CBRE Group, Inc. (CBRE) Earnings Call Transcript & Summary

Yes. Hey, hello, everyone, again to the UBS financials conference virtual this time around. I'm Alex Kramm, senior research analyst covering U.S. exchanges, rating agencies, information services and real estate brokers, and excited for this presentation because we have a new participant that wasn't at the conference last year, which is CBRE, and the CEO, Bob Sulentic. Interesting times for the commercial real estate brokerage space, for sure, so I won't give a lot of spiel here. We have Bob to talk to us for 40 minutes right now. So with that, let's just get started. Again, Bob, thanks for doing this. Thanks for taking the time. We're just talking here a few minutes ago, it sounds like you're super busy. So with that, let's just get started. By the way, in terms of -- if there's any questions on the lines, I think there's a chat function, you can submit questions, so please do so. And I'll try to work them into the conversation.

So with that, since there's no formal presentation, which I'm sure you've done over the years, maybe we can just talk a little bit more broadly about the industry for a minute, forget COVID for a moment. When we look out medium or long term, why do you think people should be excited about the CRE space? Why should it continue to flow structurally?

Well, first of all, Alex, thanks for having me. It's great to be with you. And yes, like you, I've been part of a lot of virtual conversations lately. But here is what I tell our team, our shareholders, our Board about our sector. And we just completed with one of the top strategy firms in the world, a major strategy update and we studied our sector. There's a few long-term trends out there that really help companies like us. Number one, occupiers, tenants, occupiers, users of commercial real estate space are doing more and more outsourcing. They're turning more and more to third-party providers to handle work for them, facilities management, project management, everything to do with leasing, a lot of their real estate or occupancy strategic work, they're focusing on their core business and they're asking third parties to do more of it. Secondly, there's been a long-term and pre-pronounced trend for commercial real estate assets and by the way, now, with residential real estate assets with the move toward multifamily to move into the hands of institutional owners. When institutions own those assets, they tend to call on third parties like ourselves to do more. So from an investor side, more work is headed in the way of the services companies. Number three, both with regard to investors in commercial real estate and occupiers of commercial real estate. They want to work with fewer service providers. There is a concentration of the work in a fewer companies. So if you're positioned like CBRE, where we're the biggest provider out there, we have the best-known brand, this is all verified by third parties, where we do work with virtually every big investor client in the world and where we work with the vast majority of the large companies around the world. As they push more work in the direction of the service providers, we're really well positioned to take that on. While that's like everything that's been impacted by COVID-19, everything has been slowed down, for the most part, except a bunch of e-commerce type stuff, and that's well known. That is a long-term trend that really favors our sector and really favors our company, and we believe that will continue.

Yes. You touched upon your company already a little bit, but maybe expand a little bit on just, yes, it's an industry which has some great trends. But why is CBRE, I mean, you're a leader today, how do you keep that leadership position -- hey, again, you touched a little bit upon it already, but anything else you would add?

