Cushman & Wakefield Plc Stock

Good day, everyone, and welcome to the Cushman & Wakefield Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please also note today's event is being recorded. I would now like to turn the conference call over to Megan McGrath, Head of Investor Relations. Ma'am, please go ahead.

Thank you, and welcome to Cushman & Wakefield's Second Quarter 2026 Earnings Conference Call. Earlier today, we issued a press release announcing our financial results for the period. This release, along with today's presentation, can be found on our Investor Relations website at ir.cushmanwakefield.com. Please turn to the page in our presentation labeled Cautionary Note on Forward-Looking Statements. Today's presentation contains forward-looking statements based on our current forecasts and estimates of future events. These statements should be considered estimates only, and actual results may differ materially. During today's call, we will refer to non-GAAP financial measures as outlined by SEC guidelines. Reconciliations of GAAP to non-GAAP financial measures, definitions of non-GAAP financial measures and other related information are found within the financial tables of our earnings release and the appendix of today's presentation. Comparisons discussed on today's call are against the second quarter of the prior year in local currency, unless otherwise noted. And with that, I'd like to turn the call over to our CEO, Michelle MacKay.

Thank you, Megan, and thank you, everyone, for joining us today. Our results this year demonstrated that we have hit our stride and we've gotten there fast. We didn't just meet the bar this quarter, we moved it, setting several company records, including the highest second quarter total revenue in the history of the company, the highest second quarter leasing and services revenue in the history of the company and the lowest gross debt balance in the history of the company. Along with this, we achieved our sixth consecutive quarter of double-digit adjusted EPS growth. Back in December at our Investor Day, we laid out our current 3-year growth plan and provided annual EPS targets. Today, just 2 quarters later, we are raising our guidance for year 1. And here's what excites us most. This performance is organic, driven by a global platform with significant white space still ahead. We are a company of builders and our strength and foundation creates optionality for what we build next. We're expanding our footprint, scaling our service lines and our recent growth investments are just beginning to contribute. Let me give you some examples. Our project management business grew over 20% in the quarter with strong growth in the Americas, APAC and EMEA. We are scaling this business profitably using proprietary AI tools that create internal efficiencies for our teams and help our clients achieve meaningful project savings. Our leasing business is a consistent standout, the results of pairing global strategic advisory with precise local execution. We are gaining share globally as we advise on some of the largest and most complex leasing transactions in the world. And we continue to build our platform in high-growth asset classes. Our data center work is diversified and expanding with data center-related revenue up 83% year-to-date. And while we have strong transactional presence, integrated facilities management is actually the largest of our data center businesses and 25% of our pipeline in the broader IFM business is now data center related. What's exciting about all of these initiatives and many more in process is that we're just getting started. Year 1 of our current 3-year growth plan has confirmed we're building momentum, and we are more confident than ever in our ability to deliver strong value for our shareholders. Now I'll turn the call over to Neil to walk you through the numbers.

Thank you, Michelle, and good morning, everyone. As a reminder, all comparisons are against the second quarter of the prior year and in local currency. We delivered another strong quarter on both the top and bottom line. Second quarter revenue was $2.8 billion, up 11%. Brokerage revenue comprised of leasing and capital markets rose 19%, while services grew 7% and valuation and other grew 8%. Adjusted EBITDA of $184 million was up 13% as we continue to drive operating leverage across our platform. Adjusted EPS of $0.35 rose 17% and year-to-date adjusted EPS of $0.50 represents 28% growth versus the first half of 2025, reflecting the combined impact of operational improvements and interest expense reductions. Looking at our results by geographic segment, we drove double-digit revenue growth in the Americas, APAC and EMEA. Adjusted EBITDA in the Americas and APAC was up 23% and 17%, respectively, while adjusted EBITDA in EMEA declined primarily due to the nonrecurrence of FX gains in the prior year. Moving to revenue performance by service line. Leasing grew 27% globally with Americas leasing up 35%. Our leasing growth in the Americas continued to be very broad-based with double-digit growth across all deal sizes and strength in nearly every major market. Office leasing remains strong, reflecting continued demand from occupiers for high-quality space. We saw particular strength in the legal, accounting, insurance and tech sectors in key gateway markets. Industrial was also a standout performer, benefiting from robust activity across transaction sizes and continued momentum in the data center-related assignments. Chicago, New Jersey and the West Coast are some of our strongest performing regions in industrial. Outside the Americas, APAC leasing increased 6%, supported by solid performance in Greater China. In EMEA, leasing trends remain mixed, down 6% due primarily to quarterly deal timing variances and increased macroeconomic uncertainty in the region. Turning to Capital Markets. Revenues declined 1% globally following 6 consecutive quarters of strong growth. In the Americas, revenue was down 6%, driven primarily by industry softness in office and midsized multifamily transactions where our business is more highly concentrated. Importantly, we are seeing improved momentum early in the third quarter. APAC and EMEA capital markets grew 50% and 11%, respectively, with particular strength in Singapore, Greater China, Sweden and the Netherlands. Our services business expanded 7% globally with Americas up 5%, EMEA up 21% and APAC up 10%. We saw strong growth across all geographies in project management and facilities management, up 20% and 8%, respectively. Turning to our balance sheet and cash flow. We have continued to make meaningful progress on strengthening our balance sheet, ending the second quarter at 3x net leverage compared to 3.7x a year ago. Since April, we have paid down an additional $150 million of debt, including $50 million of our 2028 senior secured notes announced today. This brings our cumulative debt repayment to approximately $650 million since the start of 2024. During the quarter, we also amended and extended $850 million of our term loan to 2033, repricing at 50 basis points lower to SOFR plus 2.25%, the lowest pricing spread in our company's history. We also upsized the term loan by $350 million and concurrently redeemed an equal amount of our 2028 senior secured notes. We now have $150 million outstanding on the 2028 senior notes, which we intend to fully redeem by midyear 2027. Our trailing 12-month free cash flow was $249 million, up $123 million from the same period last year and representing a 79% conversion rate of adjusted net income, which is at the high end of our targeted 60% to 80% conversion rate. We closed the quarter with approximately $500 million in cash and cash equivalents and $1.5 billion in total liquidity. Moving to our 2026 outlook. We now expect revenue growth to be at the mid to high end of our guidance range of 6% to 8%. We are also raising our 2026 annual adjusted EPS growth target from 15% to 20% to 18% to 23%. Now I'll turn the call back over to Michelle.

Thank you, Neil. Let me take a moment on the market backdrop because our performance is this quarter's story, but the market is the foundation under it, and that foundation is solid. This market has been tested by every disruption you can name, rate volatility, shifting occupier behavior, geopolitical uncertainty, new technology. Each time it did what healthy markets do, absorb the shock, reprice and move forward. Why? There is a deep structural demand from a diverse capital base seeking real assets. And here's what's important to understand. We're no longer talking about the traditional definition of commercial real estate, and we haven't been for quite some time. We're talking about the built world. Whether it's called commercial real estate, infrastructure or energy, our expertise extends across the entire real asset ecosystem, subway systems and stadiums, solar panels and EV charging stations, airports and hospital systems, housing and logistics centers and working for governments across the world. The breadth of the real asset ecosystem is enormous. And the real assets of any type for global companies in any industries are increasingly strategic, requiring thoughtful advice and careful management. We're convinced this market will keep growing through change. Our strategy is designed for it. And it starts with clients. The world's top companies partner with us on what's foundational to their business, and you don't just hand that to anyone. They hand it to a brand and a company that has earned trust for a century. And that trust compounds deeper, more durable relationships leading to expanding opportunities. But earning that trust and delivering on it doesn't happen in one office or one service line. It takes more than 50,000 of us at Cushman & Wakefield, moving as one across every market, connected by shared insights and a common exacting standard of execution. That's how we deliver for clients and shareholders. In 2023, we put an initial 3-year plan in front of our Board of Directors, and we executed on it in 2 years. Now we're already accelerating our next plan, and our raised outlook shows it. We are builders, and we will keep proving it to you every day, every quarter, every year. Thank you to all of our employees, clients, lenders and shareholders. And with that, I'll turn the call over to questions.

[Operator Instructions] Our first question today comes from Julien Blouin from Goldman Sachs.

I'd like to dig into those comments you made around the data center work that you're doing. It seems like you're seeing some very encouraging progress there. I guess I'd be interested in just how you're thinking about growing that business. Do you think that at this point, it would make sense to acquire additional capabilities and bring on an additional platform in that space or sort of more organically grow that business?

Julien, great question. Look, one of the most exciting things about the asset class is that we can participate in it across the life cycle of that asset. And say, while the transactional business is strong for us right now and has been growing, the sustainable long-term potential is on the services side, and we're growing there, too. As I mentioned, in IFM, we're seeing a very exciting opportunity in our business.

We've invested organically in expanding our sales and delivery capabilities, brought on new leadership and expect it to be a larger driver of our growth going forward. But in terms of capital allocation, the idea of either buying or bringing in some expertise in an inorganic fashion is also on the table.

Got it. That's helpful. And then maybe digging into capital markets. I think we were surprised a little bit by the softness relative to what we've seen reported from your peers, acknowledging those comments around mid-market and multifamily. I guess that was just an area where I thought you guys have done quite a bit of hiring over the last 18 months. Does it feel like you're yet seeing the impact of that hiring? And then Neil, I think you mentioned sort of the momentum early in the third quarter. Is that specifically an improvement in multifamily? Is it broader than that?

Fair question, Julien. Look, for the last 12 weeks, the activity has been unusually concentrated in large institutional portfolio trades in major metros and the industry data confirms that concentration. We have strong athletes producing in a couple of those key metros today, but our footprint there is early. And we see that 12-week concentration as an anomaly, but the lesson holds either way. It's white space.

Every dollar of that activity, we're not yet capturing in share is share we can go win. What we can see is where we have the right athletes in place in those markets, they're proving the model. Expanding that means finding more people proven in those asset profiles and those metros who can operate inside a large integrated global platform because the value here compounds through the cross-sell and global connectivity, not individual production. The last 1.5 years, we've brought in about 100 people. And if you were going to model that, I would say kind of model that evenly over 1.5 years. And it probably takes somewhere around 18 months from a hire to start to really see that ramp. Neil, do you want to add anything to that?

Sure, Julien. As we look at the beginning of Q3 and certainly July, we are encouraged by what we're seeing. The strength is fairly broad. It's early in the quarter, but very pleased with what we're seeing as we move through Q3.

It really does appear to be an air pocket, Julien.

Our next question comes from Anthony Paolone from JPMorgan.

I'll start with services. You've kind of run that now with high single-digit revenue growth for a bit here. And so I was wondering if you can comment on how you feel about the sustainability of that revenue growth on a go-forward basis? And then also just what profitability might be looking like? I know you don't break it out as a segment, but just any color into what's dropping to the bottom line there would be great.

Sure, Tony. As we look at services, what we love about it is the resiliency of the business. So we can see the pipeline as we look out over the next 12 months and like what we're seeing. So if we break it down into different pieces, our IFM business and our facilities management and property management businesses are performing very well globally in all markets. And then as you mentioned, project management, which tends to be slightly shorter cycle, has been exceptionally strong. In terms of margin, margins in services are exactly where we'd expect them to be. So we're seeing -- certainly, the work we did in EMEA around our design and build business has contributed to margin improvement in services in EMEA. And overall, margins are exactly where we'd like them to be.

Okay. And then just on capital allocation. It seems like the math points to $250 million or so of free cash flow this year. Can you talk about what you want to do with that? Because I know, Michelle, you alluded to maybe even complementing some of the data center capabilities with external growth.

Yes. Thank you for the question, Tony. We're entering a new phase of our capital allocation given the amount of substantial reduction in leverage and interest savings costs, along with continued operational rigor that's resulted and will continue to result in increased free cash flow conversion. So in terms of capital allocation going forward, yes, we can continue -- can continue to reduce leverage. As you know, we have a goal of reaching investment grade.

We're already going to be in the mid-2s by the end of this year. Now what's opened up to us, I would say, more significantly is we can continue to invest in organic growth more fully, which has been very successful for us and/or we could pursue accretive M&A or even consider returning capital to shareholders. Those are all options on the table for us now.

Our next question comes from Stephen Sheldon from William Blair.

Nice work here. First, on the project management side, I think you noted 20% year-over-year growth this quarter. So I'm curious how much visibility you have into growth there over the rest of the year and into early 2027, given I think a lot of those projects can last 12 to 18 months. And is that activity concentrated in certain subsectors?

Great question, Stephen. Project management, as you said, has been very strong, up 20%. And we've seen that broadness both in the U.S. and internationally. So we really like what we're seeing there. It is slightly shorter duration, but you're right, some of the projects are full year projects. So they do reoccur, and they certainly are underpinning the strength of our services business.

We've built significant capabilities in that area. And so that's an area we put in place new management 18 months ago, both in the U.S. and internationally. We've got a very strong operating team. And so it's an area that we're very excited about, and we see continued progress and continued growth in that market.

Yes. And I would just underscore that with the comments I was making around capital allocation and our increased free cash flow and how successful we've been organically investing in that business, and we will continue to do so.

Good to hear. And then as a follow-up, can you just remind us how you're thinking about incremental margins in both leasing and capital markets over the rest of this year and into next? Is there anything that would weigh on the profit flow-through relative to what you've seen and kind of discussed historically in terms of incremental margins?

No, I don't think so, Stephen. I think you've got it. We are very -- we remain very focused on driving margin expansion, and we're very confident in the target we put out at our Investor Day, which is the 150 basis points over the 3-year period. If we look specifically at this year, I think 2 things weigh into what we've seen so far this year. First of all, we're pleased with our progress this year. We have seen margin expansion and operating leverage. So that's good to see. At the same time, we are investing to drive growth.

Our growth is driven by organic growth. We're very focused on balancing margin with investing in the business for future growth. And then secondly, early on in the year, as others have noted, commissions were slightly higher than normal just due to the size of leasing coming through early on in the year. That will moderate as we go through the year. But I think those are the 2 specific things that impacted margin. But overall, feeling very good about where we're going in the business.

Our next question comes from Ronald Kamdem from Morgan Stanley.

Just going back to sort of the commentary on the sort of the data center side. As you think about sort of that business, that growth line, have you thought about sort of breaking it out? Or does it still sort of makes sense to have it embedded in some of the different service lines and so forth?

Ron, we -- it's embedded across the business. And so we -- while we look at it, we don't break it out. I think it's helpful to understand from an operating standpoint, where the opportunities are. But at this point, I don't think breaking it out will add significantly to our disclosures.

Got you. And then the follow-up on the capital markets question, which it sounds like an air pocket in the quarter. But does this -- does a quarter like this sort of change anything in terms of like the strategy, like do you want to hire more faster? Or is it sort of like, hey, the market will sort of come to us as things sort of normalize? Just sort of curious if strategically this sort of pushes you one way or the other.

Thanks for the question. Strategically, we continue to execute on our long-term plan here. Remember, we're long-term strategic builders, and we've shown that leads to better and better performance. So we are staying the course. Our course, our strategy, our definition of talent -- but here's the most important point. We raised guidance today, and that raise doesn't depend on this capital markets expansion. It's driven by the strength of the business we operate now, including our existing capital markets teams. So growth from the institutional portfolio build is upside beyond those numbers, which means that we're never forced buyers of talent, and that's exactly why the capital markets platform will be durable when it's fully in place.

Our next question comes from Mitch Germain from Citizens.

Michelle, I think you referenced 100 new hires. Was that just capital markets? And maybe if you can provide some perspective from a geography, please?

It's a good question. I won't give you geography, but I like that you added please. Yes, that's -- I appreciate that. It's 100 in capital markets over the course of 18 months, starting in first quarter of 2025.

So then if I could just extend that question to where -- what have you been doing on the leasing side?

Do we have leasing numbers here? We'll come back to you on that one.

No worries. Second question for me. I think you referenced -- I want to just kind of get the terminology, deal timing variances in EMEA leasing. Does that suggest an acceleration in the third quarter?

Mitch, the way I put it is Europe is feeling the impact of the global economic and geopolitical more than other regions. Our leasing business, as you saw, was down primarily in the U.K. and in Ireland. We feel good about that business, but I'm not sure that we're going to see a rapid recovery there in Q3 just because of what's weighing in that region. But we certainly like what we're seeing in EMEA. The services side of the business has been exceptionally strong. Capital markets are strong. And so I think that sort of helps you frame how we're thinking about EMEA.

Our next question comes from Seth Bergey from Citigroup.

I just wanted to kind of ask on a few of the guidance pieces. You're kind of at the 79% the free cash flow conversion kind of towards the higher range. And I think just given kind of where you are quarter-to-date, the back half implies kind of adjusted growth of 11% to 18%. Is there anything we should be thinking about kind of from like a comps perspective in the back half? Is that kind of what the deceleration in the back half is attributed to? Or is there anything else we should be thinking about?

No, I don't think so. I think as we look to the full year guide, we've raised both the full year revenue and EPS guide, and that really is primarily driven by the excellent outperformance we saw in the first half of the year and the strength we saw in leasing. You are correct.

As we look to the back half of the year, our guidance does contemplate more moderated growth. But our pipelines are strong. They look good and the fundamentals of the business remains strong. So I think what you're seeing is us just taking a more pragmatic approach at this point in the year. We have raised the full year guide, but we're just being, as I say, more moderated as we look to the back half.

Great. And then maybe just going back to kind of some of the work you've done on kind of desiloing the business. What kind of inning would you say we're in there? And how much more opportunity is there to kind of just drive efficiencies from that type of work?

Brendan, do you mind to repeat the end of that question? I'm sorry, Seth. Can you just repeat the end of that? You broke up a bit for us.

Yes. You've kind of talked about driving some efficiencies across the business with the desiloing. Just kind of curious what inning you're in and how much kind of more efficiencies you're able to drive from that type of work?

Okay. Great. I would say we're in inning out of a 9-inning game, we're probably in inning 7 at this point. We're starting to see some real efficiency gains. We're starting to connect the dots even more strongly. Even in reference to something like capital markets, I said that we're looking for the right kind of athletes there. We're seeing substantial cross-pollination of business into leasing and property management. So as we're desiloing, I think what's important is we're also seeing a cultural shift in the way that people think about what their responsibility is to drive business across the platform and not just into their individual business line.

And our next question comes from Brendan Lynch from Barclays.

I wanted to follow up on project management. It's clearly a strong contributor to revenue -- to services revenue. And you mentioned that it was primarily through organic growth. But maybe you could discuss your broader go-to-market strategy for capturing the larger opportunity over the long term.

Yes. Look, as I said earlier, it's a key focus area for us. We are looking both short term, long term. It comes through in each of our service lines. So we have project management in our global occupier strategy business. That's a very strong business. We have project management in our Asset Services business in the U.S. And we are strong both internationally and within the U.S. So just a big focus for us, big opportunity comes through all the asset classes and working on not only top line growth, but also ensuring that the margin grows in that business, too.

Great. That's helpful. And maybe just on facility management margins, data center services, how they compare to the company-wide facility management margins and how we should expect that to trend as the data center exposure grows?

Yes. So our key focus around data centers is really moving up that value chain. We do some fairly sophisticated work with robotics for one of our clients we are doing much more technical work, and that comes with higher margins. So that's the focus of the investments we're making. That's the focus of the work that we've seen come through in data centers. So it's very attractive work that we have strong capabilities in, and that is part of what's driving the improvements we're seeing.

And I would just add that both in project management and data center work, it plays directly into the strategy we put out at Investor Day to work up the value chain in terms of more technical services that we intend to provide. And again, reflecting back on the capital allocation questions that we've had, you're going to see that we've got more and more cash at our disposal to invest in those areas.

And with that, ladies and gentlemen, we'll be concluding our question-and-answer session. I'd like to turn the floor back over to Michelle MacKay for closing remarks.

Thank you, everyone, for your questions and your time today, and we look forward to speaking with you again on our third quarter earnings call.

And the conference has concluded. We do thank you for joining today's presentation. You may now disconnect your lines.

Good day, and welcome to the Cushman & Wakefield First Quarter 2026 Earnings Call.[Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Megan McGrath, Head of Investor Relations. Please go ahead.

