Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q (Quarterly Report) for CBRE Group, Inc. for the three months ended September 30, 2021 represents an update to the more detailed and comprehensive disclosures included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (2020 Annual Report). Accordingly, you should read the following discussion in conjunction with the information included in our 2020 Annual Report as well as the unaudited financial statements included elsewhere in this Quarterly Report.

In addition, the statements and assumptions in this Quarterly Report that are not statements of historical fact are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended, including, in particular, statements about our plans, strategies and prospects as well as estimates of industry growth for the next quarter and beyond. For important information regarding these forward-looking statements, please see the discussion below under the caption “Cautionary Note on Forward-Looking Statements.”

Overview

CBRE Group, Inc. is a Delaware corporation. References to “CBRE,” “the company,” “we,” “us” and “our” refer to CBRE Group, Inc. and include all of its consolidated subsidiaries, unless otherwise indicated or the context requires otherwise.

We are the world’s largest commercial real estate services and investment firm, based on 2020 revenue, with leading global market positions in leasing, property sales, occupier outsourcing and valuation businesses. As of December 31, 2020, the company had more than 100,000 employees (excluding affiliates) serving clients in more than 100 countries.

Our business is focused on providing services to real estate investors and occupiers. For investors, we provide capital markets (property sales, mortgage origination, sales and servicing), property leasing, investment management, property management, valuation and development services, among others. For occupiers, we provide facilities management, project management, transaction (both property sales and leasing) and consulting services, among others. We provide services under the following brand names: “CBRE” (real estate advisory and outsourcing services); “CBRE Global Investors” (investment management); “Trammell Crow Company” (U.S. development) and “Telford Homes” (U.K. development). In 2020, CBRE sponsored a special purpose acquisition company, or SPAC, CBRE Acquisition Holdings, Inc., which trades on the NYSE under the symbols “CBAH,” “CBAH.U,” and “CBAH.WS.” On July 13, 2021, CBRE Acquisition Holdings, Inc. entered into a definitive merger agreement with Altus Power, Inc. that is expected to result in Altus Power, Inc. becoming a public company listed on the NYSE under the new ticker symbol “AMPS.” The transaction is expected to close in the fourth quarter of 2021.

Our revenue mix has shifted toward more stable revenue sources, particularly occupier outsourcing, and our dependence on highly cyclical property sales and lease transaction revenue has declined markedly over the past decade. We believe we are well-positioned to capture a substantial and growing share of market opportunities at a time when investors and occupiers increasingly prefer to purchase integrated, account-based services on a national and global basis. We generate revenue from both management fees (large multi-year portfolio and per-project contracts) and commissions on transactions.

In 2020, we generated revenue from a highly diversified base of clients, including more than 90 of the Fortune 100 companies. We have been an S&P 500 company since 2006 and in 2021 we were ranked #122 on the Fortune 500. We have been recognized as Fortune's most admired real estate company for 3 consecutive years. We have also been rated a World’s Most Ethical Company by the Ethisphere Institute for eight consecutive years and included in both the Dow Jones World Sustainability Index and the Bloomberg Gender-Equality Index for two years in a row.

The Covid-19 pandemic has primarily impacted the property sales and leasing lines of business in the Advisory Services segment. Many property owners and occupiers initially put transactions on hold and withdrew existing mandates, sharply reducing sales and leasing volumes. The effects of Covid-19 have eased significantly in 2021 as global economic conditions have improved. Nevertheless, Covid-19 continues to pose public health challenges that impact our operations, particularly as new strains spread and vaccine administration is slow in parts of the world. Trends which have hindered office occupancy have further catalyzed strong industrial and multifamily transaction volumes, which has offset subdued office activity. As of the date of this Quarterly Report, the majority of workers remain out of their offices and occupier confidence in making long-term office leasing decisions has not returned to pre-pandemic levels.

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, which require us to make estimates and assumptions that affect reported amounts. The estimates and assumptions are based on historical experience and on other factors that we believe to be reasonable. Actual results may differ from those estimates. We believe that the following critical accounting policies represent the areas where more significant judgments and estimates are used in the preparation of our consolidated financial statements. A discussion of such critical accounting policies, which include revenue recognition, goodwill and other intangible assets, and income taxes can be found in our 2020 Annual Report. There have been no material changes to these policies as of September 30, 2021.

New Accounting Pronouncements

See Note 2 of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.