Well, Alex, there's unbiased. As you would expect, I spent a lot of time over here at CBRE looking at our company. But here's what I like about our positioning. Number one, we have some lines of business that should perform really well given what we're faced with now. So we have a really big, really well-developed outsourcing business. That -- and we just reported our second quarter. It grew the bottom line double digits, top line a bit, even at the time when nobody is making decisions. That's an enduring grower. That's an enduring double-digit grower, and it's big. We have a big business in the area of industrial real estate and multifamily real estate. We develop it, we finance it, we sell it, we manage it. And those product lines have a really, really good profile going forward. We're prominent in those areas. When you look at our investment management business, there's all kinds of questions that you can ask about investing in real estate, some really good opportunities, now some challenges. Our investment management business today has been a bit of a slow grower over the last few years. But the good news is it's very, very core asset oriented, very, very feel oriented. And we should see that business sustain on an enduring basis. It is a recurring revenue business today. We've got a big development business. We -- over the years, people lost track about that a little bit with us. That development business is super oriented toward developing core assets, multifamily assets. We're a huge developer of industrial assets and we do a lot of build to work. 80% or 90% of our portfolio falls into those categories. We think this year and next year, we're going to generate double the earnings in that business. With taking into account COVID-19, we think we're going to generate double the earnings in that business that we generated at the peak of the last cycle. That's a big advantage for CBRE. The other thing that I think -- oftentimes, I get the question, what have you frustrated about the market's view of CBRE? We have invested really heavily, really heavily in building a management team around the world, a geographic leadership team and a line of business leadership team and what we call a functional leadership team, so human resources, legal, finance, digital and technology. We've invested more heavily in that leadership team than anybody in the industry. It's not hard to figure that out if you follow the industry. We believe that leadership team positions us extraordinarily well to do the following. To surgically know where to take cost out of the business and to be very focused on a model for growing the business where those opportunities arrive, right? It's not just, okay, now we're in a wholesale cost-cutting mode. We're wearing both those hats right now. And we have a leadership team that's super well equipped to do that with very specific strategic initiatives on both hands on the defensive end and on the offensive end. And as it relates to the offensive end, we have a very, very unlevered balance sheet with lots of dry powder, as we like to say, lots of capital to invest. And we're going to do that, but we're going to do it when the right opportunities come at the right time.

Yes. I'll definitely ask you again in a little bit more detail, I actually got a question on that, but I'm going to keep it for a few minutes because I do need to, of course, asked a little bit about what you're seeing right now in the midst of the pandemic. I mean you just reported your earnings, so you're probably told as a lot of that already, but maybe you can repeat it for this audience in terms of what have you seen change? Can you talk about a few different regions, perhaps, as signposts? And then just -- I know this is a long question, but just remind us what you're expecting for the remainder of 2020? And anything we should be thinking about as we turn the calendar into 2021? I know that's a lot of question.

Yes. No, it's great. Look, we expect our -- we talked about this on our quarterly call. Leah Stearns, our CFO, gave a real rundown. So here's the reality of it. In the midst of COVID-19, people are finding it difficult to make decisions. They're finding it difficult to make long-term commitments. And as a result, what we've said is that we expect our transactional businesses, our brokerage businesses to kind of perform for the rest of the year similar to the way they did in the second quarter unless we got a vaccine and unless people could see their way to the other end of COVID-19, and then we'd see a pickup. But there's going to be pressure on that business because people, to a degree, are unwilling to make decisions. But to a degree, can't make decisions because you've got to be able to physically get out. If you're going to buy buildings, if you're going to lease space, you got to be able to physically get out and look at that space. And if the people to do that, need to travel to do it, forget it. It's just -- so that -- there's going to be downward pressure on the amount of activity in that part of our business until we get beyond COVID. Our outsourcing business, we expect to see nice growth in that business, mid- to high single-digit growth at the top line. It would be meaningfully higher, except again, the people that transition those accounts simply can't get out and do what they need to do to transition it. We think we can get to double-digit growth on the bottom line. So that business is going to perform very much in line with what we had hoped, with a little bit of download pressure because you just can't make certain things happen with regard to COVID-19. I commented fully already in our development and our investment management business. We think that development business will be consistent with what it was in 2019, this year and next year, and we think it will be double what it was at the peak of the last cycle. Our investment management business is very stable because it's recurring fee [ line and on ] revenue. So that's kind of what we think the picture looks like for the rest of this year. We've got a lot of focus on -- I mentioned it already. We've got a management team that knows how to surgically get after cost and leave the capacity to grow the business in place. And we got a lot of dry powder to invest when we see the right opportunities. And as this thing wears on, we think there'll be really, really good opportunities to invest.