Thank you, and welcome to Cushman & Wakefield's First Quarter 2026 Earnings Conference Call. Earlier today, we issued a press release announcing our financial results for the period. This release, along with today's presentation, can be found on our Investor Relations website at ir.cushmanwakefield.com. Please turn to the page in our presentation labeled Cautionary Note on Forward-Looking Statements. Today's presentation contains forward-looking statements based on our current forecast and estimates of future events. These statements should be considered estimates only, and actual results may differ materially. During today's call, we will refer to non-GAAP financial measures as outlined by SEC guidelines. Reconciliations of GAAP to non-GAAP financial measures, definitions of non-GAAP financial measures and other related information are found within the financial tables of our earnings release and the appendix of today's presentation. Before I pass the call over to Michelle. A quick reminder that on April 8, 2026, we filed an 8-K with the SEC outlining several changes to our reporting presentation effective January 1 of this year. To better align our reporting with industry peers, we will no longer report service line fee revenue, along with the following non-GAAP measures: adjusted EBITDA margin, segment operating expenses and fee-based operating expenses. As a result, our discussion of revenue and associated growth rates will now be inclusive of gross contract costs. Further detail on these changes as well as 2 years of recasted historical financials can be found in the 8-K filed with the SEC, which is also available on our IR website. Lastly, comparisons discussed on today's call are against the first quarter of the prior year in local currency. And with that, I'd like to turn the call over to our CEO, Michelle MacKay.

Thank you, Megan, and thank you, everyone, for joining us today. We delivered strong first quarter results, demonstrating consistent execution of our strategy and measurable progress toward our long-term financial targets. We delivered 9% revenue growth, exceeding our long-term guidance range. We generated mid-teens adjusted EBITDA growth as operating leverage continued to build, and we delivered 67% adjusted EPS growth, reflecting both strong business performance and the structural improvements that we have steadily made to our balance sheet. These outcomes are deliberate, the product of a strategy designed for durability and growth. Supported by our solid first quarter performance and continued strength in our pipelines, we remain confident in our full year guidance of 15% to 20% adjusted EPS growth. I want to focus on the breadth of our growth, which is a key driver in our consistency of our performance. In high-growth asset classes, clients are shifting capital and demand towards specialized sectors, including logistics, life sciences and AI-related industries. AI is a structural tailwind for the business, supporting leasing activity across geographies and fueling growth in our data center-related services, with 50 technical advisory data center projects underway in APAC now and expanding global mandates. This is a long-duration opportunity that continues to scale. In Capital Markets, we delivered our sixth consecutive quarter of double-digit revenue growth, including 22% growth in the Americas, with institutional client revenues up 32%. This reflects the compounding returns from our talent and platform investments and the increasing connectivity within our institutional franchise. In leasing, we achieved the highest first quarter revenue in company history, growing 17%. Performance was broad-based across industries, deal sizes and geographies with growth in 15 of our top 20 cities in the Americas. That breadth matters. It reinforces both the sustainability of the growth and our ability to consistently capture share. In services, revenue grew 7%, reflecting steady progress as clients increasingly consolidate toward providers that can deliver integrated multiservice capabilities at scale. Project management growth of 15%, driven by international performance underscores our ability to manage increasingly technical work streams for a growing global client base. And taken together, this is what consistency looks like: diversified growth, scalable margins and disciplined capital allocation. With that, I'll turn the call over to Neil to discuss the quarter in more detail.

Thank you, Michelle, and good morning, everyone. As a reminder, all comparisons are against the first quarter of the prior year and in local currency. First quarter revenue was $2.5 billion, up 9%, fueled by broad strength across our service lines and continued positive momentum from our growth initiatives. Adjusted EBITDA grew 15% to $111 million as we drove operating leverage across our platform. Adjusted EPS of $0.15 was up 67% as we benefited from the strength of our core business and the capital structure improvements we have made. Continuing our balance sheet transformation, earlier this week, we announced our decision to redeem $100 million of the $650 million outstanding on our 2028 notes. Once completed, this will mark approximately $600 million in total debt prepayments since the start of 2024 and further progress towards our target of reaching 2x net leverage in 2028. Taking a look at our revenue performance by service line for the quarter. Leasing grew 17% in the quarter with Americas leasing up 19%. Our leasing growth in the Americas was broad-based with double-digit growth in core, midsized and large leasing deal sizes. By asset class, office demand remains solid, and we saw particular strength in industrial, including data centers. EMEA and APAC leasing increased 10% and 9%, respectively, with particular strength in Germany, the Netherlands and Greater China. Turning to Capital Markets. We reported 14% global growth in the quarter. Our continued strong performance in capital markets reflects the work we've done to add top talent and strengthen our platform. Office was up 11% globally, performing especially well in the Americas, with gains across all deal sizes and particular strength in New York City, Northern California and Phoenix. Industrial grew 25% with double-digit growth in each of our regions. Our services business expanded 7% globally with continued strength in project management in both EMEA and APAC, while the Americas benefited primarily from new business wins and expanded client mandates in our facilities management business. To reiterate what we said at our recent Investor Day, we are focused on driving steady profitable growth in our services business as we continue to move up the value chain with our clients. Turning to cash flow. Our first quarter use of cash was in line with historical working capital trends, including the annual payment of our U.S. bonuses and reflects typical seasonal patterns in our business. Our trailing 12-month free cash flow was approximately 70% of adjusted net income, in line with our target range of a 60% to 80% free cash flow conversion rate. We closed the quarter with approximately $600 million in cash and cash equivalents and $1.6 billion in total liquidity. Our net leverage ratio at the end of the quarter was 3.1x, a near full turn improvement from the same time last year. Moving now to our 2026 outlook, which remains unchanged. We continue to anticipate revenue growth of 6% to 8% and adjusted EPS growth of 15% to 20% Finally, I'd like to give an update on our 3-year targets we provided at our 2025 Investor Day, given the recent changes in our reporting as disclosed in our April 8-K. The previous 3-year fee revenue growth target of 6% to 8% has been transitioned to a GAAP revenue growth target and remains at 6% to 8% growth. While we will no longer provide specific EBITDA margin targets, we continue to expect to achieve roughly 150 basis points of margin expansion over the 3-year period. Our targets of annual adjusted EPS growth of 15% to 20%, free cash flow conversion of 60% to 80% and net debt leverage of 2x by 2028 remain unchanged. With that, I'll turn the call over back to Michelle.

Thanks, Neil. Over the last 3 years, we have intentionally reshaped this company into one that is more focused, more agile and better positioned to lead through market transformations, allowing us to compound profitable growth. Quarter after quarter, we are converting strategy into performance, delivering predictable results, resilient growth across our business lines and durable earnings through changing market conditions. Our consistency of execution is not by chance, it is by design, and it is a defining characteristic and a key differentiator of this company. Importantly, consistency for us is not only reflected in our financial performance, but also in how we lead our clients with clarity and tailored strategies during periods of transformation. The work that our think tank, including the continued expansion of our AI impact research, reflects that mindset. Today, we are proud to launch part 2 of our AI series. The first part, which focused on introducing our AI dashboard, engaged over 15,000 clients and stakeholders, cementing our position as a true thought leader in this space. Today's release goes even deeper, examining how AI is likely to reshape economic growth, employment patterns and space demand by sectors, roles and geographies. By translating complex macro and technological shifts such as AI into clear, actionable insights, we continue to support better decision-making for occupiers and investors. I will close today with this. We are confident in our outlook, grounded in the visibility we see across our businesses and the durability of our model. Thank you to our teams for delivering another strong quarter and to our shareholders for their continued confidence. And with that, I'll turn the call over to the operator for questions.

Thank you. [Operator Instructions] Our first question comes from the line of Julien Blouin with Goldman Sachs.

Just wondering on the leasing results, they were pretty impressive in the quarter. Can you remind us how much of that was driven by some of the recruitment initiatives over the last year? And from a recruitment standpoint more generally, how do you feel you stand today across your different segments?

Thanks, Julien. It's Michelle. Good morning. In terms of recruiting in general, we're doing extraordinarily well. We're building out the capital markets platform still, but we've had a significant number of hires there. First quarter, we had a significant number of leasing recruits land as well. In industrial leasing, that's been a consistent bright spot for us over the past 2 years. So we expect to continue to do some really strong leasing there. We've recently landed some teams in Boston. And our expectation is that fundamentals will continue to be strong in U.S. industrial as minimal supply is out there. And let me give you just a couple of data points around that, too, for leasing and industrial in particular. Demand is accelerating in Q1. Absorption in the U.S. was up 52% year-over-year. So this is a great place to recruit. New and modern facilities are winning. Larger users are seeking modern logistics facilities to support automation. Higher power requirements, that's becoming the primary driver of demand. And construction is down 60% from peak levels in 2022, which is going to help vacancy drift lower, but also importantly, the industrial leasing market is now 80% larger by dollar volume than it was pre-pandemic. And so as those leases roll over, transaction values are going to be significantly higher. So net-net, tightening market there, very similar dynamics in U.S. office leasing for us as well, where demand on the fourth quarter rolling net absorption exceeded 5.2 million in Q1, which is the strongest level since pandemic. Leasing, obviously -- unfortunately, gets overlooked sometimes relative to capital markets, but it's doing extraordinarily well.

Thank you, that's very helpful. And then I think you noted in the slides that the strong services growth out of EMEA was driven by improved facilities management in U.K. and Ireland and then strong project management in France. Just wondering how sustainable those improvements are going forward? Should that higher growth carry for the rest of the year? And is this sort of evidence that the restructuring that you did last year is really taking hold or actually, the year before?

Yes, Julien, as we look at services, certainly very pleased with what we're seeing internationally. Project management, you didn't mention that. That was an area of particular strength, both in APAC and in EMEA. We certainly are seeing very nice improvement in margins in EMEA. It's our first quarter of margin expansion and some of that is as a result of the structural work we did around our services businesses. So in general, we feel very good about where services is going and the growth we're seeing.

Our next question comes from the line of Seth Bergey with Citi.

I guess the first one would be just one of the topics at Investor Day was the ability to kind of cross-sell and drive that by 200% by 2028. I guess where within kind of the 1Q results, can we start to see evidence of that and how you're tracking that? Or can you share any color on that initiative?

Yes, certainly. Part of this is motivating teams and cross-sell capacity. We've recently brought together the GOC, which is our next top 50 group of leaders and align them on our compensation structure, which involves KPIs associated with the cross-sell. So we're starting to make good movement there. We're tracking a series of KPIs to ensure that's happening when we hit our targets over the course of the next 3 years.

Great. And then I guess just a quick question on kind of guidance with tracking 9%, kind of, ahead of the revenue target. I know 1Q is a bit seasonally weak, but just thoughts on kind of leaving the guidance unchanged, tracking ahead with the strong first quarter.

Yes, sure. I can address that. Look, certainly very pleased with the first quarter we had, solid first quarter, solid leasing, certainly services was right in line with expectations. We do continue to see strong momentum in April and pipelines look good. But we started the year with a very ambitious targets. And so we remain very confident in achieving those targets. But at this point -- yes, at this point, seeing everything pointing towards a solid year.

Our next question comes from the line of Anthony Paolone with JPMorgan.

Maybe I'll start with the last item you mentioned, Neil, and maybe, Michelle, as you kind of look into April, May, June, whatever the, sort of, visibility looks like right now, can you talk about where there's been any changes or particular places of strength, property type or business segment-wise, especially since a lot of the first quarter, which was very good, was locked up before the war and some of the geopolitical matters.

Yes, Tony, we're still seeing significant strength in April, and that really is across every business line and segment type.

Okay. And then my follow-up is you mentioned 50 data center projects in APAC. And just wondering if you were calling that out just as you're going around the globe and calling out different items or if that's kind of where the bulk of your data center business is or if there's any big geographic differences in your capabilities on the data center front like in APAC versus the U.S. or EMEA?

Yes. Let me talk a little bit about that. We pulled that out because obviously, that's a pretty substantial number, and that involves project planning, project development, construction and delivery, cost consulting and technical due diligence. But in the Americas, we recently won a 5-year project management mandate with a blue-chip tech firm. And this also focused on higher value, more technical services in the form of project control. We've won several leasing deals in the Americas since the beginning of the year. In EMEA, we've recently won 5 mandates in the Nordics for preconstruction advisory service. So it is across the globe that we are seeing business and execution in data centers.

Our next question comes from the line of Brendan Lynch with Barclays.

One on the office leasing. It's been really strong to start the year, as you suggested. Do you get the sense that companies are still catching up from not leasing sufficient space over the past couple of years? And if so, how far are we through this process?

I mean I'd say there's a bit of that. You can talk about sublease space, which is trending lower and down about 25% from the peak. So businesses are taking their space back. But we also have this really interesting supply dynamic that exists in the industrial market as well, where the U.S. construction pipeline is 85% below its Q1 2020 peak. So the dynamic is driving demand into the best located Class A space. And so there's a bit of a scarcity play going on here as well. Lease terms are holding. And so it is not a single quarter event. The fundamentals are aligning to really support sustained activity in the office leasing sector.

Are you getting the sense that companies are leasing space in anticipation of future growth as well? That was kind of the trend years ago, and that kind of dissipated a bit. But now I'm sure they're seeing the lack of space that's on the market. Are they getting more assertive in trying to lock up space for a longer term than that?

Yes, I think that's a good point. Yes. They're getting more confidence where I think if you weren't sure if you were going to take the extra 20,000 square feet and you found an asset that you really like to take space in, you're going to go forward with that.

Our next question comes from the line of Stephen Sheldon with William Blair.

Yes, great to see the continued acceleration in services. So...I think kind of commentary here has been the pipelines are good. But just curious what you're seeing in the pipelines there and how different that might look between the different businesses within services, especially with the push you're making into more technical areas. So yes, would just love an update on the services pipeline.

Yes, sure, Stephen. Look, as I said in the script, overall, our global services businesses are performing exactly where we want them to perform. Overall, up 7%. As I mentioned earlier, it was great to see the tremendous work that our teams are doing in APAC and EMEA, particularly around project management, but then also property management in EMEA. The one area where we have seen slightly slower growth in the Americas over the last couple of quarters is in Facility Services, that's our janitorial business, where we've seen some contract transitions, but we feel very good about the work we're doing there. We are strengthening the platform, and we like the pipeline that we're seeing and what's happening. I think another key area of strength for us, particularly in the U.S. and globally is our global occupier services business. That is our outsourcing of large enterprise clients. We've had some very big notable wins recently, and that's a real bright spot for us and lends itself really well to cross-selling and growing the business. So pretty excited about what we're seeing on the services side.

Got it. That's helpful. And then maybe on -- as we look at regional profitability trends, it looked like APAC took a step back. This quarter was down quite a bit year-over-year. I'm assuming that's just -- I think maybe that was a tough comp and I think especially from capital markets and then capital markets being lower year-over-year. But just -- yes, I guess anything to call out there on the APAC profitability and maybe how you're thinking about that over the rest of the year?

Sure. Fundamentally, APAC has not slowed down. We like what we see -- what we saw there and what we are seeing. There were really 2 primary drivers for that drop in profitability. As you said, the first one is -- was capital markets in Japan. We had a couple of very large upsized transactions there a year ago. If you adjust those out, actually, Japan was up almost 100%. So we like the underlying fundamentals, but those tough comps certainly contributed to what we saw in the quarter in that market and in APAC overall. And then the second thing was we did recognize a $3.5 million lower earnings from Onewo, our joint venture in China as a result of a onetime provision for credit losses. Now China itself was actually -- we actually started to see a bit of recovery there. So China itself is very strong, but we had that onetime impact. So overall, feel good about APAC, but certainly, you saw the impact of those 2 things in the quarter in our results.

Our next question comes from the line of Ronald Kamdem with Morgan Stanley.

Just going back to the margin expansion target that I guess you still expect to achieve. Maybe could you just talk through just what sort of that entails 150 basis points? Is that mix? What -- is it services? Is it some of the other business lines? Like just -- I'd just love to double-click on, in your mind, where that margin uplift will come from and if you -- if we could start seeing some of that this year.

Yes, sure, Ron. Look, as we look at margins, we're very focused on profitable growth. I think growth is clearly the headline, but at the same time, as we grow, we want to make sure that we're doing that profitably. So where are we seeing the margin improvement? Certainly, as our transactional businesses grow, that's leasing and capital markets, that mix will result in higher margins. And then on the services side, we've done a lot of restructuring, restructuring around contracts, looking at the back office, making that more efficient. So it will really be a combination of both of those that drives the margin, very mindful of the investments we're making as well, making sure that those investments have a strong IRR and are driving both growth and profitability. So I feel good about where we are. You saw the 30 basis points of margin expansion in the first quarter. And certainly, we intend to keep that margin expansion going as we look out over the next 3 years.

Great. And then my second question, just going back to sort of AI and data centers. Maybe in terms of -- I think you sort of highlighted in terms of leasing, there was some data center exposure. Maybe can you talk about some of the tailwinds in some of the other segments from that trend and what the company specifically is doing to position themselves?

Yes. Let me talk about us first, AI at Cushman. We view AI through 2 lenses here: One is as an efficiency enabler and two, as a growth tool. So we consider efficiency gains, table stakes. We know what these are. These are simple operating with rigor, kind of, standards, and we're continuing to evaluate ways we can optimize workflows and outcomes across the entire platform. On the growth side, the growth aspect is what excites us the most, leveraging our proprietary data to capture net new revenue. In this vein, we've entered into a strategic relationship with one of the leading AI companies. This provides us with external thought leadership and domain expertise to ensure we're considering every opportunity to drive growth across the platform. Now when you talk about AI in the macro, which I think is where you're going, our view, which you're going to see in that report that I mentioned in my script will be released today, we believe that AI expands the size of the economy and that translates long term into more demand for space. Based on our research, we name how much space that is. We expect AI to drive a net increase of $330 million -- I mean, sorry, 330 million more square feet of additional demand over the next decade. And we're already seeing early signs across office and industrial. So here's a couple of interesting points of information. U.S. office demand in Q1 had its highest post-pandemic reading. In the Bay Area, we're currently tracking an AI footprint of 7 million square feet, up from 4.5 million square feet in 2025. Manhattan and San Fran with strong tech ecosystems were among the leaders in net office absorption in Q1. Industrial demand, like I mentioned earlier, was up 52% year-over-year in Q1 according to our internal research with a focus on modern facilities designed for AI and automation, that's accounting for most of that net absorption. So AI will be a net positive for demand. But there are some nuances that you need to pay attention to, right? Office will continue to shift toward high-quality Class A space. Flexible and tech-centric spaces. Industrial will shift toward, as we said, modern, more power-intensive facilities. Multifamily expect performance increasingly concentrated in high-growth markets in talent dense markets. And in retail, we expect the K-shaped economy to persist, driving outperformance at the high and low end with pressure on mid-tier retail.

Our next question comes from the line of Mitch Germain with Citizens JMP.

So Michelle, I think you mentioned clients shifting capital to specialized sectors. So I'm curious what -- how are you guys positioning to capture some of that activity?

Thanks for the question, Mitch. For several years now, we have been allocating dollars into those specialties, both in terms of bringing in valuable talent to the platform, increasing our cross-sell and building out those platforms globally. So when we talk about whether it's data centers or specialized logistics or life sciences, it's not just that we have the talent when you think about transactions, we also have it in servicing, and we support some of the biggest names in the world with regard to the assets that they either own or occupy in those spaces.

That's helpful. And then just curious about the environment with regards to hiring because this is clearly a trend that seems to be consistent across most of your peers as well. Are you seeing shifts in sort of the ask, the economics around that? Or anything you could share, please?

Do you mean in terms of hiring advisory or brokerage talent?

Exactly. Sorry about that. Yes. I mean...

Yes, not really seeing a shift from our perspective in the way that we're structuring our contracts. We have a very specific way of going about analyzing and structuring our contracts. And so no, we've not seen a material shift in those structures.

We have reached the end of the question-and-answer session. Ms. MacKay, I'd like to turn the floor back over to you for closing comments.

Thank you, everyone, for your time today, and we look forward to speaking to you again on our Second Quarter Earnings Call.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Good day, and welcome to the Cushman & Wakefield Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Megan McGrath, Head of Investor Relations. Please go ahead.