Seasonality

In a typical year, a significant portion of our revenue is seasonal, which an investor should keep in mind when comparing our financial condition and results of operations on a quarter-by-quarter basis. Historically, our revenue, operating income, net income and cash flows from operating activities have tended to be lowest in the first quarter and highest in the fourth quarter of each year. Revenue, earnings and cash flows have generally been concentrated in the fourth calendar quarter due to the focus on completing sales, financing and leasing transactions prior to year-end. The severe and ongoing impact of the Covid-19 pandemic may cause seasonality to deviate from historical patterns.

Inflation

Our commissions and other variable costs related to revenue are primarily affected by commercial real estate market supply and demand, which may be affected by inflation. However, to date, we believe that general inflation has not had a material impact upon our operations.

Items Affecting Comparability

When you read our financial statements and the information included in this Quarterly Report, you should consider that we have experienced, and continue to experience, several material trends and uncertainties (particularly those caused or exacerbated by Covid-19) that have affected our financial condition and results of operations that make it challenging to predict our future performance based on our historical results. We believe that the following material trends and uncertainties are crucial to an understanding of the variability in our historical earnings and cash flows and the potential for continued variability in the future.

Macroeconomic Conditions

Economic trends and government policies affect global and regional commercial real estate markets as well as our operations directly. These include overall economic activity and employment growth, particularly office-based employment; current levels of and changes in interest rates; the cost and availability of credit; and the impact of tax and regulatory policies. Periods of economic weakness or recession, significantly rising interest rates, fiscal uncertainty, declining employment levels, decreasing demand for commercial real estate, falling real estate values, disruption to global capital markets, or the public perception that any of these events may occur, will negatively affect the performance of certain portions of our business, with the greatest impact likely on some business lines within our Advisory segment.

Compensation is our largest expense and our sales and leasing professionals generally are paid on a commission and/or bonus basis that correlates with their revenue production. As a result, the negative effects of difficult market conditions on our Advisory segment operating margins, are partially mitigated by the inherent variability of our compensation cost structure. In addition, when negative economic conditions have been particularly severe, like during the Covid-19 pandemic, we have moved decisively to lower operating expenses to improve financial performance, and will restore certain expenses as economic conditions improve.

Additionally, our revenue has become more resilient, primarily due to the diversification of our business base and the growth of our outsourcing services, which are largely contractual. We believe this resilient revenue should help to offset the negative impacts that macroeconomic deterioration could have on parts of our business. Nevertheless, adverse global and regional economic trends could pose significant risks to the performance of our consolidated operations and financial condition.

Effects of Acquisitions

We have historically made significant use of strategic acquisitions to add and enhance service capabilities around the world. On July 29, 2021, we entered into a share purchase agreement to acquire a 60% ownership interest in Turner & Townsend Holdings Limited (Turner & Townsend) for approximately $1.3 billion in cash, a portion of which will be deferred until 2024 and 2025. We plan to fund the purchase with cash on hand and our revolving credit facility, if needed. Turner & Townsend, based in the U.K., is a global professional services company specializing in program management, project management, and cost consulting across the commercial real estate, infrastructure and natural resources sectors. Due to our majority interest and rights granted through our ownership, we will consolidate Turner & Townsend’s financial results in our Global Workplace Solutions segment upon completion of the transaction. The acquisition is expected to close in the fourth quarter of 2021.

During the three quarters of 2021, we completed six in-fill acquisitions and also completed a transaction with Industrious Management Company LLC (Industrious) to increase our ownership interest to 40%. As part of this transaction, we completed the integration of Hana, our legacy flexible office space business, into Industrious. Strategic in-fill acquisitions have played a key role in strengthening our service offerings. The companies we acquired have generally been regional or specialty firms that complement our existing platform, or independent affiliates, which, in some cases, we held a small equity interest.

We believe strategic acquisitions can significantly expand our capabilities and decrease the cost, time and resources necessary to attain a meaningful competitive position within targeted markets or business lines. In general, however, most acquisitions will initially have an adverse impact on our operating income and net income because of transaction-related expenditures, including severance, lease termination, transaction and deferred financing costs, as well as costs and charges associated with integrating the acquired business and integrating its financial and accounting systems into our own.

Our acquisition structures often include deferred and/or contingent purchase consideration in future periods that are subject to the passage of time or achievement of certain performance metrics and other conditions. As of September 30, 2021, we have accrued deferred purchase consideration totaling $135.0 million, which is included in “Accounts payable and accrued expenses” and in “Other long-term liabilities” in the accompanying consolidated balance sheets set forth in Item 1 of this Quarterly Report.