No, that's good. Sticking to COVID, I got to -- of course, this has also been talked about a lot, but obviously, it evolves the conversation, which is the whole -- how is the new world post COVID-19, so the whole work-from-home phenomenon, and I think everybody is learning more and having new thoughts, but what are you hearing from the various constituents, how is the office of the future going to look like and what does that mean for you?

Yes. So I'll comment on office. I'll comment on industrial. I'll comment on retail. Let's start with office. We just -- again, we have relationships with the vast majority of big occupiers out there. And the ones that take the space and we have them in the financial services and technology and life sciences and manufacturing and on and on and on. We did a very deep dive with those clients. I would say, our 3 big trends that we feel highly confident about. Number one, everybody has learned that they can get things like this done reasonably well using technology, using video conferencing. And they realize that in doing this, you can stay off the road some. We're going to have less pollution. We're going to have less time in airplanes. We're going to have all that stuff. And so we believe that on the other end of this thing, when people are no longer making decisions with COVID-19 forced on them, but they have the flexibility to decide about how they want to do it based on their own judgment, we believe that there's going to be more hybrid working. There's going to be more people working from home part of the time and more people working from home all of the time. But we're equally confident and the vast majority of our clients say this, formally and even more informally, people have to get back to the office, and they will get back to the office. You need it for collaboration. You need it for culture building. You need it for bringing new talent on and getting them incorporated into your business. When you change leaders -- we've done a lot of that since we've been out for COVID-19, we put new people in charge of new things. That's an inevitable part of running a business. Those leaders need to connect with their teams. My job, I need to get around the world and see our people, and I'm not going to go to 100,000 people's houses, right? I'm going to have to see our people where we work. And so I would say the vast majority of our clients intend to go back to the office in a very significant way. And on balance, I think you're going to see this. And I use this example when we did our earnings release. Companies are really, really good at figuring out the occupancy in their office space and sizing to that occupancy. And so if historically, companies said 70% of our people are in the office. We're going to take space for 80% of them and be able to flex up and down and use some nonassigned seating and so forth. So maybe that 70% now goes to 60% or maybe it goes a little lower, okay? So there's going to be less people in the office on average. But virtually everybody says and knows that the offices are going to be less densely occupied going forward, meaningfully less dense. We've been on a 10 or 15, maybe longer year march to condense the amount of office space per person. That's going to reverse itself, for sure. And so that's the other trend that we're quite confident in. So I'll go back and I'll say it. People are going to have -- there is going to be more work from home. There is going to be a real reliance on the office to a certain degree, and there's going to be less dense office space. As it relates to retail, look, e-commerce is a long-term trend. It's going to keep growing. But one thing we know, people -- yes, you hear about the B and C malls. And yes, you hear about going down the high street residential neighborhoods where things got crazy, expensive and some of the storefronts emptied out. And all that's real and all that's going to be there. But the fact of the matter is when you think about the things that we all want in retail, right, so we all want to go to grocery store even if we order some groceries at home now. We all want places to eat. We all want to go to the movies, at least part of the time. We all want to have bars or gyms or whatever we want, laundries. All these places we go, they're -- all of that's going to be there indefinitely. And there is not any new retail for the most part being built. In fact, retail has been decommissioned. The fact of the matter is leading up to COVID-19, we did -- we were seeing rents growing. We were seeing occupancies growing. I think retail is going to be under a lot of pressure while we're in COVID-19, but some of these statistics that you hear, let's be realistic. When people say, "Oh my gosh, nobody is going into stores anymore." And the fact of the matter is, legally, the stores are closed down, and you can't go into them, big shock that nobody is going into them, right? Big shock that nobody is going into a restaurant that's closed, right? And then they start to open the restaurants and say, "Well, restaurant usage is going up again." So I think there has to be a little common sense interjected into that argument. For sure, there's going to be downward pressure on those things long term. But for sure, there's going to be retailers, not any new being built. And then on the industrial side, you know what, e-commerce is going to continue to grow. And by the way, it's not just e-commerce, delivering stuff to your house, it's whatever huge percentage of that stuff that gets sent back in all the distribution space that you need to receive that and sort it and get it back to where it came from. So you're going to see a lot of demand around industrial. By the way, CBRE has a huge industrial business, leasing, financing, sales, developing. That's one of the things that we're going to enjoy some real benefit from. But yes, you'll see that trend continue on the industrial side. And then I think we all know that hotels are going to be under pressure until we get to the other side of COVID-19, if people get comfortable traveling again. One thing I will comment on in that regard, when we came through 9/11, if you remember, travel dropped precipitously. And within a few years, not only it come back, it come back in multiples of what it had been before because people do want to travel, they do want to go places. And when it came back, it came back and it was harder to do it, but it still came back. So I think you'll see travel come back at some point. And you'll see hotels come back. But we think that will lag, meaning industrial and multifamily will be first within a year or so. We think office may be in the second year. Maybe hotels to take a little longer.

