LOS ANGELES — CBRE Group Inc. (NYSE: CBRE) released its financial results for the second quarter, ending June 30, showing a six percent decline in revenue, down to $5.4 billion from $5.7 billion in second-quarter 2019. The COVID-19 pandemic impacted second-quarter results across all major markets, including CBRE spending $25 million in COVID-related costs and a $16 million donation to a COVID relief fund.
“The overall impact [of COVID-19] was cushioned by our diverse business mix, particularly the sustained growth of our contractual business over the past decade,” says Bob Sulentic, president and chief executive officer of the Los Angeles-based commercial real estate services firm. “We also benefited from early moves to reduce our expense base, a process that is continuing, and strengthen our financial position and cash-flow generation despite the ongoing challenges from the pandemic.”
Across the company’s advisory services, the second-quarter report shows that leasing contracted 43 percent in the United States and property sales fell 51 percent. However, loan servicing revenue increased 15 percent, partially offsetting more cyclical business lines.
On the real estate investment front, the second quarter adjusted revenue was $154 million compared to $169 million in second quarter 2019. CBRE’s global workplace solutions fee revenue dipped to $755 million compared to $764 million in second-quarter 2019.
“The pandemic has elevated the importance of workplace strategy on corporate agendas,” says Sulentic. “Now more than ever, clients will need the strategic insight, thoughtful advice and reliable execution that CBRE and our people are best positioned to provide.”
Looking forward, CBRE expects some growth, particularly in development. According to the report, nearly 80 percent of in-process inventory related to industrial, multifamily, healthcare and office properties are at least 90 percent leased — showing signs of a well-positioned development pipeline for the current environment.
Additionally, the robust pipeline built pre-COVID was a driver for stronger-than-expected second-quarter results, according to the company.