International Operations

We conduct a significant portion of our business and employ a substantial number of people outside of the U.S. and, as a result, we are subject to risks associated with doing business globally. Our Real Estate Investments segment has significant euro-denominated assets under management, or AUM, as well as associated revenue and earnings in Europe. In addition, our Global Workplace Solutions segment also derives significant revenue and earnings in foreign currencies, including the euro and British pound sterling. Fluctuations in foreign currency exchange rates have resulted and may continue to result in corresponding fluctuations in our AUM, revenue and earnings.

We are closely monitoring the impact of the Covid-19 pandemic on business conditions across all regions worldwide. Covid-19 has significantly impacted our operations and has the potential to further constrain our business activity, although its effects have eased in part of the world where vaccines have been administered and economic activity has recovered.

Our businesses could also suffer from political or economic disruptions (or the perception that such disruptions may occur) that affect interest rates or liquidity or create financial, market or regulatory uncertainty in the jurisdictions in which we operate. Any currency volatility associated with the Covid-19 pandemic, geopolitical or economic dislocations could impact our results of operations.

During the nine months ended September 30, 2021, approximately 43.4% of our revenue was transacted in foreign currencies. The following table sets forth our revenue derived from our most significant currencies (dollars in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
United States dollar	$	3,943,714	58.0	%	$	3,162,235	56.0	%	$	10,856,277	56.6	%	$	9,632,592	56.9	%
British pound sterling	841,241		12.4	%	736,927		13.1	%	2,451,222		12.8	%	2,188,822		12.9	%
euro	668,061		9.8	%	645,583		11.4	%	2,016,846		10.5	%	1,836,311		10.9	%
Canadian dollar	252,553		3.7	%	184,967		3.3	%	751,275		3.9	%	549,098		3.2	%
Australian dollar	152,027		2.2	%	108,060		1.9	%	423,320		2.2	%	296,124		1.8	%
Chinese yuan	109,768		1.6	%	84,985		1.5	%	320,354		1.7	%	250,816		1.5	%
Indian rupee	113,142		1.7	%	106,956		1.9	%	322,662		1.7	%	353,080		2.1	%
Swiss franc	89,696		1.3	%	80,083		1.4	%	279,683		1.5	%	234,171		1.4	%
Japanese yen	75,178		1.1	%	74,706		1.3	%	243,287		1.3	%	236,999		1.4	%
Singapore dollar	68,481		1.0	%	63,151		1.1	%	210,129		1.1	%	193,556		1.1	%
Other currencies (1)	484,466		7.2	%	397,489		7.1	%	1,320,764		6.7	%	1,144,125		6.8	%
Total revenue	$	6,798,327	100.0	%	$	5,645,142	100.0	%	$	19,195,819	100.0	%	$	16,915,694	100.0	%

(1)Approximately 37 currencies comprise 7.2% and 6.7% of our revenues for the three and nine months ended September 30, 2021, respectively, and approximately 39 currencies comprise 7.1% and 6.8% of our revenues for the three and nine months ended September 30, 2020, respectively.

Although we operate globally, we report our results in U.S. dollars. As a result, the strengthening or weakening of the U.S. dollar may positively or negatively impact our reported results. For example, we estimate that had the British pound sterling-to-U.S. dollar exchange rates been 10% higher during the nine months ended September 30, 2021, the net impact would have been an increase in pre-tax income of $11.6 million. Had the euro-to-U.S. dollar exchange rates been 10% higher during the nine months ended September 30, 2021, the net impact would have been an increase in pre-tax income of $21.4 million. These hypothetical calculations estimate the impact of translating results into U.S. dollars and do not include an estimate of the impact that a 10% change in the U.S. dollar against other currencies would have had on our foreign operations.

Due to the constantly changing currency exposures to which we are subject and the volatility of currency exchange rates, we cannot predict the effect of exchange rate fluctuations upon future operating results. In addition, fluctuations in currencies relative to the U.S. dollar may make it more difficult to perform period-to-period comparisons of our reported results of operations. Our international operations also are subject to, among other things, political instability and changing regulatory environments, which affect the currency markets and which as a result may adversely affect our future financial condition and results of operations. We routinely monitor these risks and related costs and evaluate the appropriate amount of oversight to allocate towards business activities in foreign countries where such risks and costs are particularly significant.