That's helpful. And since you mentioned retail, the good thing is it's a small exposure for you anyways, right? So...

Retail is not a big part of our business, but we do have a meaningful retail brokerage business here in the U.S. and in other parts of the world.

Just one more quickly on COVID. You mentioned some of the benefits already maybe or some of the positives or not so negative, so however you want to call it, but can you talk about any sort of benefits that you've already seen? I know you've talked about helping clients think about the new space. But like anything tangible, even like something where you could put numbers around already where some of the help you're giving customers to do things differently in the future is actually going to be something that you're excited about?

Well, we've worked super hard to stay connected to our clients, to give our clients the kind of information they want. We've given them massive amount of research. We've had what we call these flash calls where we've had thousands of clients on and when we've given them insights into what's going on with leases and what's going on with various product types in terms of rents and so on and so forth. Here's what I would tell you has happened that I think has been a real benefit to us, and we've gotten a lot of feedback on this. I think big global clients, and that's a huge part of our work, realize that we have the resources and the breadth and the depth and the financial strength to continue to serve them in a very big way even when revenues are down as they are now. I think a lot of brokers, and brokerage is a big part of what we do, are attracted to a platform like ours with resources like we have when the environment gets tough, and we continue to see strong brokerage recruiting and actually accelerated brokerage recruiting in the second part of the second quarter, that's been very good. As I already mentioned, our outsourcing business, when companies start thinking about cost, as they inevitably do now, it's not just commercial real estate companies that are thinking about cost today, aren't everybody is thinking about their cost today even the big e-commerce companies. Even the big e-commerce companies are thinking about their costs. When they start thinking about their costs as they are, and now I would say almost obsessively, in some cases, outsourcing becomes very appealing because outsourcing in part is about expertise and the ability to control costs in the way that people that don't do it as a core part of their offering, can do it. And that's us. We can do that. And we have competitors that do it as well. But we have the most developed business in that regard. That's been really, really positive for us. It's been a really very positive thing for us, Alex, that our investment management business and our development business are very core asset oriented. Core assets are getting a lot of positive attention right now. And that's why I'm able to comment to you that I think our development business is going to do twice what it did in this year and next year. Inevitably down years, it's going to do twice what it did at the peak of the last cycle because we are developing core assets. That's why I'm telling -- Leah and I are both willing and able to tell our investor clients and the analyst community that we are confident that the recurring revenue will be there in our investment management business because it is a core asset business today. We've seen a lot of benefit in that regard. So there is a bunch of stuff going on out there that we think is moving positively for our company during this whole COVID-19 experience.

You just mentioned the recruiting portion. I was going to touch on that later, but maybe we'll just jump ahead to that. Any -- I think you actually just said that the 2Q was fairly strong in the regard. Like how is that environment right now? I mean is it too soon to -- I don't want to say pick people off from different firms? But like will we still see this later this year? Like where are we in the process in that? Is that the preferred method to kind of broaden your reach versus maybe buying like a specialty firm in a certain region? Like how -- what's easier? And what have you done already maybe in the last few months?