Thank you, and welcome to Cushman & Wakefield's Fourth Quarter and Full Year 2025 Earnings Conference Call. Earlier today, we issued a press release announcing our financial results for the period. This release, along with today's presentation, can be found on our Investor Relations website at ir.cushmanwakefield.com. Please turn to the page in our presentation labeled Cautionary Note on Forward-Looking Statements. Today's presentation contains forward-looking statements based on our current forecasts and estimates of future events.

These statements should be considered estimates only, and actual results may differ materially. During today's call, we will refer to non-GAAP financial measures as outlined by SEC guidelines. Reconciliations of GAAP to non-GAAP financial measures, definitions of non-GAAP financial measures and other related information are found within the financial tables of our earnings release and the appendix of today's presentation. Also, please note that throughout the presentation, comparisons and growth rates are to the comparable periods of 2024 and in local currency unless otherwise stated. All revenue figures refer to fee revenue unless otherwise noted.

And with that, I'd like to turn the call over to our CEO, Michelle MacKay.

Thank you, Megan. I want to start by saying I'm excited. I'm excited because of the exceptional results we delivered in 2025. I'm excited because of the 3-year financial targets and strategy we laid out at Investor Day. And I'm excited because of the transformational evolution we are seeing with AI. Starting with our 2025 results. We consistently and successfully executed against our targets outperforming on many fronts. In 2025, we delivered 34% adjusted earnings per share growth, the highest total revenue and highest leasing revenue in company history, more than 100% free cash flow conversion, and we ended the year at a net leverage ratio of 2.9x, nearly a full year ahead of our original expectations. In addition to this, we exited the year with momentum, especially in capital markets, where we delivered 15% growth in the fourth quarter.

Our leasing business continued its consistent and solid performance, contributing to our strong free cash flow. And our services businesses continue to make strides on new business wins, retention and moving up the value chain. I am also excited about the 3-year financial targets we presented to you at Investor Day in December, including 15% to 20% annual adjusted EPS growth. We have confidence in these targets and the strategic growth priorities we outlined. We already see early indicators of success in these high-growth areas, particularly in the Americas, where capital markets was up 19% in Q4 and multi-market leasing grew 33% in 2025. We also spoke about how our organization shows up as an enterprise for our clients.

Let me highlight an example of this work. We recently won an integrated portfolio management mandate from a large international corporation. But why did we win? During the RFP process, we showed up as a team, not just a group of individuals. We worked with the client not to just win their business, but to provide integrated execution across all of their locations. We displaced the incumbent. Now let's talk about the transformational evolution we're seeing in AI. Make no mistake, AI will create winners and losers. Winners will be trusted partners that provide advisory-led relationship-driven solutions to their clients for complex problems. They will have large platforms and global execution capabilities. They will have flat organizational structures with change makers in leadership roles. Winners will have embedded a culture of change, not constrained by traditional operating models and ways of working.

They will be de-siloed integrated enterprises with open data and information flow. And most importantly, they will have proprietary data at scale that crosses both the advisory and services businesses. As we discussed at Investor Day, we have already broken down every silo of every department, every data source, every technology. We are already deploying technologies that bring together our thought leadership, our data assets and our AI capabilities to create digital workflows that extend to every single one of our clients and our colleagues. The work that we have done structurally, operationally and most important, culturally, underpinned by a strategy to move up the value chain is exactly what this moment requires.

Now I'll turn the call over to Neil to discuss our financial results in more detail.

Thank you, Michelle, and good morning, everyone. Before I get started, a quick reminder, all comparisons are to the prior year and in local currency. Unless otherwise noted, all revenue figures refer to fee revenue. We exited 2025 with strong momentum, capping off a year of meaningful improvements. For the full year 2025, we achieved top line growth in every service line and every reporting region. We expanded adjusted EBITDA margin by 46 basis points while continuing to invest for organic growth. We generated over $290 million in free cash flow, well exceeding our targeted free cash flow conversion rate. And we ended the fourth quarter below 3x net leverage for the first time since 2022 after prepaying $300 million in principal during the year.

Looking at the year in more detail, revenue of $7.1 billion increased 7% and adjusted EBITDA grew 11% to $656 million. Adjusted EPS was $1.22, up 34% from last year and at the high end of our guidance range. We delivered $293 million in free cash flow for the year, representing 103% conversion rate and $126 million improvement versus 2024. The key drivers of our cash flow performance were strong earnings growth, continued prudent working capital management, higher accrued commissions and reduced interest costs. We believe this strength in free cash flow gives us ample flexibility to continue to balance our organic growth investments with our deleveraging targets. We closed the year with approximately $800 million in cash and cash equivalents and $1.8 billion in total liquidity. Our leverage ratio improved to 2.9x from 3.8x at the end of 2024.

Moving on to our quarterly results. Fourth quarter revenue of $2 billion increased by 7%. Capital Markets revenue was up 15% globally as transaction markets remained healthy. Our leasing business delivered another strong quarter, growing 5% and reaching the highest quarterly level ever for Cushman & Wakefield. Adjusted EBITDA of $239 million increased 5% as revenue growth was balanced against our ongoing ramp-up in strategic investments and higher annual health care costs, which were weighted towards the fourth quarter.

Before moving on, I want to address 2 noncash items we incurred during the fourth quarter. We recorded $177 million impairment to our Greystone joint venture as a result of lower future earnings expectations relative to when we made the acquisition. As you recall, we made the Greystone acquisition in 2021 when market conditions and interest rates were much different. We continue to expect Greystone to be a solid contributor to earnings going forward, just at a slower pace than we originally forecasted. For 2025, Greystone contributed $36 million of adjusted EBITDA, which we believe is a reasonable run rate going forward.

Secondly, we recorded a roughly $27 million gain included in other income, which primarily represents our investment in an international facilities management company that went public in Q4. Both of these items are noncash and excluded from adjusted EBITDA and adjusted net income. Moving to service line performance for the quarter. In the Americas, leasing grew 5% with continued strength in office and industrial, driven by higher deal count and increased revenue per lease as clients continue to prioritize a high-quality employee experience.

In industrial, demand remains centered on large modern facilities, and the market is seeing substantial demand for sites over 500,000 square feet that can support automation and higher power requirements. Across both office and industrial asset classes, we continue to see opportunities for our project management businesses as occupiers and investors seek to elevate the quality of their properties to meet evolving market demand, particularly as new construction activity declines. In APAC, leasing revenue increased 5%, driven by strength in India and improvements in Greater China. In EMEA, leasing grew 7%, driven by strength in Netherlands, Belgium and Poland.

Turning to capital markets. Our efforts to expand our platform continue to drive positive results. In the quarter, we achieved 15% growth globally following 36% growth in the fourth quarter of the prior year. This sustained momentum reflects our ongoing investments in hiring top talent and strengthening our platform, which continue to enhance our competitive positioning. Americas Capital Markets grew 19% with particular strength in office and retail. EMEA grew 9%, led by the U.K., Belgium and Spain. APAC Capital Markets declined 5%, primarily due to a difficult prior year comparison in Japan. Finally, turning to services. Fourth quarter services revenue grew 6% globally as we drove strong project management revenues across our global platform. We continue to prioritize steady profitable growth in this segment as we move up the value chain with our clients.

Moving now to our 2026 outlook. In line with the 3-year targets we provided at our Investor Day, we anticipate 2026 revenue growth of 6% to 8%, with full year service line growth trends similar to 2025. We anticipate adjusted EPS growth of 15% to 20% with expected free cash flow conversion in the 60% to 80% range. We also plan to continue delevering consistent with our 3-year target of reaching 2x leverage in 2028. In closing, our teams executed exceptionally well in 2025, driving strong growth across our global platform, meaningfully improving free cash flow and investing in the business while also reducing our leverage. This strong performance gives us confidence in our 2026 and 3-year targets as we focus on continuing to deliver long-term value to our shareholders.

Now I'll turn the call back over to Michelle.

Thank you, Neil. We have entered 2026 with confidence and momentum supported by a defined set of strategic priorities, a stronger balance sheet and operating leverage embedded across our platform. As we stated in December, our opportunity is undeniable and our path is clear. Our model aligns client success with our success, and we have compelling financial targets that we believe will generate long-term shareholder value. We are meeting the AI transformation with insight and actionable advice on how this will shape the built world. We invite you to join us on Monday on a webcast hosted by our think tank, where they will be presenting the first phase in a body of work focused on answering the most critical questions around AI and its impact on the commercial real estate industry. A big thank you to all of our employees who are change makers, enterprise-first thinkers and who focus on value creation for our clients and shareholders every day.

Now I'll turn the call over to the operator for questions.

[Operator Instructions]

The first question comes from Julien Blouin with Goldman Sachs.

Michelle, I appreciate your comments on AI creating winners and losers. One of the topics or debates that's out there is related to fears that one of the losers could be mid-market or smaller deal size brokerage businesses given sort of less complexity of deals, greater standardization, greater prevalence of digital buyers. When we look at your sort of average transaction size, it does seem to skew lower than some of your other peers. Wondering, do you think that, that is a real potential risk within the business?

Julien, thank you for question. We believe the concerns about AI disintermediating the commercial real estate brokerage on whole are materially overstated. This is not the residential sector. And yes, there are commercial real estate transactions that are large, complex, negotiation-driven decisions, but there are also midsized deals that are complex and negotiation driven. And in each case, there's significant financial and operational risk to those individuals signing those leases. So we believe that AI is absolutely going to enhance underwriting or market intelligence, efficiency, but it's far more likely to augment a trusted adviser than replace them. Think about making a 5- to 10-year decision, think about the financial impact of that on a company and as to whether or not they would turn that decision over to AI. We do not believe that will be the case.

That's really helpful. And Neil, maybe on the EMEA side, top line results were strong, but the margin came in a little lower year-over-year. Just wondering, are you still confident of driving EMEA margin growth in EMEA after the services business sort of restructuring you affected?

Yes, absolutely, Julien. I think the way to look at EMEA is really to look at it on an annual basis. And as one looks at the full year, we saw very, very nice improvement in margin overall. We are particularly pleased with what we're seeing on the services side, both in property management and in project management. The fourth quarter, we did have a little bit of a decline in margin, but that was really just driven by the timing of certain onetime expenses. I feel very confident as we look forward.

The next question comes from Ronald Kamdem with Morgan Stanley.

Great. Just staying with the AI theme, if you think about -- we talked about sort of large, mid and small, but there's also sort of different property types, right, whether it's office, industrial and retail. And as you guys are sort of reunderwriting the business, do you -- how do you sort of think about the risk to the end markets across those sort of subsectors? And does that make you want to position differently?

Yes. Great question, Ron. Thank you. The call that I mentioned that we're hosting on Monday that you're all welcome to attend is the conversation and are presenting the answers to the question that you're answering because most of the dialogue in our industry has rightfully been focused around data centers and AI, but this goes much further. When you talk about industrial, what are the needs for an industrial asset going forward? What makes an office building compelling? Our researchers and experts have been studying AI's impact to GDP, employment, demand, vacancy, rent values and has implications to your point, across nearly every sector and office class. So I would encourage you to attend our call on Monday because we're going to be creating practical tools for our clients to get a look -- a first look at our new AI impact barometer, which is the first-of-its-kind framework to help both real estate investors and our occupier clients make better long-term real estate decisions by understanding the trend lines of AI's impact as it unfolds.

Great. And then my quick follow-up. Just wanted to double-click on the guidance a little bit. I appreciate you guys gave 3-year targets. And I think you said in your opening comments that services revenue growth would be comparable in '26 to '25. But wondering if you could sort of comment on leasing revenue growth, capital markets revenue growth and just margin trajectory for the year.

Yes, absolutely, Ron. So in my prepared remarks, I did say that we expect '26 to unfold in a very similar fashion to what we saw in '25. And that not only applies to overall revenue, but also the revenue growth of each of our service lines. So we're very pleased -- you asked specifically about leasing, very pleased with what we're seeing in leasing. We hit the highest numbers Cushman ever has in the fourth quarter, and we see that continued growth moving into 2026. Certainly, as we look, economic indicators are strong, pipelines look good. So we feel pretty good about '26. In terms of margin, we gave a 3-year guide on margin, but we don't give full year guidance on margin. And so I would focus on our EPS guide of the 15% to 20% and then the other color around each of the service lines.

The next question comes from Stephen Sheldon with William Blair.

Maybe starting with Michelle, I think one of the things you talked about in the Investor Day quite a bit was trying to drive even more cross-selling motions between business lines. So can you talk about some of the things you're working on as an organization as we think about 2026 to support better cross-selling activity this year? I guess what are some of the big initiatives that you guys are trying to push those...

Yes, certainly. Thank you. You've watched us shift around our senior level leadership. You've watched us reorganize to get ourselves set up for what we call the spine. But I think equally important and where AI comes into this conversation again is how AI is driving that flow of data and information. So if you think about desiloing an organization, it's one thing to do it structurally and organizationally, it's something else to have the data flow freely throughout the organization. So a big piece of what we're doing aside from tracking the cross-selling and adjusting people's compensation going forward as it relates to that is that in capital markets, we have a capital markets CRM. In legal, we have contract and obligation management using AI in asset services, we have a proprietary platform with Guided Insights. In leasing, we're using OneAdvise, which helps automate digital tour books, lease negotiation, benchmarks and GOS, we have space planning, kind of et cetera, et cetera, et cetera. And what that does is that really creates a very strong data lake for us to work with as we're cross-selling to our clients.

Got it. That's really helpful. And maybe just on capital deployment, really nice to see Cushman end the year with sub-3 turns of leverage. So I know you have the goal of reaching 2x by 2028. So how aggressive do you plan to be in 2026 in terms of focusing on delevering? Is that still the big priority? Or could you be more aggressive in other areas such as continued organic reinvestment and potentially M&A? How are you generally thinking about it?

Yes, certainly very pleased with what we've -- how leverage has come down and the $300 million prepayment. As we look to 2026, we sort of expect to maintain a balanced approach to how we think about capital allocation. So certainly, we will be looking at organic growth, as you mentioned, that's a key component of our growth in our 3-year plan. But we will also continue to reduce debt. As we said, at our Investor Day, our plan is to get to 2x in 2028. And so that will involve additional debt repayment. But I think balance is the best way to think about it.

The next question comes from Seth Bergey with Citi.

I guess just first off, could you provide a bit more color on what your exposure is to office? I think that's come up as a sector that's viewed as more likely to be disrupted by AI.

Yes, sure. Office for us, overall, if one looks at leasing in particular, we have -- our mix is roughly 55%. And then on the capital markets side, it's around 21%. So overall, just over 40% is the way in which we think about office.

Yes. And just talking a bit more about office. Seth, the -- there was a Wall Street Journal article that came out this week, some follow-up articles around delinquencies. There's a couple of things to note. First, we generally do not work in the Class B office space, and that is the space that we feel is going to be the most impacted by this transition. Again, I reflect you back to joining the call on Monday for further discussion around that. And that as there are increasing delinquencies in real estate, I want you to understand we don't own any real estate. And the most important driver of our results is really velocity. So if the increase in delinquencies lead to more buildings changing hands and a bit more price discovery, that's a net positive not only for our brokerage business, but also for our services business as this means they've got the opportunity to manage buildings as they change hands.

Great. And then maybe just sticking a little bit with the AI topic. Does it change the way you think about kind of headcount needs for different parts of the organization?

We think a lot about AI as a tool to empower our employees. Remember, we have combinations of people who are deep experts, a lot of skilled labor out there that's on site. we do not anticipate a massive reduction in our labor force and our workforce and our white-collar jobs. We actually see this as a great opportunity for us to build and grow the platform without necessarily adding people. And so that's a great operating leverage point for us using AI in combination with the employee.

The next question comes from Anthony Paolone with JPMorgan.

My first question relates to just your '26 guidance relative to your 3-year outlook. If I look at your revenue growth, it's basically the same thing you expect for '26 as you laid out for your 3-year goal. And if I step back and think about like the transactional businesses having been bouncing off of like lower levels, I would think that those comps get tougher as you look out over the next 3 years, maybe that growth slows. So I was wondering, do you -- is that something you all foresee in the future and thus have other parts of the business that you think accelerate while those maybe come back down to more normalized levels? Or do you think your system just will be more steady than what the market might deliver in the next few years?

Tony, thanks for the question. The capital markets recovery is certainly underway, but we believe it's still in the early stages. So pricing has largely reset, capital has returned and the recovery has room to run. So we have always spoken about how we think this is going to be a very steady uplift in capital markets over a couple of years. We have all the elements that are really shaping up to be healthy for these markets. And we don't think, by the way, a 25 basis point move by the Fed in one direction or another really changes this. Industrial leasing demand has reaccelerated. Of the 83 markets that we track, 55 have already registered positive net absorption in 2025, and we think that's going to continue. Part of this is also in balance to the fact that there's been such a limited amount of construction, Tony, over the last several years. That those assets of higher quality are going to continue to gain value, and we think there's still momentum in most of these asset classes at the higher quality level.

Okay. And then just a follow-up on the capital allocation side. Just any thoughts on stock buyback, just given what's happened to the stock AI-driven downturn?

Look, we're certainly evaluating share buybacks, especially given where the stock has been trading recently. We believe our share price right now is holding extraordinary value. However, in terms of capital allocation, our main priority is investing for organic growth and deleveraging the company. In the longer term, share buybacks will certainly be on the table.

The next question comes from Alex Kramm with UBS.

Just maybe this is definitely a follow-up from the 2026 guidance. Neil, can you maybe be a little bit more specific on the services side because you said same as last year, but there were a lot of moving pieces, organic, nonorganic, a couple of business shutdowns. So maybe just help us specifically there. And while you're on that topic of services, maybe just flesh out where you're the most excited. It sounds like project management is an area of strength, but maybe talk about what you're expecting in some of these other businesses in services.

Sure, Alex. In terms of the guide, I've provided sort of high-level ranges for the full year and each of the service lines, we expect to be very similar to what we saw this year. So I don't really have any much more color there other than that guidance. Your question on services is a good one. I think we had a very, very strong year in services. Essentially, we moved from flat services growth the year before to 6% growth, organic growth in 2025. And that really is the number that we are picking to. We've said all along that we expect services to be in the mid- to high single growth rate, and we feel very good about what we're seeing in that business and what we expect to see.

We had some great new wins in the year, and we've seen some real momentum. As you mentioned, we saw a strong improvement in project management in the back half of the year, especially outside the U.S. in EMEA and APAC. And we believe this is driven by confidence in the economy and confidence in people doing work and strong real estate fundamentals. So in Asset Services, we have a growing pipeline. Asset managers are and investors are reevaluating who is managing their buildings and how to manage that property, and we have a very, very strong presence there. So I think across all of our services lines, we expect some good momentum as we go into 2026.

Okay. No, that's helpful. And then just maybe very quickly on the margin side, I understand no specific guidance here, but maybe just flesh out a little bit the biggest areas of investing maybe by business line. But then also, I mean, you've been looking at efficiencies. I assume that's ongoing, maybe some areas that you're looking in particular? Or do you think the heavy lifting has been done here?

Alex, I think most of the heavy lifting on the cost side has been done, but that -- but we are maintaining our cost discipline, and that's a key part of everything we do, looking at profitability in our services business, looking at how we are driving growth in a profitable fashion. So cost has sort of become part of our culture, but it's not the key focus. The key focus is on growth as we go into 2026.

The next question comes from Mitch Germain with Citizens Bank.

Greystone, it just seems like was it the inputs in your calculation changed a bit because of the backdrop. Is that the way to consider the write-down?

That's exactly right. When we look at our assumptions for that acquisition as we look out compared to the original assumptions when we made the investment in 2021, we felt like adjusting the value of that joint venture was appropriate.

Got you. It seems like a different press release almost daily from you guys on new hiring. Michelle, I'm curious about how the company is approaching hiring in 2026. Do you think it's going to be greater than what you accomplished in 2025? Just some thoughts around that and maybe where the emphasis is in terms of where you're looking to add people.