Results of Operations

The following table sets forth items derived from our consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 (dollars in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020 (1)				2021				2020 (1)
Revenue:
Net revenue:
Facilities management	$	1,231,101	18.1	%	$	1,122,209	19.9	%	$	3,587,247	18.7	%	$	3,323,924	19.7	%
Property management	422,652		6.2	%	400,709		7.1	%	1,252,599		6.5	%	1,195,850		7.1	%
Project management	320,694		4.7	%	338,286		6.0	%	966,821		5.0	%	963,334		5.7	%
Valuation	176,644		2.6	%	138,945		2.5	%	517,460		2.7	%	418,520		2.5	%
Loan servicing	78,497		1.2	%	58,013		1.0	%	213,233		1.1	%	171,743		1.0	%
Advisory leasing	869,124		12.8	%	549,233		9.7	%	2,082,248		10.9	%	1,696,039		10.0	%
Capital markets:
Advisory sales	673,411		9.9	%	348,238		6.2	%	1,677,557		8.7	%	1,022,914		6.0	%
Commercial mortgage origination	181,813		2.7	%	129,026		2.3	%	483,556		2.5	%	352,567		2.1	%
Investment management	135,175		2.0	%	99,935		1.8	%	406,516		2.1	%	324,745		1.9	%
Development services	88,657		1.3	%	69,677		1.1	%	271,808		1.4	%	217,948		1.3	%
Corporate, other and eliminations	(4,795)		(0.1)	%	(5,758)		(0.1)	%	(15,397)		0.0	%	(20,168)		(0.1)	%
Total net revenue	4,172,973		61.4	%	3,248,513		57.5	%	11,443,648		59.6	%	9,667,416		57.2	%
Pass through costs also recognized as revenue	2,625,354		38.6	%	2,396,629		42.5	%	7,752,171		40.4	%	7,248,278		42.8	%
Total revenue	6,798,327		100.0	%	5,645,142		100.0	%	19,195,819		100.0	%	16,915,694		100.0	%
Costs and expenses:
Cost of revenue	5,258,947		77.3	%	4,564,579		80.9	%	14,995,252		78.1	%	13,676,790		80.9	%
Operating, administrative and other	1,025,681		15.1	%	794,227		14.1	%	2,811,224		14.6	%	2,355,099		13.9	%
Depreciation and amortization	122,564		1.8	%	127,725		2.2	%	363,727		2.0	%	357,903		2.1	%
Asset impairments	—		0.0	%	—		0.0	%	—		0.0	%	75,171		0.4	%
Total costs and expenses	6,407,192		94.2	%	5,486,531		97.2	%	18,170,203		94.7	%	16,464,963		97.3	%
Gain on disposition of real estate	18,530		0.3	%	52,797		0.9	%	19,615		0.1	%	75,132		0.4	%
Operating income	409,665		6.0	%	211,408		3.7	%	1,045,231		5.4	%	525,863		3.1	%
Equity income from unconsolidated subsidiaries	163,809		2.4	%	32,376		0.6	%	459,535		2.4	%	72,487		0.4	%
Other income	7,693		0.1	%	7,947		0.1	%	22,470		0.1	%	12,974		0.1	%
Interest expense, net of interest income	11,038		0.1	%	17,829		0.3	%	34,916		0.1	%	51,795		0.3	%

Income before provision for income taxes	570,129		8.4	%	233,902		4.1	%	1,492,320		7.8	%	559,529		3.3	%
Provision for income taxes	133,507		2.0	%	49,062		0.8	%	343,279		1.8	%	119,047		0.7	%
Net income	436,622		6.4	%	184,840		3.3	%	1,149,041		6.0	%	440,482		2.6	%
Less: Net income attributable to non-controlling interests	879		0.0	%	708		0.0	%	4,459		0.0	%	2,258		0.0	%
Net income attributable to CBRE Group, Inc.	$	435,743	6.4	%	$	184,132	3.3	%	$	1,144,582	6.0	%	$	438,224	2.6	%
Adjusted EBITDA	$	736,069	10.8	%	$	441,764	7.8	%	$	1,945,584	10.1	%	$	1,139,419	6.7	%

(1)See discussion in segment operations for organization changes effective January 1, 2021. Prior period results have been recast to conform with these changes.

Net revenue and adjusted EBITDA are not recognized measurements under GAAP. When analyzing our operating performance, investors should use these measures in addition to, and not as an alternative for, their most directly comparable financial measure calculated and presented in accordance with GAAP. We generally use these non-GAAP financial measures to evaluate operating performance and for other discretionary purposes. We believe these measures provide a more complete understanding of ongoing operations, enhance comparability of current results to prior periods and may be useful for investors to analyze our financial performance because they eliminate the impact of selected charges that may obscure trends in the underlying performance of our business. Because not all companies use identical calculations, our presentation of net revenue and adjusted EBITDA may not be comparable to similarly titled measures of other companies.