Well, I mentioned a little bit ago, the degree to which we've invested in our management team and the advantages that creates for our company. And for years, and others that follow us know, we've talked a lot about the gains that we've made year in and year out through recruiting brokers. I can tell you that recruiting brokers works when you have a great management team. If you have a management team that's built around player coaches, not near -- what we say in our company is brokers don't recruit brokers, right? Experienced professional brokerage leaders recruit brokers, and they particularly recruit brokers if they have a brand and a platform and a base of clients that allows them to make the case to those brokers and demonstrate it empirically that when they come over here, they're going to generate better volumes of business for themselves than they can elsewhere. And that's the experience that we inevitably have when we go through down cycles, and that management team is out there actively in every market that we have is actively looking for these opportunities, and they're really being helped by our brand and they're really being helped by our client base and they're really being helped by the breadth of services we have, so that if you're a broker that comes in here, and we manage 6.5 billion square feet of space around the world, there's some built-in clients for you, et cetera, et cetera. So that's what's going on there.

But no metrics to share at this point, like any...

No, we haven't published metrics other than to say that we had very solid net gains in revenues and headcount in brokerage recruiting so far this year.

Great. Shifting gear a little bit, and this would probably be more for Leah. But since you're here, you have those industry-leading margins. How do you think about it from here? I guess, yes, first of all, how does that fare in this environment, right? And what are the offsets? But then as we get out of this pandemic, how much is margin expansion a focus versus now we need to invest again for the growth that's going to happen. Like how do you balance the two? And how important is margin?

Well, the fact of the matter is we do have good margins for our sector, Alex, but I mentioned to you earlier in the conversation that we had just done a big piece of strategy work. And we looked at everything. We looked at the markets we compete in, we look at the -- how attractive the industry is. We looked at the structured organizational structure of our business. We looked at the success of the M&A we've done, blah, blah, we looked at all of it, right? And we -- as you mentioned, we have a company with 100,000 people. We built it organically, and we built it through M&A growth. And we've gotten really -- we've had to support it with big infrastructure. And one of the conclusions we've come to is that we're at a scale where we can now introduce technology-supported processes that would allow us to attract to -- excuse me, extract greater margin from our business. We think there's significant opportunity there. And we think that there's some things we can do in that regard because of our scale and frankly, some investments we can make because of the strength of our balance sheet that will allow us to do things that most everybody else in the sector won't be able to do. So we think there will be good opportunities for additional margin expansion and we think that's going to be a long-term opportunity for us. Now when we get past COVID-19, the bigger opportunity is going to be to grow our business to add accounts on the outsourcing side, to continue to move down the path of account-based brokerage, to grow our project management business. So we've got a big, big project management business. There's going tremendous opportunity coming out of COVID-19 on the project side. I think anybody watching the industry knows that. And you know what, there's going to be some opportunity for M&A. All of those things will dominate the margin argument when we get to the other side of COVID-19, but there's going to be a continued long-term opportunity to do some things on the margin side as well.

Good. Very quickly, just to follow up on this. Do you feel like that's a new thing coming out of that strategic review that you just did? Or has it been a focus for the last couple of years already? Or do -- is it a bigger focus today than it maybe was 1 or 2 years ago? The margin...

The cost?

Yes.

The margin thing. Well, the margin thing has forever been a focus for us, and we've talked about it. If you went back and listened to our calls over the years, we had our releases, you would see quite a bit of talk around that. But I will say, when you do a strategy update, and we do it about every 4 years, when you reevaluate your company, you go through a period where there is more acute focus on the things you just learned than there was before. And we learned a bunch of things about areas that we think we can really make games on in terms of growing the business. And we learned some really exciting things about opportunities for us to make gains in expanding our margins and becoming more efficient, less bureaucratic, taking advantage of technology in some internal areas rather than just market-facing areas. So yes, coming out of that work, inevitably, you're going to get a lot of focus around the things you learned, and we have that. And of course, COVID-19 has caused a lot of attention in that regard.