Great. Thank you for the question. Yes, we'll continue on pace. We have a substantial budget for recruiting going into 2026. You'll continue to see us hire both in institutional capital markets globally and leasing as well. So no slowdown from us.

The next question comes from Brendan Lynch with Barclays.

Michelle, I wanted to follow up on your comment about capital markets still having room to run. What, if anything, needs to change to kind of keep things going at this level and get back to the levels seen in past cycles? Or is it just a matter of avoiding a recession that could kind of sustain the recent pace of growth?

Yes. I think to your point, avoiding any dramatic economic event will continue on pace here. And when you see the 10-year bumping around 4%, 4.5%, as most of us on this call know, the market likes that. You can transact in those zones, and we think that's most likely what's going to be happening over the next year plus. We continue to -- as I've said many times, we don't think there's going to be the kind of peakish recovery you saw in something like 2022 coming off a market that was totally shut down. We think there's just going to be continued growth, asset values are going to increase and transaction volume over time is going to increase as well.

Great. That's helpful. And Neil, to follow up on one of your comments about industrial demand being strong, particularly for sites that are greater than 500,000 square feet. Maybe you could talk a little bit more about how the customer base has evolved and what is driving the strength in demand for that particular size of asset?

Yes. So that reference is really particularly focused on the Americas. In the Americas, our industrial leasing was very strong, up 10%. And I think that the key thing is that we are continuing to benefit from flight quality. And so the sector has been very resilient. We certainly remain very optimistic about what we're seeing in the industrial space with the strong e-commerce, last mile delivery trends support these large industrial facilities. And so that certainly has been an area of strength for us and one that we see continuing into 2026.

Yes. And just to add a little more context there. Large users often seeking modern logistics facilities to support automation and higher power requirements were the primary drivers of demand, and we think that's what's going to keep industrial leasing on track. The overall vacancy rate has held steady for the past 3 quarters, and construction is down 62% from 2017. So you have a really healthy formula here for driving growth in industrial.

The next question comes from Patrick O'Shaughnessy with Raymond James.

Just one question for me. A bigger picture question on your multifamily origination strategy. Given some of the headwinds facing the Greystone JV, is there a potential for you to change up how you approach that multifamily origination business? And is the JV still the right structure versus owning the business outright?

That's a really interesting question and something we're certainly considering. I wouldn't say that we're going to change the way we do business. That business is pretty structured in the way that it operates. But let's just say we're being a little more hands-on in the JV with the operations and really helping to guide that management team to a more profitable business model.

This concludes our question-and-answer session. I would like to turn the conference back over to Michelle MacKay for closing remarks.

Thank you, everyone, and we hope to see you at our webcast on Monday, where we already have more than 2,000 clients registered to attend.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, and welcome to Cushman & Wakefield's 2025 Investor Day. We are thrilled to have you with us. I'm Megan McGrath, Head of Investor Relations for Cushman & Wakefield. It's great to see so many familiar faces in the audience. And if you're joining us virtually, thank you for giving us your time.

As you walked in today and throughout the day, I hope that you feel the energy and the pride that we have in our people and in our business and in our purpose. Our theme today driving profitable growth underscores our focus on building upon our foundation, operating with excellence and driving long-term shareholder value. We have a great agenda for you today, a packed agenda. You're going to hear from our Chief Executive, you're going to hear from CEO, Michelle MacKay. You're going to hear from our President and Chief Operating Officer, Andrew McDonald. You're going to hear from our CFO, Neil Johnston. And throughout the day, you're going to hear from other senior leaders at the firm through presentations and panel discussions, all talking about the opportunities we have to continue to grow our business and our platform.

Now a few housekeeping items for you today. In the unlikely event of an emergency, you have emergency exits here and to the back. And our presentation today contains forward-looking statements and non-GAAP financial measures. If you want more information on those, please see Slides 3 through 5 in our presentation.

Now before we begin, I want to show you this great short video. Thank you.

[Presentation]

Please welcome Global Chief Executive Officer, Michelle MacKay.

Good morning, everyone, and thank you for coming out today. We've got a full room here in New York City. I also want to thank those people who are live streaming or listening on the phone today. And I want to make a special call out to our Wall Street analysts, our investors and our creditors who've been supporters and analysts of this company for the last 2.5 years.

As many of you know, 2.5 years ago, I stepped into the role of CEO. It was a time to reevaluate the strategy of the company. We looked at all of our businesses, analyzing what we wanted to keep, what we wanted to help out and modify, what we wanted to walk away from. And in doing so, we hit the reset button on the organization. And what's compelling about that is that time allowed us to reset the foundations of the company and take a forward-looking point of view on where we wanted to go. In our possession at the time were 2 irreplaceable assets. The brand of Cushman & Wakefield, well-known across the globe as well as we have a global platform at our disposal. And what were we going to do with that? We outlined a strategy that I'll discuss with you this morning and created success for us, both financially and operationally. But beyond that strategy, we were able to complete a deep organizational shift in the way that we work which further underscore our ability to deliver for our shareholders.

So let's take a minute and talk about that strategy. In November of 2023, about 4 months after I took over, I put a new strategy in front of our Board of Directors. There were 3 pillars: strength in the core, operate with rigor and grow organically. Under each one of these pillars were multiple KPIs and targets to hit. And what you're going to hear today is that we've got a team of people who hit targets, track them. That is our goal. In terms of strengthening the core, there were multiple KPIs under this pillar but strengthening our legacy businesses, streamlining our operations and building the systems and structures to take us forward were critical in this process.

Let me pull up a couple of these KPIs for you. $0.5 billion of debt delevered in 2 years. In the fall, we repriced our term loan at the tightest credit spread in the history of Cushman & Wakefield. All in all, between repricings and deleveraging, we are saving $50 million a year in annual interest costs all achieved in 2 years. By any measuring stick, these are outstanding results and kudos to our team for accomplishing this.

In terms of operating with rigor, our second pillar, there was so much good work to do here. We wanted to de-silo our organization. Many of you have heard me talk about this. These companies historically have worked in a very siloed capacity. We wanted to connect the dots, bring people together, create greater connectivity in the group and increase the level of data that we use to make decisions. No gut feel stuff. We created a new way of looking at our own financials, data maps and data systems that roll up throughout the organization, and that allows our leaders to make decisions live. One of the struggles that we had is we were a cost off, cost on company. And we all know what that leads to, both financially and culturally.

So let's take a look at some of the KPIs here, a 90% increase in cash from '23 to '25. A 500 basis point reduction involuntary turnover of employees because when you create the right culture, which is distributed authority and accountability and you give people the tools to measure and be successful, they want to stay with you. when the path is clear, they know how to succeed. My favorite one on this chart, however, is the reduction in normalization. I mentioned cost off and cost on again, $100 million of reduction in normalizations between that 2-year window. Where we're going to spend today where we get the most questions is how are you going to drive growth. We've taken on a builder's model, an organic model and how we are going to drive growth. We had to have stabilized the core and be able to operate with rigor in order for an organic model to be successful. We are now a future-facing client and data-centric operating model and culture.

Let's talk about some of the KPIs here. 8 quarters of leasing growth, growth in capital markets, growth in services. This is what we've done. What we're going to talk to you about is accelerating this path now. Scaling our momentum, stabilizing the core operating with rigor, funding and fueling growth, the outcomes of all of this is a client that wants Cushman & Wakefield to win, a business that has the right to win across the globe. There are places that we need to build ourselves out more fully, and you will hear about that today. High-growth areas for us, multi-market leasing, global institutional capital markets, and I say global because that is what is important, not just institutional capital markets. You will hear about how the top real estate investors in the world today are across the world today, and we need to be there for them, too.

You're also going to hear about data centers. That is a hot topic. We're going to bring our experts to the table. You're going to see what we're all about. And we're going to talk about going up the value chain of higher technical services. These are higher-margin businesses where we are a deep expert. Specifically on the services side, we're going to talk about client retention. We're going to talk about the cross-sell. We're going to talk about what we've done organizationally to ensure that this is on the front of everyone's mind when they talk to or approach the client. This is the thing about Cushman & Wakefield. The opportunity is undeniable and the path is clear. We are a client-centric model but we align ourselves to their success. We do not show up in any capacity to dictate to the client, we come through as the consultant and as the adviser bringing the entire platform to bear. And at the end of the day, we have a compelling organic growth story that creates substantial value to our shareholders.

Now to start our day off, I am going to bring out to you, Andrew McDonald, my partner, Global President and COO, who has overseen the reorganization of this company. He's going to talk to you about the foundation that we are building our organic growth model on. So without further ado, I give you Andrew McDonald.

Thank you very much, Michelle. Thank you, and good morning to you all. Michelle just outlined our 3 strategic pillars: strengthening the core, operating with rigor and driving organic growth. And as our operating model that connects those 3 pillars. I see it really as the structure that holds the firm together and enables us to drive performance.

And soon after Michelle and I took on our roles 2.5 years ago, as Michelle said, I began to have some conversations with Michelle about an opportunity, an opportunity, frankly, we both saw, the one that I've been thinking about for quite some time, and that was the opportunity to transform and modernize our operating model, how we went to market, how we went to market across all regions and in all sectors and all segments. And one of the great advantages we have as a global company is that we clearly have clients all over the world. What that allows us to do is have conversations and listen, right? Listen and try to understand what drives our clients' performances. What keeps them up at night, right? What they seek in an adviser. And what we hear over and over and what we have been hearing over and over is that all of our clients, whether they be on the investor side or the occupier side, are living in a more and more complex world, and Michelle made mention of that.

And it's in that complex world where this organization model needs to change. So why change our operating model? Well, in a world where clients are giving more complex, there's one advantage and that is -- my apologies. And there's one advantage, and that is navigating our complex market dynamics. I apologize, let me back up for a second. One of the things that we constantly hear with our clients, both on the investor and occupier side, is this complex environment they operate in, right? So on the investor side, they're operating usually across dozens and dozens of markets all over the world, which carry with it individual market dynamics, complex market dynamics, right? Macro volatility and regulatory complexity.

Now on the occupier side, it's quite usual for our global occupier clients to hold hundreds of leases, with annual rent spend into the hundreds of millions of dollars, also navigating their own complexities of workforce and workplace needs and operational demands that literally did not exist a decade ago. So it is within this context of this increased complexity, increasing demands of our services and being connected driving closer to our clients, that we came together 2.5 years ago, just after those conversations I have with Michelle and look deep within ourselves, and try to define what the next-generation real estate partner look like. And so we can with 5 principles, 5 principles that we believe now guide our Cushman way.

And the first principle is that every client of Cushman & Wakefield, regardless of size and regardless of the complexity of the mandate that the hires for will receive frictionless and full access to our platform. The second is that we remain agile. We remain agile and entrepreneurial. It's important for us to flex with our clients, grow within asset classes, grow within markets, help them scale and if they need to rationalize, help them rationalize their portfolios. The third principle is all about consistency. There will be one standard of excellence regardless of whether we're hired in Singapore or Berlin or here in New York. There is one Cushman way. The fourth principle is that we will be simple to navigate because we'll be globally integrated. The world is too complex. We may make it easy for our clients to be able to navigate. We will be connectors.

And the fifth principle is all about data. You heard Michelle mention that we use data and analytics to make all of our own decisions. And so therefore, all of our solutions will be carried through data and analytics for our clients. And when you connect this platform, when it's fully globally connected, the benefits hit all stakeholders. Our clients receive greater, better and more consistent service, right? Our talent has greater opportunities for growth internally because we have centralized, and we believe will bring long-term shareholder value to our investors. And that is because we have expanded client relationships because we will have stronger retention and higher win rates will drive productivity, and we'll increase our operating leverage, all KPIs that we measure.

So a very natural question is, where are we on this journey? Well, we believe we're about 60% of the way there. If I go back to that early conversations with Michelle 2.5 years ago, we are under that thumb column. The brand was performing. We weren't losing, but if we're honest, our teams were fragmented. Our data was held locally and in disconnected systems. And there's a high variability in client experience, sometimes even within the own city, if we're honest. And today, we're in that middle com. We are more globally connected today than we've ever been. Our go-to-market is embedded across regions. We have centralized resources. And we have built a foundation, not just in our tech stack, but in our operational capabilities where we believe we can grow efficiently and at scale.

But that's where we are today. What's exciting is about where we're going. And where we're going is on the far end of this, and that is to be a globally integrated and connected and fully digitally enabled real estate services platform. And we're going to get there by the end of 2028. And I have great confidence in that time line in 2028 because of the incredible strides that we've made in the last 2.5 years. The strides we've made in how we deliver our services, how we've literally structured the firm and how we've improved and matured our talent model, our talent management model. If I take a look at just the delivery, 70% of our global revenue is already under digital transformation, full digital transformation. We have proven that we can drive productivity to our frontline advisers to our brokerage population. In 2 years, we've seen a 30% production gain in our average for American brokers because we've instituted digital workflows. We've trained on new processes. We're sector-driven. We become specialized.

And if I take a look at our structure, this is all the work we've done to de-silo and to make sure that we have consistency that our brand shows up in a similar fashion across jurisdictions. We've reorged every one of our 3 regions, Americas, APAC and America to do just that, to de silo. And in doing so, we've been able to centralize 100% of our global functions. And if I take a look at what we've done with our talent, I'm particularly proud of this. 60% of our global leadership and P&L leads are new to their roles in the last 2.5 years, and that is by design. We are purposely putting leaders in who promote collaboration who embody and promote enterprise thinking. And we're incredibly proud of the fact that our employee engagement scores continue to grow.

So as I think about this transformation, this last 2.5 years, and I think about the opportunity ahead of us, I'm reminded that moderate improvement in our core KPIs has the ability to drive significant, significant impact, 5% and 10% gains in the KPIs we currently measure of client expansion, win rate, productivity, retaining more of the business that we already have could drive an upwards of $1 billion of revenue. So none of this is possible without the incredible work in data and technology and AI. And Sal Companieh is going to come up and talk to us about how the use of technology, data, analytics and AI is accelerating this transformation.

Thank you. Good morning, everybody. I have the distinct honor of serving as the Chief Digital and Information Officer here at Cushman & Wakefield. I'd like to spend the morning giving you a little bit of a glimpse into our methodology, our technology stack, on our core integration with the business.

Let's start with our information transformation methodology. Core to what we're doing is driving deep proximity between data, digital and our business advisers. Our client outcomes are at the center of every hour and every dollar that we spend in transforming our technology stack. It's critical to us to build transformative technology to enable client outcomes, we're not in it to just build tech for tech. We do this with a framework of co-creation with our business partners, agile development, underpinned by the best-in-class data strategy, overcome with upskilling of our talent. Technology for the sake of technology will not make the impact bringing our colleagues along in a totally new way of working, connected enterprise first and digitally guided is what we're aiming for.

Co-creation at Cushman & Wakefield is quite literally us breaking down every silo of every department, every data source, every technology outcome and putting the client outcome at the center. We bring together diversified multi experiential resources to the table, and we put their end-to-end workflows, and we've unpacked them, we reimagine them in a moment when AI is at our fingertips. And we've deployed out technologies that bring together our thought leadership, our data assets, a digital workflow that actually extends to every single one of our clients and colleagues. But we've honored the fact that there's not one way of working Cushman & Wakefield across the board, there is a capital markets way of working. There's a property manager way of working. There's a facility manager. And we need to honor their diversity of the data, their workflow, their guidance that they need, and we do so by creating this deep proximity.

We've changed our technology operating model to match the business operating model. We've embedded technologists deep into the business because that proximity as listening to our clients, being advisers to our advisers is what allows us to put forward the best forward-looking technology in the market with master data to solve the most complex problems our clients are dealing with.

Let's look at one of these co-creation examples in practice. Our capital markets organization not too long ago, was acting in 30 different technologies, data sources, ways of working, completely siloed and bespoke across the organization. Today, I am extremely proud to tell you that we have deployed out our own proprietary application that takes global capital markets insights, brings it to the fingertips of our entire accountability team across the world. and allows them to have digitally guided AI-infused experiences to solve our investor correlations problems. How do we do this in our technology stack. We have a modern technology infrastructure built for the future, honoring our history. We start with physically de-siloing every data asset in the organization, connecting it with modern data technologies, integrating it across the organization. So it's such that the technology and data that we have in Singapore, in the U.S., in Australia, the data and insights available to our colleagues is bar none the best in the industry. We create this technology along with the capabilities that we have within our AI SAC, and we create reimagined workflows across the board. We put together the best of technologies in the market between SaaS platforms and innovators in the market. And we bring forward the Cushman way to life in a digitally guided environment.

Behind me, you'll see a series of logos as a small glimpse of the technologies in our ecosystem. The leading thinking here is it's going to take long-lasting enterprise-grade secure platforms integrated with innovative, up-and-coming technologies fueled by the power of our data, guided by critical thinking of institutions like Stanford, and we're putting forward that collective outcome in a guided experiential manner to every one of our colleagues around the world. We understand this is a total transformation. This is not a technology project. So when you look at an environment where our clients are dealing with the most complex environments they've dealt with, Cushman & Wakefield has proudly integrated. Our operating model that Andrew referred to, our leadership ecosystem that is grounded in enterprise thinking and client outcomes to enable our growth. We're more than 60% of the way there, and we have embedded an undeniably tethered digital and AI strategy to our business outcomes.

Now I would love to welcome to the stage one of my partners in crime in this transformation, Mr. Brad Kreiger.

All right. Thank you, Sal, and thank you all for being here. I'm excited to be here with you today. I'm going to start just summarizing what I heard, and I think I can help bring this to life through one of our most important service lines, which is our leasing business. I'm Brad Kreiger, I have the privilege of leading a management team in our Americas business, looking after our markets, our leasing.

What I heard Michelle say is there were 2 things that really stood out when she took the role. One was our global platform. The other was the undeniable Cushman & Wakefield brand. Heard Andrew talk about the operating model. It's not okay to do business the way we did business in the past. That won't meet the needs of what our clients need for us today. And there is no doubt that there is an opportunity in time right now to underpin that entire transformation with technology, with data and with AI, and that's how we'll serve our clients. I can't think of a better place to bring that to life than our leasing business. And as we were thinking about titling this presentation and how do you talk about growth from a place of strength, that really is where the leasing business is. This is not an evergreen or new opportunity that we're putting our toe into. We helped define the industry in how leasing came together over the last 100 years as a brand.

If you don't believe me on that, let's talk a little bit about it, I'll size this business for you. It's a $2 billion business globally today. That's a geographically diverse business. Basically, anywhere in the world that you see a concentration of commercial property, there are Cushman & Wakefield agents and leasing advisers who are the best in the business doing work on behalf of their clients. We like it for its diversity as well. The top 10 clients in this business make up a very small percentage of the overall revenue, and I'll show you in just a minute, the sheer scale of the transactions that we do on behalf of our clients every year. But maybe for this crowd, what we really like about this business is it has momentum, and it has growth. We've seen 8 quarters now of year-over-year steady growth, and there's no reason to think that, that won't continue. We have demand fueling the business from tailwinds. The office sector continues to recover. We're seeing more companies move into the office then talk about moving out of the office. And that's a trend that's been picking up steam and momentum for quite some time today.

In markets like industrial, where we saw a record explosion of growth throughout the pandemic just 5 years ago. We saw a construction boom that followed that and supply and demand got a little off kilter. We're now seeing that slow down. So construction is down just a bit and take up positive absorption has now been 2 quarters in a row. So demand for industrial space is coming back and retail might be the darling of the industry post pandemic environment as more of us more of all of humanity, I think, looks to have a human experience and they want to go back into spaces and have an experience.

On the tenant side, though, it's not all is rosy. It's a super complex world. Andrew talked about it, he hit it really, really well. If you're managing real estate on behalf of an organization big or small, there's no such thing as an easy commitment or an easy decision anymore. You don't just need someone to execute or negotiate a contract on your behalf, you need a partner and you need an adviser, and that pace of change only continues to pick up.

