolving data privacy regulations.

Competitive Positioning:

CBRE holds a leading competitive position thanks to its expansive global footprint, comprehensive service offerings, and strategic investments. Its scale and integrated service model, spanning GWS, Advisory, and Investments, set it apart from many competitors. Recent acquisitions further solidify its leadership, adding specialized capabilities and expanding its client base, particularly in high-growth areas like critical infrastructure and flexible workspaces. Key competitors include JLL, Cushman & Wakefield, and various regional firms.

Strategy and Leadership:

CBRE's strategy centers on disciplined, targeted growth through both organic expansion and strategic acquisitions. The company aims to enhance its integrated service delivery, invest in technology and data analytics for better client outcomes, and expand its presence in resilient and high-growth sectors. No significant changes occurred in executive leadership during fiscal year 2025, ensuring continuity in strategic execution. The company also emphasizes sustainability and ESG (Environmental, Social, and Governance) initiatives as a core long-term strategy, aligning with client and investor expectations.

Future Outlook and Market Trends:

Looking ahead to fiscal year 2026, CBRE anticipates continued resilience in its GWS segment, driven by long-term outsourcing trends. While transaction-based businesses within Advisory Services may face headwinds from higher interest rates and economic uncertainty, the company expects to leverage its diversified portfolio and strategic acquisitions to gain market share. Management projects modest revenue growth in the low-to-mid single digits for 2026, with EPS projected between $5.60 and $6.00.

Key market trends influencing CBRE's outlook include:

• Hybrid Work Models: Office space demand continues to evolve, favoring flexible solutions and high-quality, amenity-rich properties.
• Logistics and Industrial Demand: Strong demand for logistics and industrial real estate persists, driven by e-commerce and supply chain reconfigurations.
• Sustainability and ESG: Clients increasingly focus on sustainable building practices and energy efficiency, creating opportunities for CBRE's advisory and project management services.
• Interest Rate Environment: Interest rate trends will continue to influence investment and transaction volumes in commercial real estate.

CBRE is well-positioned to navigate these trends through its diversified business model, global scale, and ongoing strategic investments.