Yes. And sorry, just one more quick follow-up on that one. Since you just talked about the strategic update. And you talked about a little bit more at the beginning of the call, too. Were there other things that you -- that we haven't talked about on that where you feel like you just said you become more focused on certain things. What are the other main things that you feel like you are going to be more focused on?

Alex...

You know the question...

The answer to that question will cost you millions of dollars. Now there's some of that you just can't talk about, obviously. And but it's very exciting. We think we're positioned to do some really, really good things on the offense, as we say, in-house. And we think there's some things we're positioned to do some really, really good things on the defense. And I guess, as you would expect, you just don't talk about some of that stuff publicly.

Yes. No. No, that's fine. It's my job to try. Shifting gears then. And this is actually also we're getting some questions here. So let's go into M&A for a minute. So you've always said that -- well, first of all, you have a pristine balance sheet, right? And you're in a very good position. And you've always said, this may be the time you want to be on offense also with your checkbook. So can you kind of talk about where there are gaps or where you're looking? What kind of deals are interesting to you? And actually, there's a question from the audience here, so I'll ask it right away, like, it's do you expect consolidation opportunities towards the end of this year and into 2021, and where in particular? So loaded question there, but any sort of timing, sizing would obviously be very helpful for us.

I'm going to say this only a little bit tongue in cheek. I'll send you our list of M&A targets and our detailed outline of our strategy after the call.

Yes. Nobody would [ think ] that one.

Yes. No. I'm just kidding. But in all seriousness, here's how we think of M&A. And we've refined and tightened our view on this, I would say. M&A is definitively not a bulk-up strategy for CBRE. M&A is something we do to add capabilities that we didn't have previously to deliver certain types of outcomes for our clients. We're -- and in particular, where we think there's a market opportunity. And so sometimes you can't do M&A because things aren't for sale or because they're for sale, but they're too expensive. And then you get to times when you can't get it done. So what we've done is we've now got 3 segments. We made that change 1.5 years ago or so, and we got CEOs of each of those segments. And we've charged the CEOs of each of those segments to kind of have a deep knowledge of the part of the business they're responsible for, where the holes are in their business, and where they want to fill those holes by acquiring other businesses, right? It's a little different mindset than we had before. We hadn't found something that we thought was something good to buy and it was available, why not -- we bought it. It's a little different now. What we're seeing is Jack Durburg running GWS, and Danny Queenan running advisory and Michael Lafitte running real estate investment management. How do you want to build your business and the capabilities in your business using M&A? And then we're going to team you up with our corporate development team, and we're going to go looking for businesses that fit that. And we're going to pay reasonable prices to get those businesses, and we're going to make sure, of course, they have the right culture, and we have an integration plan. And we're going to hold ourselves super accountable for the synergies we say we're going to get. But I would tell you, Alex, that we believe there's opportunities in many parts of those 3 businesses to add to them through M&A, but it doesn't mean that those -- that we'll find targets that work in those opportunities. We're going to have a little patience around there, right? But I think you should expect CBRE to continue to be an acquirer. I'm hoping and thinking maybe more thoughtful than we have been in the past because of the way we've put it in the crosshairs for those 3 CEOs of those 3 segments. And we think that the environment that we're going to be in for the next couple of years and the strength of our balance sheet will put us in a good place to accommodate their interest as they unfold.

That's great. Just a quick follow-up, not on M&A, but also capital. And again, this is maybe more for Leah again, but maybe also for you. Obviously, you stopped your buybacks, I believe, right? And you are playing for liquidity in this environment. So at what point, if you don't find the M&A that's out there or if the deals are just smaller than what the capacity is, like at what point do you execute on buybacks again?