Let's take a look at the scale of the Cushman & Wakefield platform. And I thought of a lot of different ways of how we could show this and the simplest might just be. We'll start with the U.S. And if we took a map and put a pin in every place that Cushman & Wakefield represented either a landlord or a tenant over the last 12 months, you basically cover the entirety of the country. except for maybe some of those great plains states where there aren't buildings or people. When I look at this, I see scale, but what I really see is opportunity, okay? So 20,000 times a year, we have a client relationship. We have a landlord or a tenant relationship. We have a whole ecosystem supporting that transaction, which gives us the ability to take the kind of resource and platform that it takes to do some of the most complicated transactions in this industry. And if you think about the island that we're sitting on right now, you see Cushman & Wakefield grabbing headlines with our clients when they take on those very complex assignments with some of the best real estate advisers in the world behind them.

But we also do a lot of small work. We do a lot of work across multiple asset classes. We're the largest and most -- we have the top market share in the industrial business. And so if I look at that, how do we build and scale from that place of strength. Well, this is the strategy, and I love a good Venn diagram, if you can use a word like love when it comes to a Venn diagram. But I try to think all of the complex things that Cushman & Wakefield can do if you could just boil them into 2 things, it's really pretty simple. We either advise or we execute. And the fact that we can do both in synchronicity, that overlapping space, that is the differentiator. That's the value proposition of the company. So if I look at 20,000 times where we executed on behalf of our clients for transactions, small, medium and large, if we can bring the advisory part to the business to each of those individual relationships, that's how you grow a business as mature as Cushman & Wakefield leasing.

How do you size that opportunity? Well, this is one way. This is a graph that shows in the last year 2024, all of the number of transactions that took place, leasing deals over 100,000 square feet. And while the Fortune 500 clearly gets a lion's share of the opportunity in this industry, and we spend a lot of time helping serve those very complicated and large clients. There are just so many more organizations that fall just below the Fortune 500. These are still big companies. They may have dozens, they may have hundreds of locations in their portfolio, but they may not have the same level of consultative advisory around their entire business practice, and that's the opportunity for us. When we look at those 20,000 transactions and we studied how many of those were clients that had us doing work for them in multiple markets at one time, we found a little over half that revenue was driven from multi-market accounts, which means the other half, the lion's share of that business is one single adviser to one single client. That's the opportunity.

How do we bring that advisory capability to each of those clients and become their true business partner rather than just a transactional expert. Well, Andrew already gave you the punchline for how we do it. We need to operate differently and we already are today. On the left side of this slide shows the way the industry has sort of grown up doing business. It was a very local business with local agents, with local resources and support. You did work for local clients. Sometimes left and the right hand wouldn't even really communicate with a really large client. Today, that's totally changed. We're centralizing more and more every day for the sake of putting those resources in one common spot so that we can deploy the right resource to the right client assignment at the right time.

There are other benefits, too, as you start to centralize this work, saw hit on most of them, which is once you embed the technology around that core operating model, now you have the data and you have the insight. If I think about 20,000 transactions a year in this leasing business, there's 10 places that a client chose not to go, a tenant chose not to go in terms of a location. Think of the data in aggregate that, that demand creates and our ability now to look across that data to use tools like AI to ask questions of that. So as we serve clients, we have the absolute best intel in real-time to deliver at scale. And then the final thing in centralizing, it allows us to bring the best of the enterprise. Our team to come together to serve whatever the client needs. And so you'll hear from our services leaders in just a minute, our corporate outsourcing business already has a centralized hub more than 1,700 professionals in the place that we call the portfolio service center, where we deal with individual clients' needs as they come up as they need it.

If you flip that operating model on its head just a bit, and you put the client in the middle, this is really what the client cares about needs. They need specialized expertise. They don't just need a generic consultant to come in and talk about real estate or leasing or price per square foot. They need someone who has deep experience in sectors like the law firm sector, technology, the automotive industry, manufacturing, this list goes on and on and on. But for us to be efficient and scale that expertise, we put it in the middle of the organization, we wrap it in technology, then we're able to deliver that expertise at the local level. All of that sort of theoretical, I suppose, until you actually put some real kind of client service to this. We only live to serve our clients every day.

So what does one of the world's largest beverage companies a great investment bank and one of the leading auto manufacturers have in common. It's not their industry. It's the fact that they look at real estate differently than how you might think of it in a transactional nature. They look at real estate, not in one deal at a time, but how does it empower and help them grow their businesses, deal with the competing demands that they have every day. The other thing that this slide has in common, and these are all just examples of organizations who looked at Cushman & Wakefield and who chose Cushman & Wakefield to be that adviser to help them drive business advisory.

So to kind of summarize all of that up, there's really kind of 3 simple things we're going to do. We're going to scale all of that work that we've been building for over 100 years, all of that equity, all of that brand, data and intelligence, we're going to bring that to bear, not only on the largest organizations in the world, but to those companies who desperately need that resource today. We're going to transform this operating model, and it does 2 great things for us. First and foremost, always comes the client. We will deliver insight to the client in ways that we've never been able to before because of the technology. But we'll also raise our advisory productivity to the highest in the industry. attracting and retaining the best talent in the industry. And then finally, all of that helps us to evolve this huge scale business from one that is transactional into one that's truly an advisory-led account managed organization that can help serve those clients market to market.

So that's a leasing business. There's also a great story in capital markets. And to do that, let's bring up some of my colleagues. Thanks for coming out today. Appreciate it.

Please welcome back to the stage, Michelle MacKay, joined by President of Americas Capital Markets, Miles Treaster and Head of Investor Insights, Abby Corbett.

Today, we're going to talk capital markets. We probably get more questions around capital markets than any other business line in the company. I think it catches the headlines more often. I think people can really connect with it because you own a home, you finance a home. And so the questions that I deal with in terms of Cushman & Wakefield are largely focused around our institutional capital markets business, okay?

Before we start, I want to make sure I give this to a moment to introduce themselves and give you a little more of their background. Let's start with that, Miles.

Sure. Miles Treaster, I've been in institutional capital markets, my entire career, which is close to 30 years. I was a client of Cushman & Wakefield before coming here a year ago. So I have a very good lens on what's going on in institutional capital markets.

Abby Corbett. I am Head of Research here for Capital Markets at Cushman & Wakefield and part of our global think tank, which means I do a fair amount of global thinking with Miles and the team. And my background is also in institutional real estate, I have a background in private equity. I'm formally trained as an economist. And I spent most of my career building research and analytics platforms for private equity firms and several technology companies.

Great. Thank you. So Miles, you joined us about a year ago. Yes. high-impact player for us. Coming from the investor side, it's unusual, obviously, for someone coming from the investor side to come over to the advisory side. Can you tell us a little bit about the why for you?

Yes. I mean, for me, it was fairly obvious. I mean, Cushman & Wakefield has a wonderful team globally of talented capital markets professionals. And the business has evolved a lot over the last 20 years. Started off as a very regional business. And now the opportunity is to connect it globally. We have a tremendous footprint around the world with very skilled people. So it was kind of bringing this all together, and I saw the talent here, and I said, this is our opportunity to really grow.

Yes. And when you think about our current market position, which we're displaying up here for everyone to see, and you think about that opportunity. Talk to us a little bit about the way that you've decided to go about hiring and bringing in talent, and some of the systems and processes that we're using, one cap, which I believe Sal bought out in her conversation today. How this is all tying together for you?

Yes, it ties to give us perfectly with what we're doing. So we've kind of -- we're changing the business from a transactional led business to an advisory business. And that really having been on the client side, you know what that looks like when you see it. And so I think that gives me a very good purview of making those changes internally. So the people that we're recruiting here come with an advisory mindset and they really focus on the client. The client demands global solutions that are complex, And that's what advisers do.

Yes, absolutely. So let's talk a little bit, Abby, about the health of the market. It's another place where I get a lot of questions. What do we see for the next 3 years in global capital markets what do we think about in terms of, say, interest rates? Can you give us a bit of your thinking around the markets in this moment in time?

Yes. Well, I think we're at a fascinating time within our industry and within the kind of the trajectory of the industry. We've gone through such a really remarkable and powerful recalibration process over the better part of the last, call it, 2 years or so, where society in general, the markets, the financial markets, investors, the institutional ecosystem has really had to come to accept and adapt to normalized interest rates. And that's a wonderful place to be in, where that adaptation and recalibration process has really come to fruition.

And alongside that, we've had a repricing cycle take shape. And with that repricing cycle brings renewed conviction for a new chapter, be it may of capital deployment. And so I think where we stand today, as we look ahead, there's renewed conviction. We're seeing that clear signals within fundraising traction. Fundraising is up about 53% year-to-date. And to Miles' point, just on the global enterprise, the global platform that we're building here, 40% of that year-to-date fundraising activity is targeting more than one continent. So it's a clear signal that we will have global deployment ahead, and that's very important as we think about how we strategize both the platform, how we advise our clients and what we do from a data and analytics standpoint.

Yes. And let's talk about that dynamic with your recent hires and talk about how we have been speaking about capital markets now for a couple of years, not a hockey stick but progressive growth over the next couple of years you've obviously just hired more than 45 people into the organization. How do you see this all playing out now and coming together are always asking me about our growth model as it relates to capital markets, when is it going to kick in? And by how much?

Yes. I mean, I think that what we're doing is we're harnessing the data through one cap to really provide a global solution for clients. So the people that I'm bringing into the organization are really focused on delivering solutions to our client base, and that's going to be done through this technology and the leveraging of data. So I'd like to tell all of my capital markets recruits that data is the new gold.

Yes. And I know that out there in the competitive landscape, not everyone holds the same level of data and not everyone holds the same degree of research and commitment that we need to thought leadership, right? Abby, when you're using and building your research, how is it getting deployed throughout the organization so that people really have access to it.

Yes. Well, and I would say having been around for a couple of decades, not quite as long as Miles, but... It's so profound. You can, as a researcher, as an economist, you can build something that you're really excited about. But if it's not part of the ethos of the organization in terms of the desire to draw from that, I think it's very cultural here. So the way that we build it, the team, Kevin and I, as we update our forecast, we update our models. We're in the data every single day. We're using our proprietary data. We're overlaying that with our third-party source data.

And then really, we kind of funnel it into [ M2 ] structures, right? We have our thought leadership. We have daily and weekly calls. There's not a week that goes by that I'm not connected with our product console leadership with our capital markets leadership connectivity with the clients. So it's a multilayered process, but the foundation of it, of course, comes down to our key outputs, our thought leadership pieces and so on. And so it's a great place to continue to grow. And I think that's one of the exciting things about just where the platform is now and where we're headed.

Abby is being very modest because the clients. I've been here a year, and they asked for her research because it's so cutting edge with the think tank and everything you produce, having one cap being able to distribute it to our clients and having those discussions, very powerful.

Yes. I think that's a great sign, especially given that you're from the investor side that you really value the research. One of the things, I think, we actually don't talk about very often is much like our Wall Street analyst here we're not looking to give advice for the purpose of supporting a particular transaction. We're looking to give advice, right, and get in the door by being an adviser to our client first. And what you'll hear over the course of the day is that in many cases, we go into advice on a particular situation with a client. That's not actually the transaction that happens because we bring some broader thinking to the table in that moment.

That's right. We have a -- their actually a great example of that was a global pharmaceutical company that we started out coming in the door. We like to say capital markets as the tip of the spear because once we get into the transaction, we can actually sell through other services. That's huge.

Yes. And use -- this again reinforces this use of the enterprise, right, on pull and how we're really looking to have the conversation, provide as many services as possible. ultimately with the cross-sell and something that is really a new focus for the company going forward. We only have a minute left. I have this giant clock here sitting staring at me.

I'm going to ask you quickly what if you were to advise somebody today, what asset class would you choose? One asset class, if you only get one asset class or you think the most long-term value exists from an investment point of view?

Well, I would say 2 things. I would say office. Number one, just from a runway perspective, we've had such a remarkable and powerful reset and values there. So I think it offers new investors with a lot of runway for opportunistic returns. I will say this next cycle will be -- returns will be characterized more so by precise asset selection as opposed to sector level sweeping themes. So that's -- the complexity and nuance there requires the advisory relationship. And the second one would be retail, which I think Brad mentioned earlier, just given the really profound tight supply side conditions, the installation there on fundamentals and stable cash flows.

You took all my time. So I'm going to go industrial, and I think it's been chronically undersupplied for many, many years. Obviously, it started to pick up in the early 2020s through this -- through the pandemic. But really data centers. I mean if you're investing in the future of our country and the globe like a lot of investors are it's hard to argue that data centers and digital infrastructure is not going to be a place for dollars to go.

Yes. And that's a great setup. Thank you for our next panel. Thank you for coming out and sharing some of your expertise. For those of you that have further questions, there will be a half an hour period at the end of today where you can directly approach both of these 2 and ask them anything you like.

With that, I'm going to bring out Ali Greenwood to talk to you about data centers. Please welcome Vice Chair, Global Data Center Advisory, Ali Greenwood.

So I'm Ali Greenwood, Vice Chair of Cushman & Wakefield's Global Data Center Advisory Group. I'm so excited and honored to be here today to talk to you about the fastest growing asset class in real estate data centers. I've been doing nothing about data centers for a little over 15 years. And yes, data centers have existed for more than 15 years. I know there's been a lot of buzz in the media lately about data centers. What's the future of data centers, are we in a boom, are we in a bust, what does that look like. I'm here to tell you that I firmly believe that we are in the very early innings of this data center asset class and the tremendous amount of growth. And Cushman & Wakefield's data center platform is poised to continue to capture market share and generate an additional amount of revenue associated with that.

Why is that? Well, data centers run everything we do today, personally and professionally, enabling things like the work from home movement, streaming videos on Netflix or Hulu, stock trading at your fingertips. It's amazing the amount of things that we can do on our phones today, streaming the video of my son's fourth down catch in his football game last weekend, they got them to the Super Bowl, very excited. Everything we do happens on a server in a data center somewhere across the globe.

This growth in demand is unprecedented. As we're seeing here on this slide, in the Americas alone, we're poised to grow over 4x in capacity growth from the years past, twice in both EMEA and APAC. There's $6.7 trillion of expected spend from a CapEx perspective between now and 2030. That's an incredible amount. We're sitting at sub-2.5% vacancy rates across the globe in primary markets and 70-plus percent pre-leasing rates in an asset class for facilities that are not even coming online for potentially 3 to 5 years from now. This growth is here to stay, and this opportunity for Cushman & Wakefield to continue to capture market share and generate revenue. It is unsurmountable.

So what are we doing? What is Cushman & Wakefield doing in this space today? Well, data centers are not new to real estate and data centers are not new to Cushman & Wakefield. We are so excited to continue to build our platform out across multiple service lines to continue to service our clients in a very, very large growing list of clients as more and more capital gets raised and deployed into the space so that we can meet them at every stage of the life cycle of a data center. We do everything from helping them find the perfect site to buy for data centers and make sure that they get their best return on capital and the investment in this asset class and space. We build them, we operate them and run them, very mission-critical facilities. We help lease them, we capitalize them and we even monetize them. We continue to build out capacity across all these service lines, everything from brokerage to incentives, valuation and advisory teams, critical facility management, project development services, capital markets, several service lines touch the data centers and the requirements of our clients across the entire life cycle of a data center.

So what are our future growth priorities as it relates to this high-growing Fast asset class? Well, a key difference for us is our people. We continue to hire key resources so that we can put the best field or best people on the field for every single one of our clients and every single one of our data serve requirements. We focus on quality over quantity, making sure, again, that we have the right people and the right subject matter experts to continue to service the data center growth. We're meeting our clients where they need to be in the market. Staying ahead of market trends like AI and machine learning, again, making sure that we're in front of these trends so that we're going and skating where the puck is going and not trying to catch up. Data centers are very fast evolving, changing data center asset class just like technology continues to change every single day.

And then our data, our access, our technology. We're listening to what our clients want, the tools they need, and we're collaborating with them on projects like Athena, for example, to continue to make sure that they're getting the data and the resources they need to make the best decisions around their data center portfolio and their strategy. So I'm going to invite Michelle back on stage as well as my colleagues, John McWilliams and Michael Koeller for a further deep dive and fireside chat around data centers, the market and what Cushman and Wakefield's platform is doing to capitalize on that. Thank you.

Hi, everyone. I'd like to start off this panel the same way we started off, the last one that I did with each one of you giving a bit of a description about your history and expertise in the data center field. So we'll start with you, Ali.

Sure. So I've been doing data centers for little over 15 years, like I mentioned. And I really got my start from a data center perspective from one of the largest REIT operators in the space. which was a great way to learn the business. I really learned it from the number side up, finance background. So it's fun to understand what it means to build these things, what it costs to build them, what you need to lease them for, what does that ultimately mean for earnings per share for those stockholders. So is it a fascinating way to learn it and having the understanding of what the levers are when you're going through a real estate transaction from a data server perspective has been really, really valuable for our clients.

I'm sure. I'm sure. John.

Yes. John McWilliams, Head of Data Center Insights here at Cushman Whitefield. I've been in the industry for a while now. I've kind of grown in my responsibilities over time. So I started out working in local market research, left that after a while and went into a regional research role. Did that for a few years, went into consulting and then joined Cushman about 3.5 years ago.

Great. Michael.

Michael Koeller, I lead our Americas Data Center Advisory practice for global occupier services. I also have a data center background coming from one of the larger operator REITs in a sales and business development capacity.

Yes. We have a consistent theme between this panel and the last panel where we have people who are previously clients joining the organization, and really upping the sophistication of the kind of services that we can be providing with that deep knowledge of what the client wants. Let's start with Ali, you and I, 2 weeks ago now, we went out to see a data center together in New Jersey. And I love real estate. I love technical real estate. You obviously share that love with me. But it was even fascinating for me to understand how many levels of energy, redundancy, power and water. We see these things in the headlines. And then also this not in my backyard phenomenon around expanding data centers and how that's all playing out. Can you just talk a bit about this dynamic and the way that it impacts your job and how you're guiding our clients?

Sure. So I'll use an example of maybe more a typical site selection project. So we've had to become very, very, very educated as it relates to all the critical due diligence [indiscernible] assigns, if you will, on what makes the data center site suitable for data center development you told me 5 years ago, I would have spent 6-plus hours on the phone with utility companies all across the country on behalf of our clients to ensure that they're going to get the power, when are they going to get the power and how much is going to cost. It adds a tremendous amount to the overall development cost, and it's a really, really key important criteria.

So we really have to understand the nuances of utility companies and how that's changing and what the generation and the transmission looks like across the country. which is where tools like Athena are very, very helpful. We have to understand the fiber infrastructure coming in, to your point, the water infrastructure and the impact. And then as an industry, we help our clients educate the community on really what the impact is of a data center within their community. I think it's a very misunderstood industry. And so we've continued, as it's become bigger and it's become more streamlined in the media and the news, we're having to be an advocate on behalf and beside our clients, right, so that they can get their data center development out of the ground, monetize it with the way they intend it to and meet the demand that the market has for it, right? And again, like we talked about, it runs everything we do all day every day. So it's a critical part of our backbone.

Yes. And one of the things that was interesting to me -- one of the many things, by the way, is so technical, fascinating to walk one of these centers was the pipeline for future development that was not necessarily reliant on the AI boom. Just to be really clear, like you're making that point about checking your son's football game or various apps that we're using but we're all using more and more data in tech. And so therefore, naturally, there is a need for more and more storage. In the case of this particular operator, they had a 3-year forward pipeline that was not reliant on any kind of AI boom. Talk about that a little bit.

Yes. I mean, that is certainly a very, very high and fast-growing part of the data center industry, but there is an entire industry, underlying industry from cloud technology, financial services health care insurance, what we call kind of enterprise wholesale, which has seen tremendous growth year-over-year since we've ever started tracking it and well before I even entered the industry. And that has continue to grow. And part of that is even those companies, the Fortune 1000 companies figuring out the most effective way to use technology within their businesses.

So if you look at different cycles and say somebody is going through potentially a cost-cutting exercise as a corporation, it's one of the last things that gets cut, right, because technology enables them to run their business, potentially more effective generating revenue smarter, right? And so the growth as it relates to non-AI data center growth is absolutely -- is tremendous. And to your point, that particular operator is not alone. Every single one of these data center operators, we showed 70-plus percent pre-leasing, 2.5% vacancy rates for facilities that are not going to deliver for 3 to 5 years from now. And those are incredible statistics that shows you that growth is there for the foreseeable future in the space.