Net revenue is gross revenue less costs largely associated with subcontracted vendor work performed for clients and generally has no margin. Prior to 2021, the company utilized fee revenue to analyze the overall financial performance. This metric excluded additional reimbursed costs, primarily related to employees dedicated to clients, some of which included minimal margin.

We use adjusted EBITDA as an indicator of consolidated financial performance. It represents earnings before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization, asset impairments, adjustments related to certain carried interest incentive compensation expense (reversal) to align with the timing of associated revenue, fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in the period, costs incurred related to legal entity restructuring, costs associated with workforce optimization, transformation initiatives and integration and other costs related to acquisitions. We believe that investors may find these measures useful in evaluating our operating performance compared to that of other companies in our industry because their calculations generally eliminate the effects of acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions, the effects of financings and income taxes and the accounting effects of capital spending.

Adjusted EBITDA is not intended to be a measure of free cash flow for our discretionary use because it does not consider certain cash requirements such as tax and debt service payments. This measure may also differ from the amounts calculated under similarly titled definitions in our credit facilities and debt instruments, which are further adjusted to reflect certain other cash and non-cash charges and are used by us to determine compliance with financial covenants therein and our ability to engage in certain activities, such as incurring additional debt. We also use adjusted EBITDA as a significant component when measuring our operating performance under our employee incentive compensation programs.

Adjusted EBITDA is calculated as follows (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income attributable to CBRE Group, Inc.	$	435,743	$	184,132	$	1,144,582	$	438,224
Add:
Depreciation and amortization	122,564		127,725		363,727		357,903
Asset impairments	—		—		—		75,171
Interest expense, net of interest income	11,038		17,829		34,916		51,795

Provision for income taxes	133,507		49,062		343,279		119,047


Costs associated with transformation initiatives (1)	—		55,374		—		55,374
Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue	16,959		3,767		33,963		(11,517)
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in the period	47		2,289		772		9,289
Costs incurred related to legal entity restructuring	—		1,061		—		4,995
Integration and other costs related to acquisitions	16,211		525		24,345		1,544
Costs associated with workforce optimization efforts (2)	—		—		—		37,594


Adjusted EBITDA	$	736,069	$	441,764	$	1,945,584	$	1,139,419

(1)Commencing during the quarter ended September 30, 2020, management began the implementation of certain transformation initiatives to enable the company to reduce costs, streamline operations and support future growth. The majority of expenses incurred were cash in nature and primarily related to employee separation benefits, lease termination costs and professional fees.

(2)Primarily represents costs incurred related to workforce optimization initiated and executed in the second quarter of 2020 as part of management’s cost containment efforts in response to the Covid-19 pandemic. The charges are cash expenditures primarily for severance costs incurred related to this effort. Of the total costs, $7.4 million was included within the “Cost of revenue” line item and $30.2 million was included in the “Operating, administrative and other” line item in the accompanying consolidated statements of operations for the nine months ended September 30, 2020.

Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

We reported consolidated net income of $435.7 million for the three months ended September 30, 2021 on revenue of $6.8 billion as compared to consolidated net income of $184.1 million on revenue of $5.6 billion for the three months ended September 30, 2020.

Our revenue on a consolidated basis for the three months ended September 30, 2021 increased by $1.2 billion, or 20.4%, as compared to the three months ended September 30, 2020. The revenue increase reflects growth across the three business segments; increases in revenue in our Global Workplace Solutions segment due to growth in our facilities management

and project management business, increases in our Advisory Services segment with notable growth in sales and lease commission revenue supported by a moderate growth in other advisory services such as property management, mortgage origination, loan servicing, and valuation services, and increases in asset management fees and development and construction revenue. Foreign currency translation had a 1.8% positive impact on total revenue during the three months ended September 30, 2021, primarily driven by strength in the Canadian dollar, British pound sterling and euro, partially offset by weakness in the Argentine peso, and Japanese Yen.