Yes. Leah would -- inevitably, given her role in the company, would give a more thoughtful response to that. But what I'd say is, it's on the table all the time, right? We got a Board meeting this week. We're going to be talking about that. When do we do it? How much do we do? What other opportunities do we have to employ capital but it's not our favorite place to spend money for our shareholders or for our business. Our favorite place to share money is where we can get good financial returns, and we can strategically advance our business. And coming into a period where we think there will be those opportunities, we're not going to be too quick to use up our dry powder on share repurchases. And then 6 weeks later find out that there's a great M&A opportunity or that because of this core focus we have with our investment, there's a really good time in the cycle, we can invest more in our development business. And by the way, our development business generated in the full last cycle for our capital partners' 30% returns, right? So we do co-investment in that. Well, this is -- we're going to be coming into a time where there's some opportunities there. So we're going to do things, first and foremost, to give us great financial returns and also give us good strategic returns and you know what, it may be that we conclude at some point that the best returns will come through buying some shares. And then we'll do that. But that's not what we're thinking first.

Yes. Great. We're starting to get to the end of the meeting here. I got another question that I want to get in here. Not sure -- I'll just read it out, but it's like, what will be the defining characteristics that separate the best retail space from the lesser retail space? I think it's coming out of the, I guess, crisis and the pressure of retail that you talked about, but you also said yourself that there's going to be some areas that are going to be doing better than others. Any quick answers on that one in the interest of time?

Yes. I think 2 things really quickly come to mind. The best retail space is going to be located where people live, and really convenient to where people live. And a lot of it's going to be, I think, increasingly, there's going to be this focus on -- can we walk there? Can we ride our bike there? Is it close to those kind of things. And so that will be one of the characteristics. The other characteristic that attractive retail space is going to have is that it's going to -- a lot of it's going to have an experience dimension to it. The best retail space and the best retailers have rotated pretty hard toward creating experiences for people. By the way, that's why -- that's one of the reasons I think retail -- this notion that retail is going to go away in an overwhelming way. It's at odds with the notion that human beings want experiences. So those are the 2 things that I would point to most quickly.

Okay. And then I have one last one that I wanted to ask. You talked about outsourcing accelerating. Just as you think about that book of business that you have today and we think about office, maybe not shrinking, but being reevaluated. Have you looked at your book of business, how -- if companies decide, and I heard that from some of the companies that cover that they're closing satellite offices, right? And it -- is that something that worries you? Or have you done an analysis of if companies compress the overall space, what does that mean for our facilities management businesses, et cetera? Any questions?

No. It doesn't worry me. It's something that we'll deal with as our business evolves, right? So I'm going to give you one, Alex, right? So in the last 10 years, right, office occupiers have been taking less and less space per person. And over and over and over, we heard the argument, "Oh, my gosh, what is that going to mean for your business?" Well toward the end of the last cycle, as that was going on, as your company and my company and every other company out there was taking less and less space per square foot, what were they doing? To get to that place, they were going to new spaces, and they were focused on spaces that were configured differently. And they were focused on spaces that were much more flexible and loaded with amenities and loaded with technology, and we saw an explosion that nobody could hardly understand in our leasing business in 2018 and 2019, all the while, individual companies were taking less square footage per person. Well, they were taking new spaces and they were configuring it differently. And it was great for our project management business. So look, if all of a sudden, everybody wakes up and they truly do work from their basement and never go back to the office, of course, that's a big problem. I don't think that's going to remotely happen. I think what's going to happen is companies are going to reconfigure. They're going to work more from home. They're going to take less space for less people, but more square foot per person. They're going to have different configurations. And there will be opportunity that emerges as a result of that. And I think because of the relationships our company has and the capability set we have with project management and advisory, et cetera, I think you'll see us do quite well.

Good. I think this is a good place to end. We actually went over by a couple of minutes. So thank you for joining me, and all the best for the rest of the summer, and I'm sure we'll connect again soon. So thank you very much.

Thanks, Alex.