Yes. And the fundamentals are really driving something compelling here. Let's talk a bit about John, our tool, Athena. We speak about it as if everyone knows what it is. But maybe a bit about the building of it and some of the components or information that our clients get to garner by using that tool.

Yes. So Athena is a really powerful tool. It's our proprietary data center development site selection tool. Developing that tool was really putting together a large team of people that are familiar with this industry that work with our clients, right? Both at the enterprise level and even in single individual transactions, putting them all together and figuring out what our clients care about the most. When we're looking at sites all over the world. And we found that power is paramount to that. Of course, you've got fiber, you have the ability to look at natural disaster risks in that tool.

And then on top of that, we have our proprietary research data layered in there. So if you're looking at a site and there's transactions that have occurred around it, we have the ability to look at those, whether those are land sales or facility sales. All of that is baked into that tool. And so you can quickly in the idea of the viability of the site, both from the standpoint of history in the market and then from those individual criterias that those developers care about.

Yes. And one of the things that you mentioned in our conversation the other day was weather, and I found that really compelling. It's something I haven't thought about. But of course, if you've got areas in the country that are prone to tornado, right, or power outage, that's going to be something that any builder or occupier is going to need to know about and the tool consider something like that as well.

Absolutely, yes.

Yes. Michael, let's come to you next. You are our most recent in terms of joining the company, you came from an operator. You've been here about 9 months. Why did you come?

I would have to say it's the platform, the ability to support clients from end to end in terms of the data center life cycle as well as the growth story. I wanted to be part of that.

Yes. And tell me a little bit about our enterprise and where we exist across the globe in terms of data centers and how you find the integration of the firm? Is somebody newer to the company?

Being relatively new, I'm constantly interfacing with my global colleagues. We have close to 1,000 data center experts around the world, working with hyperscale clients, neo clouds, colo operators as well as enterprises.

Wow. And we're -- you spoke about this, but let's -- Ali, if you can take us back through the life cycle of a data center transaction and just check off which areas we're involved in. Sure. So initially, from a site selection perspective, not only are we using our technology platform, our tools, our data and our research, which is all custom and client based on that site selection project, that's where brokerage comes in, right? We're going in there. We're buying land site on behalf of our clients. Oftentimes, we're also negotiating incentives as part of that upfront, so they get involved as well, then we build them, right? So project development services, we have a business line that specifically works on data centers. Our project development services team can come in, help everybody stay on time, on budget, supply constraints are definitely real on our own as well as labor constraints, like everybody has talked about.

And then we run the facility. So a critical facility management team that goes in runs these mission-critical facilities, takes that risk profile away and helps everybody make sure that those run as the way that they intend to be as you talked about some of the redundancy. And then we have debt and equity teams, capital markets teams that are able to develop capital around those facilities, interact with lenders, interactive banks. Our valuation and advisory team is also involved in that aspect of it, right, doing appraisal work on behalf of the data center clients that we have. And then at the end of the day, if somebody is building up a portfolio or has a one-off corporate sale leaseback, something like that, we're able to take those to the market with our capital markets.

Yes. That's obviously pretty robust, right? You have all the tools and the talent at your disposal. Obviously, over the past 1.5 years, we've been putting in incremental funding because this is a big area of organic growth for us. We see the future. We don't think we have to rely on the AI boom for that market to continue to grow.

I'm going to do a little speed session with you all now. This one is kind of fun because we all have our thoughts around data, technology, what it means. A lot of questions around the space. But what do you think is misunderstood? If each one of you can think of a concept or an idea that's misunderstood about data centers.

Yes. I think the first one would be, there's this understanding that the data centers live in the cloud, the cloud is just floating out in the air, right? Or all this demand is up in the cloud. Well, the cloud lives in a data center, right? It has to be in 4 walls. And so everything like we've talked to. It's a cloud box. It is a cloud box. It's got very specialized cooling and infrastructure and all the things that we talked about. So I think that's one of the biggest misunderstandings is all of this demand and growth from us is again individually as well as professionally, that's living on a physical server that sits in a data center somewhere in the world. So even if you think that your company is starting to outsource things to the public cloud, that doesn't mean it's all the sudden floating data in the air, right, is living in a data center.

Okay. Great one.

Yes. So Ali mentioned this earlier, so I won't spend too much time on it, but one of the things that I think is really misunderstood in this sector is that, like you said, AI is not the sole driver of demand here, okay? So we have what we consider to be foundational or legacy demand consisting of cloud computing and data storage, data processing, things like that. And then you have AI as well. Both are growing, right, and continue to grow. Just AI is growing at a much faster pace.

Just a little tidbit of support behind that. So if we look at the amount of data that's created captured and consumed in the world, we've seen an exponential growth curve there. So we're at 181 zettabytes in 2025. 2016 when the cloud computing boom took off, we were at about 18. So 10x increase over time. And going out to 2030, we're projecting reaching the yottabyte era. So to put that in perspective, 1 zettabyte is about the equivalent of 250 billion copies of DieHard. So -- yes. About 4 gigs. So 250 billion copies of that movie.

All right. Wow. All right, Michael, I don't know how you're going to follow that one up. But...

I don't know either. There is a Christmas movie, by the way. But that -- I think one thing that is misunderstood is that data centers are -- they run themselves, that it's a set it and forget it type of facility. When resiliency and redundancy are so important and need to be looked at. I think we've seen in the news recently, how much an outage can affect not only a company, but also the consumer.

Great. Okay. Well, thank you all for your time today. I'm sure you're going to get numerous questions from the group out here once we take a break. We're going to take a break, I think, for about 10 minutes and then come back for a conversation around services. Thank you.

[Break]

Please welcome back to the stage, Andrew McDonald, joined by Mia Mends, Chief Executive Officer, C&W Services; Marla Maloney, Co-Chief Executive Officer, Americas; Aubrey Waddell, Chief Executive Officer, Global Occupier Services right.

Well, hello, and welcome back from the break. We've had the opportunity to hear from our leasing plans and our growth plans and our strategy. We've heard about our capital markets plans. We certainly heard about data center, now is the opportunity to dive a little deeper into our services business.

And just to provide a little bit of context to our services business, it employs 3/4 of our workforce, about half of our total revenue. We manage about 6 billion square feet around the globe, and we break up our services business into 4 segments represented by the 3 leaders we have in front of you today, and they'll get an opportunity to tell you which ones they represent. But think of it this way, property management, that is the day-to-day operations of the real estate across all asset classes. Property -- Facility services, which is our self-perform business, which includes janitorial, mechanical and engineering. Facilities management, which is our bundled services for global occupiers and project management. So think of that primarily as a managing capital construction projects.

So while each one of these service lines is unique, there are unifying drivers for shareholder value. And that, what I'd look at, it was a high proportion of recurring revenue certainly a long duration contract with high retention and a wonderful driver of free cash flow. And just a little bit of the journey that we've been on. In 2023, when our management team came in, we had an assessment of our services business. In 2024, we exited some nonperforming contracts and had a divestiture of a noncore asset. And then in 2025, you see that we have put together our transformation plan and be able to accelerate organic growth to 6%. And that's what I want this conversation to be while about, what's next. And you'll hear this concept about moving up the value chain quite a bit.

And so I want to start right there in an answer a question to each one of our panelists, and I'm going to start with you, Mia. So as you hear about these -- you're about integrating the platform and what you've done to integrate the platform and moving up the value chain, can you give something that's on the ground hard example of where you've done that in your business?

Yes. Thank you, Andrew. First, I'm delighted to be on the stage of my colleagues, Marla and Aubrey. I do think we are operating as a connected team and creating the kind of client experience that is absolutely moving up the value chain. So I am Mia Mends, I lead C&W Services, which is the self-perform engine or platform for the enterprise.

So what do we mean about self-perform? So instead of using subcontractors, we deliver facility services by employing directly our teams, our workforce on the ground. And what is great about that model is that we are more tightly controlling scheduling cost and quality creating better outcomes for our clients and quite frankly, resulting in faster response times. So as we think about the history of C&W Services, we're a company that was founded 15 years ago as a cleaning company. So Janitorial is our legacy. It's what built the company. But today, it is technical services that is driving our growth. We are decisively moving up the value chain in engineering and maintenance. And we are very deeply embedded in what we call production maintenance and critical environments. So if you think about industries like logistics and manufacturing, our teams are managing or maintaining production equipment and delivering corrective, predictive and preventive maintenance that the programs that are improving asset conditions.

And what that does is result in a perfect near-perfect production levels, high throughput and maximizing uptime I love to talk about how all of this comes to life. When I think about our client Amazon, we'd love to talk about Amazon, one of our largest clients. We have been, over the last 10 years, moving up the automation curve with them. We started doing basic mechanical and electrical. Today, we maintain 80,000 robots. We manage over 200 miles of advanced conveyance. We performed maintenance at 135 million square feet across 250 sites. So that is scale, that is technical expertise and that is definitely operating rigor.

Yes, and certainly moving up the value chain. Thank you. It's a great one. So Marla, I'd like to come to you same kind of question, integrating platform and moving up the value chain.

Thank you, Andrew. So I'll start by just describing Investor Services. So I run the Investor Services business. And as I think about what that is, let's just lay a foundation. As Brad mentioned earlier, the client is at the center of everything that we do. So I'll paint a picture for you.

Our North Star is client investor returns, right? So we're thinking about maximizing returns and all of the things that enable that. It starts with capital markets. Miles mentioned the tip of the spear. There's financing involved. As we think about where that moves its leasing. It's retaining tenants. It's growing or increasing the opportunity for tenants to move in and just connecting the dots, then tenants need specialized services. They need construction management. Every space is different. Capital is deployed differently. Sometimes owners are investing in lobby renovations and monetization on hospitality, you're hearing a lot about that lately. From their property management steps in and they manage the day-to-day services of the business of the tenants, all of their needs contracting, there's client accounting in the mix, sustainability consulting, engineering and D&A is also in the investor platform. So valuation advisory the mark-to-market, the underwriting of the asset, due diligence, helping investors with that.

So we're surrounding the investor with enterprise resources. We're working as a team across that, I call it the deal well, right? If you think about the life cycle. We -- when we think about moving up the value chain, it oftentimes starts with a single transaction, and there's increased complexity as we move through the life cycle of the asset. I'll give you a specific example, a simple one. In 2022, we began working with a client called Real Capital Solutions. Capital Solutions came into the fold as a meeting DNA expertise. From there, our team members introduced the opportunity to leasing professionals, agency leasing, in particular, as we thought about what they needed and we continue to listen from an execution to advice, they wanted to invest in sustainability. That was an important goal of theirs.

And so our sustainability group looked at 16 assets across 8 markets as we thought about what they needed, they also needed to understand operating costs. So they asked us to do engineering audits across all their portfolio and property management then began to work with them, not only in the engineering audit process, but also just managing the day-to-day assets. Fast forward to today, just recently, our team members across the enterprise worked with them as they're thinking about how to deploy capital and continue to grow their business.

Yes. It's a wonderful example. Thank you. Aubrey, we'll end up with you on this question. So take as home on the [indiscernible].

Yes. Yes. So I'm Aubrey Waddell. I lead our Global Occupier Services business, which serves clients that use real estate to enable their business, but real estate is not in itself is not their core business. Their core business could be retail, it could be software development, it could be manufacturing, financial services, in particular. And I think -- we have really been experiencing this trend, but in financial services, in particular, also life sciences, where clients that had been using Cushman & Wakefield potentially for just a single transaction.

For example, a big financial services client headquartered here in New York had used Cushman & Wakefield for years, individual transactions. At office lease, maybe one particular project to build out new office space. That same client earlier this year, decided to come to market for a full suite of outsourced real estate services. And they invited us to bid on that opportunity. And that is not something that probably would have happened 3 or 4 years ago for us. And we were awarded global lease administration for that client across a 65 million square foot portfolio and global project management across a $3 billion annual capital plan for 2,200 locations. It's a tremendous example of bringing the power of the enterprise together for the benefit of that client. So they're buying facility management, transaction management, project management, lease administration, all from Cushman & Wakefield now.

It's a great example. It's clearly a theme that we keep on hitting on, which is how do you make 1 into 2 and 2 into 3. And so how would you describe that just around a dinner table to some of that? How do you make sure that we get leap latch on to an incredible town -- incredible client of ours for a long period of time and now all of a sudden, where we're doing one thing, we're doing [ 9 ].

Well, it's an evolution, I will say. Now the dinner -- my children don't know what I do. But it's getting -- having the client get to know us and really understand that we do have scale, I think there was a misunderstanding for a lot of years that we didn't have the scale that we would need to serve a client event because we're organized. We've got 40,000 people and our services business. We serve clients in 80 countries. And we are now, to your point, interconnected in a way that we never were before.

Thank you. Appreciate it. So Marla, let me talk to the question is not necessarily only about margin. but we just talked about being more efficient in how we operate integrating the systems, moving up the value chain. So maybe if I could ask you to talk a little bit about the use of technology and the transformation you put into the businesses that you run and maybe touch on how that impacts margin a little bit, give an example.

I will, Andrew, thank you. First of all, this team manages 6 billion square feet. There's so much interconnectedness and technology is at the center of what we're trying to do to solve complex problems to create a flow-through. So as I think about what we deliver every day to investor clients, the anti-heroes many times are our client accounting. Think about it. Every building has a unique set of financials a unique set of reporting metrics. We have almost 750 accountants that work in our client accounting organization.

So when I think about margin, that's a cost center, but it's a really important deliverable that we deliver every month to clients. would it surprise you that we deliver almost 6,500 financials every month to clients. So a multiplier effect, as you think about the amount of labor that requires, the efficiency, the quality, the standards, stock compliance. So we're very calculated in how we think about the organization and transformation is drastically impacting how we work in that organization. Michelle mentioned earlier, operating with rigor. I think this is a really great example. As we think about those 6,500 financials, what we've done over the last 18 months as we've looked at those tests that are repetitive, that were manual that those 750 accountants are doing month after month after month that aren't high-value work. And we're thinking about things like client efficiency, can we deliver financials earlier. And so using AI and thinking about those repetitive tasks, also centralizing our workforce. We used to talk about employees, now talent includes a digital workforce.

So 50 digital employees down work within the client accounting organization, right? It's the 2 and from that Brad was talking to earlier that's just happened in the last 18 months. We're on a journey. We're really excited about the output, C&W benefits and clients win as well.

Excellent. Thank you. I want to get to 2 more questions before we end up here. So Mia, can I ask you to answer something in a similar way? that's in question?

Yes, absolutely. I actually really appreciate the question because we are leveraging technology as a differentiator, so automation, standardization, Internet of Things. So I'd love to give you a couple of examples. [ 1 week ] today are managing what we call an integrated connected self-performed platform. This is an engine, if you will, that is anchored by several key centers of excellence. So think operational innovation, asset performance, client success, safety, talent acquisition skills development, compliance, labor relations, sustainability, data and analytics. We are leveraging technology in an integrated way that allows us to ensure that we are optimizing the client experience at every step of the journey.

So there are 3 important examples that I'd love to share. So I mentioned Internet of Things, IoT. We are using temperature and motion sensors to move away from rigid preventative maintenance schedules. So by targeting our teams and effort where it's needed most, we're saving our clients 15%, up to 15% in preventative maintenance costs. The other thing I'd love to talk about is our safety platform. So we are absolutely outperforming the industry. If you think about one of the most important measures of safety. We call it Total Recordable Incident Rate, TRIR, we are 55% lower than industry average. So that accrues to the bottom line. Most important, we're making sure people go home safely every day.

Speaking of people, the thing that gives me the most pride in our business is our culture of team uplift. The work our people do. Our team members do. It's hard. It's not glamorous. But at Cushman & Wakefield, we believe this work is noble. We want our people to feel respected and valued and inspire to grow in their work. And so we also leverage this platform, this engine to train, think digital up-skilling certification programs, career pathways. This drives engagement. So today, we have a turnover rate that is 25% of versus an industry average of 75%. What that tells us is that a human-centered commitment to progress in our business drives retention, increases stability, leads to better performance and ensures that we're keeping our clients longer through retention. It's a win-win.

Thank you very much. Okay. Appreciate that. Aubrey, maybe last question, unless we have more minutes. We've talked a lot about the increased complexity in which our clients are operating and increased demands to solve challenging problems. What's something that you've been dealing with or something that you've been able to solve for a client of recent?

Yes. So I think an example is probably the best way to address that, and that's one that we're really, really proud of. We work with an incredibly successful fast casual restaurant chain and support them in their development plans. And a few years ago, they really embarked on a massive, very ambitious expansion plan. One that was so ambistuous and so massive that they just couldn't do it in-house with that team that they had. So they came to us and they said, "We need your help with everything in the development cycle", site selection, due diligence, entitlement, design, construction, commissioning and opening of these restaurants.

And over the past several years, we've delivered 600 freestanding restaurants for that client. We'll do another 100 in 2026. During that whole period, if you think about the complexities in the market, labor shortages that many of us have talked about, supply chain disruption of pandemic. The fact that we were able to help them navigate through that complexity to eliminate friction and get to market is really exciting. The most exciting thing is how we took time out of their development cycle, 15% shorter development cycle from picking a site to opening it. So if you think about -- and that equates to about 12 weeks. So if you think about a successful fast casual restaurant, how much money they make in 1 week, multiply that by 12. And then multiply that by 100, which is the number of stores we're going to deliver for them next year. The value is immense. The services that we provide more than pay for themselves. And I think it's a great example of what Michelle said in her opening, which is our success is really our client success.

Yes. I think -- and it's a wonderful way to end this panel. And I think what I think about when you tell that story and the stories that you just told and Marla, your examples, is that so much of this is beyond the execution of real estate much of what you all described is leveraging the real estate to solve corporate goals. And that's what real consulting, real risk management and real advice looks like. I think that is the evolution of our services business. It's probably similar to the evolution that you heard about capital markets, the evolution in our leasing business that this industry is moving towards, and that's where Cushman & Wakefield is moving itself towards.

So thank you very much for all the time, and I appreciate it.

Thank you.

Please welcome Global Chief Financial Officer, Neil Johnston.

Good morning, everyone. Great to see so many familiar faces in the audience. Thanks for being here. What you've heard about this morning is you've heard about the strong progress we've made over the last 2 years. We've highlighted our key operating strategies. What I'm excited to show you today is how all of this translates into a compelling financial model.

Our financial strategy is underpinned by 3 key tenets. The first is a unique and diversified platform in an attractive market. The second is a compelling 3-year plan. And the third is a business that is positioned for growth. So let's begin with the platform. Over the last 2 years, we've made tremendous progress. We've grown our earnings per share at a compound annual growth rate of 20%. We focused on free cash, and we've improved our free cash flow margin from 50% to 70%. And finally, we have paid off $0.5 billion of debt. Why is that important? Because we brought down our leverage by a turn down to 3.2x and we've reduced our interest cost by more than $50 million.

As we look at the platform, we have a differentiated platform of full global capabilities. Why is that important? It's important because we can bring all the capabilities to our clients and scale that platform. So as the business grows, our margins grow. We also have a balanced set of businesses. Half of our revenue comes from our services businesses. That business is resilient, recurring and drive strong free cash flow. The other half of our revenue comes from our advisory businesses, capital markets, leasing valuations. Why do we like that business because that business grows with high margin. So we have a very, very strong platform that underlies our overall financial framework.

Let's take a look at each of these service lines. The first one is our services business. As we've spoken about a number of times on our calls, we have completely retooled that business, focusing it on profitability and driving growth. We are retaining more business. We are winning more clients, and we are moving up the value chain. We're creating a sticky business that grows margins. We have a world-class leading global leasing platform. We set a target for ourselves of growing that business in the mid-teens this year, and we will end the year with growth in the 7% to 8% range. We're gaining market share in all of the key asset classes. We're leveraging the platform with unmeasured advice to our clients, and we're focusing on enterprise mandates, which drives our ability to grow the business across the platform.

We are unlocking new growth in our capital markets business. That business has rebounded this year. We expect it to grow in the 14% to 18% range. We're capturing global institutional clients. We're investing and growing our key talent. And finally, we're rolling out a one-of-a-kind technology platform that supports our advisers. Our fourth service line is what we used to call our appraisal business. We're moving it from appraisals, which is a great business into financial and advisory. And why is that important? It's important because we grow the business, we provide better advice to our clients, which makes the business much more sticky. The business becomes recurring and we grow the margin. This business has huge potential especially in a data-driven and AI world. So that's the platform.

Let's now talk about our financial model. This is the first time we are rolling out a 3-year plan. And that 3-year plan has 3-year targets. The plan is anchored on growing earnings per share. Our target over the next 3 years is to grow earnings per share at a compound annual growth rate of 15% to 20%. Plan is elegant in its simplicity. It relies on 3 key levers. The first is accelerating the top line. The second is driving margin, and the third is lowering our cost of capital, cost of debt and interest cost. As we look at our revenue, we've installed a growth mindset in the company. We're driving growth through winning more business, through expanding our enterprise relationships, and to capturing high-growth asset classes, a number of which you heard about today.

On the margin side, the good news here is we've already done the hard work. Over the last 4 years, we've taken more than $400 million out of the platform. We've integrated the business globally, and we continue to drive efficiency as the business scales. Our target here is to grow our margins by 150 basis points over the next 3 years. The final piece is the balance sheet. We've taken what was a liability and turned it into an asset. Over the last 2 years, we've saved $50 million of interest and the credit markets have noticed it. We've been able to reprice our debt 6x, and we've moved our tranche of term loan from [indiscernible] 400 down to [indiscernible] 250. We are not done, and this provides the third leg of our financial growth framework.

So as we put it all together, as I started with, pretty simple but the results are pretty compelling. Revenue growth, 6% to 8%, margin growth, 150 basis points, reduction of interest, earnings per share growth at a compound annual growth rate, 15% to 20%. We've shown you the platform, which supports the business. I've shown you the model. Why do we feel good about where we are because the business is exceptionally well positioned for profitable growth. Over the last 2 years, we have focused heavily on free cash flow conversion. If you asked someone in the business 3 years ago about free cash flow, they look at you with bewilderment. Now I was in Singapore and in the Q&A session, someone raised their hand and ask me about free cash flow. So we've permeated that throughout the organization, driving working capital, driving cash. We'll end the year with a free cash flow conversion rate of roughly 70%. That's up significantly from 50%. And we intend to hold that free cash flow conversion of somewhere between 60% and 80% over the full term of our financial plan.

Why is that important? We'll generate over $800 million of free cash flow over the next 3 years. And that is what powers our growth as we look out over the plan. We've introduced a much more disciplined and much more deliberate capital allocation process. And it's really focused in 2 key areas. The first is continuing to delever through paying down debt. And the second is driving organic growth through essentially 3 types of investments. The one is continuing to recruit and retain the best talent in the business. It's improving, enhancing and growing our services capabilities across the globe. And it's really leveraging the incredible data we have to be able to provide our clients with unmatched advice. Of course, we'll continue to look at M&A opportunities. If we can see tuck-in acquisitions, opportunities to improve our capabilities, things that will add to the platform, and we can find them at the right price, and they are accretive, we'll absolutely do accretive M&A, but that will be the accelerator to the plan.

So in conclusion, let me finish with where Michelle began. Our results demonstrate consistent financial performance. We've met our financial obligations primarily reducing leverage and reducing debt. And we've built an organization that is profit-focused, growth-focused, and reach to deliver on our financial framework. The final phase is really just scaling the momentum that we are currently seeing in the business to further accelerate revenue to enhance our earnings and to create a more financially resilient company. I personally am exceptionally excited about the opportunities for Cushman & Wakefield as we look out over the next 3 years. And I hope for spending time with us this morning creates the same level of confidence and excitement in each of you. Thanks very much.

So we are now going to open up to Q&A. We're going to reset the stage. And then Michelle or Andrew will join me on stage with Megan. Thanks very much.

Okay. Thanks, everybody. We are happy to take your questions. This is your time now. So please put your hand in the air. I will ask you 2 things before we get started. First of all, we'd love to stay focused on the long term fundamentals of the business. So we're not planning to update '25 guidance today. So if we could stay away from the fourth quarter and focus on the long term, given who you've got access to today, that will be much appreciated. [Operator Instructions]. Thank you.

Thanks, Tony Paolone, JPMorgan. I have a question on data centers since it's so topical. I was wondering if maybe you can give an example of a couple of the key services that you provide there and just how the how the dollars and sense works? Like what do you charge? What is the fee structure? What do you make margin that notes customer names, but just a little bit more context around just how it all flows and works?

Okay. Obviously, we're not going to comment on fee structures. Tony gave me a little smile when he asked that question. We're not going to go there. I think Ali did a pretty good job. I mean we touch every aspect of it. We didn't talk about the history of Cushman in the space, too. So I just want to hit on that. We've been in the data center space for about 15 years. So fees are made in land and site selection. They're made in overseeing construction of the asset. They're made in overseeing the management of those assets. And then on the financing side or acquisition side or appraisal side for the organization.

They can also be made in a broad consulting assignment where we go in and help to identify for a particular operator, where they should be locating or where there might be opportunity for them to purchase.

[ Brendan Lynch ] from Barclays here. And thanks for the presentation this morning. This has been really helpful. Neil, in terms of the 150 basis points of margin expansion, to what extent does that reflect operating leverage or efficiency initiatives and perhaps any change in the mix?

Sure. And first of all, just Megan always keeps me straight, I want to just correct one thing I said during the presentation. Now as I said, we expect at least to grow in the mid-teens. That was actually a capital markets reference, but just to set the record straight there. But now on to your question around margins, I think you summed it up very well. Those are the key drivers of margin as we look out over the next 3 years. It really is about continuing to drive efficiency. It is also just about leveraging the platform. The great news is we have, as I said, all the capabilities. So as the services business grows, we will see margin expand.

There is also -- as we think out over the plan, mix will clearly play a role in depending on how we see the businesses grow over the next 3 years, it could affect margins slightly, but we feel pretty convicted in that 150 basis points as we look out over the next 3 years.

Yes. And welcome. I know you're new to us, actually. I understood you put your first research, Pete, out on us yesterday. So we've been rebuilding and retooling this platform so that we can really create momentum and leverage of the platform itself. Building a global platform is rare. There are only a couple of us in the industry that have it, and now we're ready to size off of it. And to Neil's point, we're going to see margin accretion from that.

Ron Kamden from Morgan Stanley. You've done a lot of hiring from the slide on the capital market side. Just wondering if you could talk a little bit more about sort of over that 3-year horizon, what the hiring plan is and sort of the key areas that you're trying to fill this time period.

Okay. Do you want to take that one, Andrew?

Sure. Thank you for the question. So we see the capital markets build as a multiyear bill, just like the transformation that you've seen in the operating model. This first year has been incredibly successful, I think, by any one standards and including over 45 individuals. And these are -- it's important to know that these are individuals who have disparate skill sets from one another. These are people who are coming to us with the skill set that we want, that we want to grow within. And so your example of the question around data centers is a perfect application to that.

But they're getting going, right? It takes a little bit of time to get into the system. But these are, I think, as Miles said, enterprise thinking individuals, real leaders in their space, who are used to and desire to work across a large organization with the data and capabilities across jurisdictions and not just within their own markets. So we're building this global capital markets business, and that requires us to do so, not just here in the United States but as Miles has said and Michelle has said, in Western Europe and in Asia as well. So think of it as a multiyear process. And these individuals that joined us within this year give that a little bit of time for them to hit their stride.

There's definitely a feeling, though, future growth for us starting next year. It's really important to hit the capital markets cycle with the right timing. And I've also indicated that we're getting a lot more reverse inquiry than we used to get, frankly, based on the work that we've done on the platform and the open market opportunity that some of those very talented individuals have in our organization in particular.

Stephen Sheldon from William Blair. So really appreciate the 3-year targets through 2028. So I wanted to ask a little bit about the potential cadence there. Are you expecting that type of performance each year, including 2026? Or could some of the growth potentially be more front-end loaded given and we're in the early stages of the capital markets recovery? And then I also wanted to ask, you've talked about potential monetization improvement from things like client expansion, retention you gave some revenue uplift metrics. How were those factored into that 3-year target as well?

Sure. I can take that, Stephen. So as we look at the cadence over the next 3 years, we see it as pretty consistent. Remember, the guide is all around earnings per share. That's the focus, and that's what's really driving the 3-year framework. So as we look at 15% to 20%, I expect that each and every year. We do continue to invest and so that clearly also ways in to how the profits will move over the 3 years.

In terms of the opportunity that Andrew laid out, that is not specifically built into the plan. That was more sort of sensitivity analysis to help you and really understand the potential of the platform. And as we see benefits in each of those areas that can certainly help us as we grow.

[indiscernible] from JPMorgan. On the margin side, I have a question on what is the process like in terms of going through the contracts that's less profitable. I know you guys have been doing a great job on that front, how much it's been through at this point? And then looking out, I think you guys mentioned moving to midsize enterprise, does that give you actually a higher-margin apples-to-apples? Or is it lower? How does that play into the margin story of the 150 bps?

Do you want to take that one?

Yes, sure. Essentially, we've completed all of the work that we did to retool and restructure our services business. And so with that behind us, we certainly will continue to see margin growth. It really depends on each of the individual service lines that drive the services margin, but we feel very good about that 150 basis points and how much of the services contributes to us as how much of the advisory.

Just for a little more clarity on that in terms of clients or customers with contracts that were not accretive to us were done with that work.

Mitch Germain, Citizens. Andrew, you referenced 60% strategic plan completion. Maybe, a, what goes into measuring what that 60% is? And then b, do you ever get to 100%, given the evolving landscape client needs [indiscernible]? Maybe just talk about kind of progress from here.

Yes, it's a great question. So to answer the second part first, I don't know. I think the reality is that's an evergreen concept about transforming, making sure that you're staying ahead of where the puck is, right, making sure you're staying ahead over the problems that your clients are facing? I think that's going to be a forever exercise.

As it relates to why we believe we're at the midpoint, I've been here a long time, right? And I have some institutional knowledge of how we operated. And so I think that I use an element of that. I used where we were, and I mentioned the fact that we were -- our data and tech stack was fragmented at best. Our data collection was held locally, right? And I take a look at where we are today, and it's a world of difference. So I think I take a look at our functions, I take a look at where we are in technology. I take a look at where our advisers, how they're using technology, how we're feeding warm and hot leads to client to our advisers. I take a look at the productivity gains that we showed. And so there's a bit of a subjective element to that midpoint comment I made, but it certainly feels about right.

And as it relates to, are we going to be done at 100%? No, I mean I hope we're not. I think we -- that would be apathetic probably.

Yes. And we've spent a lot of time making sure that culturally. We have a group of individuals who accept change and look for it where it's necessary, especially in advance. Because if we're going to be guiding and aiding our clients in the best services and best solutions and bringing our whole enterprise, we have to be really agile. And any of us who spent our careers in commercial real estate, I know that there's a bit of an embedded thought that this is the way things are done. We don't work that way anymore.

Julien Blouin with Goldman Sachs. There's a lot of talk about moving up the value chain on the services front, and I thought that was really interesting. And maybe relating that to the M&A point, the tuck-in M&A point. As you think about maybe this would be for Andrew, as you think about what capabilities you would still like to add to the platform if Neil and Michelle were to give you a blank check, sort of what would you like to add that maybe is still a bit of -- not a weakness, but maybe a hole in your services offering?

Sure. Why don't I hit a little bit of where we're where we're maturing there. And then Michelle and I have had discussions around this and why don't you hit on what your blank check would be because you have a mature opinion about this as do I.

But listen, I think what we're trying to show just in that short 20 minutes up here, was this concept of moving up the value chain is all about solving corporate goals for clients and where we've moved, right? You heard Aubrey talked about working with one of the world's fastest-growing casual restaurant chains, right? And then you heard me talk about repairing robots and keeping conveyance going for Amazon, right? These are highly, highly technical skills that are required. And the people that we're hiring into that space have engineering backgrounds, right? And they're not -- we're moving up from kind of cleaning in the janitorial aspects of that business of 10 years ago, 15 years ago into stuff that is far stickier.

And as it relates to where we'd like to grow, I'd like to continue to grow in that space, right? We have a very, very strong reputation that we've earned in that space. And I see a tremendous amount of not to use the word space again, but tremendous amount of white space to grow into even with those exact clients that we just mentioned.

Yes. And we're taking a builder's first approach. We've spoken a bit about the reestablishment of the investment and Risk Committee, which we didn't talk about a lot here today. But to put down a more rigorous way to evaluate these opportunities that come from a very strong and long investment background. So being a builder means that we're going to build our own technical expertise generally. There are areas out there heating and cooling that I might consider just as a broad category, if that was something that we felt was smarter to acquire.

One of the things you have to keep in balance when you become highly acquisitive, as you all know, is that it is more difficult to have a fully integrated platform. So if we were to go about buying, in this case, a heating and cooling expert, we would want to be sure there was not just financial alignment but culture alignment with the organization.

This might be a good time to hit a question from the webcast. It's a little bit of a follow-up to that. I'm going to paraphrase this one. But can you talk a little bit about capital allocation priorities as we think about that $800 million in cash that we talked about generating over the next couple of years?

Were you directing that to any of us or is that...

Any of you.

I'm happy to go. As I said during the presentation, 2 key areas are around continuing to delever and then really driving our organic growth. So we'll continue with acquiring and training and growing our talent and driving our technical capabilities within the services group.

Seth Bergey at Citi. Just kind of as we think about -- you highlighted the data center business and then in the Capital Markets segment, Abby and Miles touched on kind of excitement around office and retail. Just in the context of some of your peers who may be more exposed to one type of asset class, kind of where do you see yourselves kind of as you grow these businesses kind of being more exposed to within the commercial real estate space?

I mean in terms of exposure issue, it's an interesting way to phrase it because we don't own any real estate some of our peers do. So we don't have direct exposure to these asset classes in the same way. We want to make sure that we're always building out, say, our leasing or capital markets business or talent across the board to be able to handle all the asset classes. Historically, we've been very strong in office, and that's paid us very well over the last couple of years. But as you see, we're also building really substantial platforms in alternate asset classes. We highlighted data centers, but we're also looking at areas like life science as well.

Patrick O'Shaughnessy from Raymond James. So you spent a lot of time today talking about becoming more global in nature and trying to go upmarket. Some of your larger peers have spoken about similar themes in recent years as well. How do you see yourselves as differentiated versus some of those larger firms against what you compete?

Yes. It's interesting. People ask me this question a lot. It's a great question. One of the reasons we put so many people in front of you today is because if I tell you we differentiate ourselves on talent, it doesn't ground you in what I'm talking about. What you saw today is differentiated talent, expertise across the board, people who are really activated and motivated and will drive this company to a new place, that is a big differentiator of ours. Second is that we want to bring the whole platform. We talk about it out loud or desiloed. That is a competitive advantage as far as we're concerned and the way that we've organized ourselves.

I'll review one more from the webcast, which is, can you talk a little bit about your macro assumptions over the next couple of years and how they underline your forecast?

Absolutely. So as we look out over that plan, we sort of expect the economy to keep going at a similar pace to what we've seen over the last year. So there's no hockey stick or anything built into that plan. We're seeing good momentum in the business, as I spoke about. And so that really is sort of coloring how we see things going forward.

And we're -- as those of you who have worked with us know we're very transparent individuals. And we are taking a point of view that is we want to create a model and put out the numbers that we put out today that are highly attainable, right? We've talked a bit about the icing on the cake, whether that's through some of the conversations Andrew's had or your comments around M&A or some of the questions we've had around that. This is the kind of guidance we give because we believe it is very attainable for the company.

Tony Paolone, JPMorgan, again. I think Brad talked about just the recovery in office and leasing there and the growth prospects. Do you have a view on what the impact might be of AI on office where you have a recovery on one hand, but on the other, the potential of losing jobs because of efficiency and where that all goes?

Yes. I mean we haven't obviously seen that translate yet. What we've actually seen so far with regard to AI as we're tracking and executing more and more deals as it relates to companies that are being built around AI. We also believe as a company that what we've seen past COVID is that corporations value their real estate. You might be talking about something that's back office, which we do. But a lot of the focus of what we do is in major markets in the U.S., and we don't believe you're going to see substantial implications in leasing in those major markets.

Stephen Sheldon with William Blair again. Wanted to ask about the voluntary turnover. I think you guys noted that's down, I think it was 520 basis points. So can you dig into that, I guess, a little bit more what's driving it? Where are you seeing that improvement by service line, by region, by level of seniority? And then is there anything to call -- I guess, could you call it maybe a couple, 2 or 3 factors that are kind of the biggest reasons that you think that voluntary turnover may be trending more favorable?

Sure. And I'll let you know that Holly Tyson, who's our Global Head of HR is here today, and you can get some more of the specifics with her after we break from questions. But I'll give you some broad swipes at this one. We've lost less of our high-potential talent. That's what that number represents. So we have a ranking schedule when we evaluate one through 5, 5 being your highest. So where that number has become really compelling is we're talking about losing less of our 4s and 5s.

The reason why I think they're saying is because we've gone through a clear articulation of a strategy and a plan. We distribute that information across the globe. Neil mentioned on a trip to Singapore that people are talking to him about free cash flow. This is what we're talking about. But we also give them ownership with accountability and that kind of responsibility. Historically, in a lot of large companies, power and decision-making is held at the center. We believe in our people because we're hiring the right people, and we say it out loud the way I'm saying it to you today, and that helps create a culture of stickiness.

Ron Kamden, Morgan Stanley again. I just wanted to double-click on the margin target for the next sort of 3 years, 150 basis points. Maybe can you just detail, how is that going to be executed through the organization? Does every business unit have a target that they're trying to hit, is number one. And number two, how do you think about the investments that you're making in hiring, which may take a little bit of time before you sort of get a payback. How is that factored in?

Great questions. I'll answer the second part first. The investments that we're making at organic investments are factored into that margin as we go forward. In terms of each of the individual businesses, yes, when we put together our annual plan and when we put together our 3-year plan, the businesses we basically give each of the businesses a target. And I think the biggest change is we've introduced a cost discipline within the company. So it's a growth mindset with cost discipline. And so each of the businesses are driving not only that top line but figuring out how to do it in the most cost-effective way. And that then rolls up to the overall margin growth.

Yes. And I want to underscore something that I said when I opened up today. We've created a new way for our own team to get at financial information in these data dashboard systems. So every 4 weeks, we come together and we've got the long-term plan in there, in this case, 3 to 5 years out, we've got the short term, the 6 month, the 1 month, and so we're able to step into it together. I will also say, culturally, what we're not doing is blaming someone from missing a target. We're working together as a team and a unit to find the solve because you can't be perfect. And if you end up missing margin by 25 basis points, but you did everything that we thought you should be doing we're going to work as a team to find it somewhere else in the organization.

I think we have time for one more question.

[indiscernible] Millennium. Just on that 150 basis points. I was hoping to get -- and I know you guys report geographically not by segment. But is it fair to think that the bulk of that 150 is going to come out of PMFM just given that cap markets leasing and valuation are unlikely to change dramatically? So is that a fair takeaway? Or is the 150 distributed due to scale and some geographic changes?

Adam, I think you're right. I think it is primarily in our services business. Although mix in our advisory as our advisory business grows slightly faster than our services business, you will see some of that mix playing in as well.

Great. Well, this is going to conclude our Q&A session. If you're here in the room with us, please feel free to come out into the empty room and talk with our senior leaders and learn more. We also have a table out there, if you didn't see it with a lot of our macro research there and some members of our think tank who would also love to answer your questions. Thank you so much for being with us today.

Thank you.

Good day, and welcome to the Cushman & Wakefield Third Quarter 2025 Earnings Call. [Operator Instructions] please note that this conference is being recorded. I would now like to turn the conference over to Megan McGrath, Head of Investor Relations. Thank you, and over to you.

Thank you, and welcome to Cushman & Wakefield's Third Quarter 2025 Earnings Conference Call. Earlier today, we issued a press release announcing our financial results for the period. This release, along with today's presentation, can be found on our Investor Relations website at ir.cushmanwakefield.com.

Please turn to the page in our presentation labeled Cautionary Note on Forward-Looking Statements. Today's presentation contains forward-looking statements based on our current forecast and estimates of future events. These statements should be considered estimates only, and actual results may differ materially. During today's call, we will refer to non-GAAP financial measures as outlined by SEC guidelines. Reconciliations of GAAP to non-GAAP financial measures, definitions of non-GAAP financial measures and other related information are found within the financial tables of our earnings release and the appendix of today's presentation.

Also, please note that throughout the presentation, comparisons and growth rates are to the comparable periods of 2024 and in local currency, unless otherwise stated. All revenue figures refer to fee revenue, unless otherwise noted, and any reference to organic growth excludes the impact of last year's divestiture of our non-core Services business.

And with that, I'd like to turn the call over to our CEO, Michelle MacKay.

Good morning, everyone, and thank you for joining us today. What you will see in our results is momentum across all areas of the business as our unique runway puts us in a position to continue to grow organically. This quarter, we delivered the largest third quarter leasing revenue in the history of the company. We set a new high watermark for third quarter cash flow generation. We announced an additional $100 million debt prepayment, bringing our total debt paydown to $500 million in a 2-year period. Year-to-date, we have improved adjusted EBITDA margin by 70 basis points compared to last year. We have continued to drive down our cost of capital with our recent term loan repricing achieving the lowest credit spread in the history of the company and the recent amendment of our revolver, which further lowered our borrowing costs. These actions have fueled strong year-to-date earnings growth.

And today, we are raising our 2025 adjusted earnings per share guidance for the second consecutive quarter to 30% to 35% growth. And while this is outstanding performance, consider that we have accomplished it while building out our data and AI infrastructure and continuing to invest organically for growth. We have onboarded new institutional capital markets advisers with total average gross revenue more than 200% higher than those recruited in all of 2024, hiring over 45 advisers in key markets to expand our global capital markets platform.

We are investing in our services platforms, accelerating our third quarter organic growth to 7%. We are investing in our project management platform, where EMEA revenues surged by 30% this quarter. We are investing and retaining our top leasing talent, driving a year-to-date increase in the number of large and mega deals by over 40%, underscoring our success in penetrating high-value opportunities. The performance is clear evidence of the accelerated pace at which we are executing our strategy, simultaneously expanding earnings and reducing leverage precisely as we committed to at the onset of our journey 2 years ago.

Now I'll hand the call over to Neil to provide a more detailed review of our third quarter results.

Thank you, Michelle, and good morning, everyone. Before I get started, a quick reminder, all comparisons are to the prior year and in local currency and organic figures exclude the impact of last year's divestiture of our non-core Services business. Unless otherwise noted, all revenue figures refer to fee revenue. Our third quarter results highlight 3 key themes. First, we are seeing clear momentum in our business as revenues expanded across our segments. Second, with improved execution, we are translating this accelerated growth into consistent bottom line performance, delivering our fifth consecutive quarter of year-over-year adjusted EPS growth. And third, this momentum and execution have allowed us to accelerate our balance sheet transformation, repaying $250 million of debt since July.

Q3 revenue of $1.8 billion increased 8% with organic revenue of 9%. Adjusted EBITDA rose 11% to $160 million and adjusted EBITDA margin expanded 23 basis points to 9%. Our year-to-date adjusted EBITDA margin growth of roughly 70 basis points reflects strong operating leverage and effective expense management aligned with our growth strategy. For the quarter, adjusted EPS grew by 26% year-over-year to $0.29 from $0.23 a year ago. Now turning to revenue performance by service line. Our leasing business, which grew 9% in the quarter, continues to exceed expectations.

In the Americas, leasing grew 11%, driven by a flight to quality in office and industrial. In both sectors, flight to quality remains a key theme and continues to lift average revenue per lease. Office activity remained robust and is becoming increasingly broad-based. High occupancy in premium buildings is driving rents higher and prompting tenants to consider the next tier of quality assets. This healthy underlying demand is also creating opportunities in areas such as project management as owners work to make their buildings more competitive. In industrial, demand is higher for modern facilities. For example, newer properties built after 2020 have recorded 196 million square feet of net absorption so far this year, accounting for virtually all of the industrial net absorption.

In EMEA, leasing grew 9% as the U.K. and Spain both performed well. In APAC, where leasing revenue declined 6%, strong performance in Singapore and Australia helped mitigate a tough comparison in Greater China. Overall, investment in the APAC region remained steady, and we believe the underlying outsourcing and development trends that have driven the region's success are still intact. Shifting to capital markets. The business continues to scale meaningfully, delivering 20% year-over-year growth. In the Americas, revenue grew 16% with double-digit growth across all asset classes and deal sizes, reflecting the depth and breadth of the market, supported by healthy fundamentals and sustained momentum.

Multifamily and office transactions were both particularly active, while industrial benefited from an increase in average deal size. Our work to enhance our capital markets platform has created strong momentum in this business line. Internationally, capital markets also performed well, with EMEA revenue up 14%, driven in large part by the Netherlands, where we executed a large debt financing deal. APAC Capital Markets revenue grew 84% with the largest contributions coming from India and Japan, where transactional markets remain healthy and institutional funds continue to flow.

Turning to Services. The Americas posted 6% organic Services revenue growth, driven primarily by the expansion of current mandates in facility services and facilities management. In EMEA, Services grew 17% as we've accelerated growth in our retooled project management business, winning new and expanding existing contracts in France and Italy. APAC recorded 6% Services growth, driven largely by new wins and expansions of existing business in project and facilities management, particularly in India and Greater China. Now I want to briefly address our earnings from equity method investments. In the third quarter, we reported an $8.6 million loss, down from a $12 million contribution a year ago. This year-over-year decline was impacted by 2 factors: first, a roughly $5 million decline in earnings from our Onewo joint venture in China due primarily to quarterly earnings timing.

For the full year, we expect Onewo's revenue to be relatively flat versus the prior year. Second, we recorded higher noncash MSR and loan loss provisions in our Greystone joint venture. As we noted last quarter, our adjusted net income and adjusted EBITDA now exclude noncash items related to Greystone to better reflect the JV's underlying performance. Excluding these noncash items, Greystone's core business generated $13 million of EBITDA this quarter, driven by solid underlying production volumes, which were up 18% versus the prior year. Moving to our balance sheet. We ended the quarter with net leverage of 3.4x, the lowest it's been since Q4 2022. Trailing 12-month free cash flow was $165 million, representing an approximately 61% conversion rate. We continue to expect to exit the year within our targeted range of 60% to 80% free cash flow conversion. We've also continued the significant progress we've made in reducing our interest burden.

During the third quarter, we prepaid $150 million and repriced approximately $950 million of our 2030 term loan debt, lowering the applicable interest rate by 50 basis points to SOFR plus 275. Shortly after quarter end, we repriced an additional $840 million of 2030 term loan debt, lowering the applicable interest rate by 25 basis points to SOFR plus 250, the most favorable credit spread in our history as a public company. And yesterday, we made an additional $100 million debt repayment, bringing our total debt prepayment in the past 2 years to $500 million, which represents a 15% reduction in our gross debt balance from just 2 years ago.

Looking ahead, we now expect full year leasing revenue to grow towards the high end of our 6% to 8% guidance range. We continue to expect mid-single-digit Services revenue growth, and we continue to expect full year capital markets revenue to grow in the mid- to high teens. Finally, we are raising our expectations for adjusted EPS and now anticipate full year 2025 adjusted EPS growth of 30% to 35%, ahead of our previously provided 25% to 35% target range. In summary, we are seeing strong momentum in our business with solid market trends bolstered by our strategic growth investments and improved operational performance. With that, I'll turn the call back over to Michelle.

Last quarter, I stated that you should continue to expect more from us on operational execution, cash flow, deleveraging and market share gains, and we have delivered on all fronts. Our teams are working with confidence and purpose, always with the client at the center of the conversation. And I want to thank our employees for everything they do to drive our success. We look forward to sharing our longer-term strategy with many of you at our Investor Day in early December.

Let me now hand the call back to the operator for questions.

[Operator Instructions] We have a first question from the line of Julien Blouin from Goldman Sachs.

Congrats on the quarter. Just looking at the Americas Capital Markets growth, you noted that you hired 45 advisers and gross revenues for those hires was 200% higher than 2024. I just wanted to get a sense, do you feel like you are still early in the process of seeing the flow-through impact from those hires sort of benefit your Americas Capital Markets growth? It just looks like maybe while the growth was strong in sort of the mid-teens range, maybe a touch below what we've seen from some of your peers.

Yes. Thanks for the question. We are definitely in the ramp-up stages with regard to our ability to execute in the markets and the capital markets in particular. And there's a lot of runway in front of us. So we anticipate continued growth going into 2026. We're not done building the platform either. And I just want to point out that we're building a global capital markets platform, not a U.S. institutional platform.

Got it. Okay. That's helpful. And maybe that sort of relates to my next question, which was going to be on EMEA margins. The year-over-year margin expansion in the quarter was quite a bit below what we saw last quarter despite what it sort of looked like similar capital markets and leasing top line growth and even stronger Services growth. Just wondering sort of what drove that on the margin side in terms of maybe incremental margins maybe being lower, does it have to do with some of these hiring initiatives or investments you're making in EMEA?

Yes. Sure, Julien. I'm happy to take that one. On a year-over-year basis, EMEA margins were up 170 basis points in the quarter, which was a very good result. Last quarter, we did benefit from some FX and incentive compensation timing, which did not recur to the same extent in the third quarter. If we look overall, we're very pleased with the improvement we're seeing in the margins there, both as a result, as you pointed out, of the retooling of our project management business as well as higher brokerage revenue. If we think about EMEA going forward, we do expect to see continued benefits from improving scale in brokerage and our margin profile in Services.

We have the next question from the line of Stephen Sheldon from William Blair.

Nice work here. I just want to -- starting in trends in EMEA, I guess, they were really strong across service lines again. So just curious in your view, how much of that is any change in the backdrop? Has that gotten better at all? So improving backdrop versus better execution? And then just would love some more detail on the factors supporting stronger Services growth there. I think you called out project management in the release and maybe noted a couple of countries in the commentary. But just any more detail on where you're seeing the strength by service line or geography would be helpful.

Okay. I'll start on that one, Stephen, and then turn it over to Neil for a little more backup. In terms of momentum in Europe, we're seeing leasing and capital markets observing growing strength across all of Europe from our side. The strong Cushman & Wakefield market performers in Q3 were U.K., Ireland, Netherlands, Spain. They all had strong year-over-year gains in both leasing and capital markets. And in general, when you think about what's driving the leasing fundamentals there, it's supported by good labor market resilience, healthy corporate profits. The office take-up continues to trend higher over there. Vacancy in Europe is the lowest of the 3 global regions. It's now under 10%. And when we talk about what's supporting capital markets, inflation over there returning to target, multiple rate cuts by the European Central Bank contributing to easier financing and stable economies and stronger euro boosting investor confidence. So like the U.S., investors are reengaging and taking advantage of better credit spreads there, improved liquidity and repriced assets.

Neil, is there anything else you want to add to that?

Yes. I think what I thought was quite encouraging in EMEA was the strength of our leasing business, particularly in the U.K. It's our biggest market by far in Europe, and leasing there was up 37%. So certainly, that was a good trend. And then if we look at capital markets, primarily the Netherlands, a little bit of some big deals coming through, but certainly, capital markets was positive. And then on the Services side, you asked what's sort of contributing on the Services side. It's really two things. It is project management, but it's also that design and build business, which we retooled. We're seeing improvements in margin in that business. And certainly, it's a big focus of ours as we go forward.

Very helpful. And then on the transactional lines. Great results there. I guess what trends have you seen so far in October? Any signs of things slowing down at all? Or I guess, have you -- has the momentum kind of continued into the early portion of the fourth quarter?

Yes, simply put the momentum is continuing into the fourth quarter.

Got it. And maybe one more then. Just how are you thinking about Cushman & Wakefield's opportunity to support the data center build-out and optimization? Is there more you can do there? Clearly, that has been and likely will continue to be a large area of growth. So how do you think about positioning Cushman to kind of Cushman & Wakefield to kind of capitalize on some of the activity there?

Yes, great timely topic here. We've been involved in data centers for a number of years and expect it to become a bigger part of our business going forward. It's been a key area of investment for us. We see data centers as exciting and growing like a lot of people do in the U.S. in particular, global data center capacity and U.S. capacity, as you may know, is expected to at least double over the next 5 years. So we're scaling up our business quickly. One of the interesting things here for a platform like ours in terms of the runway that we have is that it's an asset class that touches so many of our business lines in ways that really speak to our particular strength.

And what we're doing really well in data centers is we're bringing the full Cushman platform to bear to the clients. So we have a dedicated data center research team that puts out excellent comprehensive reports. Our advisers are some of the top data center advisers in the country, and they come from within the industry, and that's key. So they really understand the nuances of all the players. And we've been doing for many years, facilities management and services work for some of the top names in the industry and have done project management work in data centers across the globe. And importantly, we're incorporating our own key technology into this process, notably with our proprietary site selection tool. You've seen a lot of discussion around how do you find the right sites, how do you find the right power? What is the right power. Our product is called Athena, which was launched earlier this year and is streamlining the site selection process for our clients. So we're going to dig much deeper into this at Investor Day in December. So hopefully, we'll see you there and we can talk more about it.

We have the next question from the line of Anthony Paolone from JPMorgan.

On the Services side, it seems like after you guys have done almost a couple of years of work on that business, you're back to that sort of mid-single-digit or so growth level. Can you talk about just your confidence level of that kind of continuing on a go-forward basis, what the prospects for the business looks like? And also any comments on profitability because I think that was a big focal point of yours as well, but we can't quite see it as clearly in the results.

Okay. Yes. No problem, Tony. So as you've seen, we've made incredible progress this year in Services, which has seen accelerated growth for the past 3 quarters. And importantly here, we're moving up the value chain of services into more technical services, again, something we'll speak about at Investor Day. We've also successfully retooled the Services business in a number of ways. We talked about desiloing. That's a big deal for us. This means structural changes in the organization, leadership changes that we've made across the Americas and internationally and cultural changes, bringing leaders together in person often to think more strategically about the business on whole, how we can cross-pollinate, bringing it to our clients as one entity.

And secondly, we're focused on profitable growth, not growth for growth's sake. A lot of you heard me say that early on as we started to walk away from nonprofitable contracts in the Services business. This is not only good for our bottom line, but for our clients as well. It allows us to focus on the strategic value we bring to their real estate strategy, and it increases our customer retention as we move up the value chain in terms of technical services that we're providing. When we talk about growth going forward, Neil, do you want to comment on that?

Sure. If we think about Services growth, I think there are 2 areas that I would look at. The first one is our global occupier Services business, which just has huge potential. We have a tremendous platform tremendous opportunity to scale there without increasing our infrastructure. So that will scale very nicely from an operating leverage standpoint. And also, as Michelle said, as we connect that global occupier service to some of our regional Services businesses, big opportunity there. And then the other area where we're seeing very nice growth, particularly in India and certainly in Europe and in the U.S. is really around project management. Those contracts are slightly shorter, so that builds quickly. That business has very strong margins in the U.S. So that will certainly contribute to profitability, and that's an area that I think has a lot of potential as we look forward.

We have the next question from the line of Seth Bergey Citi.

I guess my first one is just around capital allocation. You repaid, refinanced some of the debt this quarter and subsequent to quarter end. How do you think about the opportunity set versus continuing to deleverage and pay down debt versus the need for continued organic growth in the business and investment in that and M&A opportunities that you see out there?

Yes. Thanks for the question. We are always balancing this as we have discussed in the past. If you notice our free cash flow conversion, how much we're bringing into the company, it's really allowing us to do all the things. As I like to say to my team, we're deleveraging, we're reducing the cost of that capital, and we're simultaneously investing organically across the platform. We're not going to give you our percentages, but I'll let you know that everything we've identified to invest in, we're able to do. M&A as a target is a focus for us, of course. But by default, we're builders here. We're building an organic machine. M&A has to be something really special, really well priced for us to execute on it.

Okay. That's helpful. And I guess just for APAC, it looks like it was slightly impacted by one of the JVs in China. Do you kind of expect that to kind of normalize into the fourth quarter?

Yes, sure. So as we look at APAC, as I stated in the prepared remarks, APAC had a $5 million headwind from the timing of Onewo, our joint venture there, just a comparison year-over-year. We do expect the full year Onewo contribution to be approximately flat versus last year. So it really was a timing issue. And then if you exclude this headwind from the quarter, APAC EBITDA would have increased year-over-year as Services and capital markets grew in the quarter.

We have the next question from the line of Ronald Kamdem from Morgan Stanley.

Great. Just 2 quick ones. Just going back to sort of the Services business line, I would love to just double-click on the next leg of margin opportunity. What do you sort of expect to drive that? Is that the technology investments? Are there more cost-cutting opportunities? Just how do we think about sort of what's going to drive the next leg of margin?

Yes. There's a lot to drive margin there. To your point, yes, the use of technology. Also, we're moving up the value chain of services. So when you think about some of our businesses, they are highly commoditized at this point, and we're shifting into the zone, say, more mechanical and engineering. Those are also higher-margin businesses for us. On top of that, honestly, we don't do a great job of the cross-sell. And services is a great place to add service lines on to what we're providing for the client, makes it stickier, and that also improves the margin. You're also going to see us retain clients at a much higher rate. We've invested in the kind of structural things you need to do to retain that client base, which both pulls margin and builds it at the same time.

Great. Helpful. And then if I could follow up on sort of the recruiting and some of the talent that you've added to the company. It sounds like there's still a pipeline sort of building there. Is there a way to just qualitatively tell us what the environment for recruiting is in terms of compensation or the market or whatever? Is it getting more competitive?

Yes. Are you speaking purely to capital markets?

Yes, generally to specifically the capital markets, but comments in other parts of the firm as well.

Okay. It hasn't gotten more expensive. Interestingly, and a real positive for us is that we're starting to receive a lot of inbound calls from the who's who, if you will, of the capital market sector as people are starting to understand that if you don't have a full baked platform with your own research tools, site selection tools like Athena that we're using for data center work that you otherwise are going to fall short right now, 2, 3 years from now in terms of your career. So we are having absolutely no problem recruiting in that industry in particular. And the pricing is something that's always been a bit elevated. We have targeted markets surgically as to where we need to go. And so we're making sure that we are spending the dollars exactly where we need to build.

We have the next question from the line of Mitch Germain from Citizens Bank.

Michelle, you mentioned cross-sell. I'm curious what you're doing internally to incentivize or drive more cross-sell across your businesses?

Yes. Great question. First of all, we're tracking it. And it's a pretty low number at the moment. And we're putting inside the company different forms of incentives. We're not going to talk about exactly what those are to facilitate cross-selling. But also the organization on a whole, I've talked about this a lot needed to be desiloed, and we've really moved about de-siloing first because, yes, you can give people the carrot. You prefer not to give them the stick. What you want to have is a culture that believes in the cross-sell. So we spent a lot of time and effort building that culture out through the organization. In fact, we've got a name for it. It's called Plus One.

Great. That's super helpful. And then I know that you guys mentioned the flight to quality. I think it's specific in office and industrial. And I'm curious how you as an organization are positioning to capture some of that benefit as some of your tenants look to upgrade the quality of their tenants or customers look to upgrade the quality of their real estate.

Yes. Look, this is a real strong point for us leasing, and particularly, you heard me mention larger deals constituting a 40% increase year-over-year in the pipeline of what we've seen. So this just plays through up to our strength. But to your point, Class A buildings are averaging about 90% attendance now. Leasing volume is really on track, very importantly in both industrial, logistics and office, as you can see, as our clients are moving to better quality space, they are paying more rent for it. And we've seen a big valuation bump in those leases. And again, just a big area of strength for us.

This concludes our question-and-answer session. I would like to turn the conference back over to Michelle MacKay for the closing remarks.

Thank you, everyone, and we look forward to speaking to you at our Investor Day in December.

Thank you. The conference call has now concluded. Thank you for attending today's presentation. You may now disconnect.