Our cost of revenue on a consolidated basis increased by $694.4 million, or 15.2%, during the three months ended September 30, 2021 as compared to the same period in 2020. This increase was primarily due to higher costs associated with our Global Workplace Solutions segment due to growth in our facilities management and project management business and higher commission expense associated with our Advisory Services segment due to growth in our sales and leasing business. In addition, foreign currency translation had a 1.7% negative impact on total cost of revenue during the three months ended September 30, 2021. Cost of revenue as a percentage of revenue decreased to 77.3% for the three months ended September 30, 2021 from 80.9% for the three months ended September 30, 2020, primarily driven by an increase in the Real Estate Investment segment investment management fees due to growth in Assets Under Management (AUM) with no associated cost of revenue. In addition, increase in high margin sales and leasing revenue as a percentage of overall revenue contributed to the decline in the above ratio.

Our operating, administrative and other expenses on a consolidated basis increased by $231.5 million, or 29.1%, during the three months ended September 30, 2021 as compared to the same period in 2020. The increase was primarily due to an increase in business promotion, advertising and travel, overall bonus accrual, and stock compensation expense tied to significant growth in performance this quarter as compared to the three months ended September 30, 2020 when the operating results were impacted by the pandemic. Foreign currency translation had a 1.9% negative impact on total operating, administrative and other expenses during the three months ended September 30, 2021. Operating expenses as a percentage of revenue increased slightly to 15.1% for the three months ended September 30, 2021 from 14.1% for the three months ended September 30, 2020.

Our depreciation and amortization expense on a consolidated basis decreased by $5.2 million, or 4.0%, during the three months ended September 30, 2021 as compared to the same period in 2020. This decrease was primarily attributable to prior period having accelerated depreciation for certain technology platforms, with lower technology-related capital expenditures in the current period.

Our gain on disposition of real estate on a consolidated basis was $18.5 million for the three months ended September 30, 2021, which was a decrease over the prior year period, due to a decrease in property sales within our Real Estate Investments segment.

Our equity income from unconsolidated subsidiaries on a consolidated basis increased by $131.4 million, or 406.0%, during the three months ended September 30, 2021 as compared to the same period in 2020, primarily driven by higher equity earnings associated with property sales reported in our Real Estate Investments segment and a favorable fair value adjustment related to our equity investment in Industrious. This was partially offset by a net valuation loss recorded for certain of our investments in the Corporate and other segment.

Our consolidated interest expense, net of interest income, decreased by $6.8 million, or 38.1%, for the three months ended September 30, 2021 as compared to the same period in 2020. This decrease was primarily due to interest expense associated with the 5.25% senior note which was fully paid off in December 2020, and offset by interest expense associated with the 2.500% senior note issued in the first half of 2021.

Our provision for income taxes on a consolidated basis was $133.5 million for the three months ended September 30, 2021 as compared to $49.1 million for the three months ended September 30, 2020. The increase of $84.4 million is primarily related to the corresponding increase in our consolidated pre-tax book income. Our effective tax rate increased to 23.4% for the three months ended September 30, 2021 from 21.0% for the three months ended September 30, 2020 primarily resulting from an increase in unfavorable permanent book tax differences and a decrease of tax credits in 2021.

Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

We reported consolidated net income of $1.1 billion for the nine months ended September 30, 2021 on revenue of $19.2 billion as compared to consolidated net income of $438.2 million on revenue of $16.9 billion for the nine months ended September 30, 2020.

Our revenue on a consolidated basis for the nine months ended September 30, 2021 increased by $2.3 billion, or 13.5%, as compared to the nine months ended September 30, 2020. The revenue increase reflects higher revenue in our Global Workplace Solutions segment (increase of 6.7% as compared to the same period in 2020) led by growth in our facilities management line of business, driven by its contractual nature, an increase in higher revenue in our Advisory Services segment led primarily by higher sales (increase of 28.0% as compared to the same period in 2020) with an overall increase sales and lease revenue and other advisory services, and improved revenue in our Real Estate Investments segment (increase of 25.0% as compared to the same period in 2020) largely due to an increase in sales in our development services line of business and investment management fees related to growth in AUM. Foreign currency translation had a 2.8% positive impact on total revenue during the nine months ended September 30, 2021, primarily driven by strength in the Canadian dollar, British pound sterling and euro, partially offset by weakness in the Argentine peso and Brazilian real.

Our cost of revenue on a consolidated basis increased by $1.3 billion, or 9.6%, during the nine months ended September 30, 2021 as compared to the same period in 2020. This increase was primarily due to higher costs associated with our Global Workplace Solutions segment due to growth in our facilities management and project management business and higher costs associated with our Advisory Services segment due to growth in our sales and leasing business. Foreign currency translation had a 2.6% negative impact on total cost of revenue during the nine months ended September 30, 2021. Cost of revenue as a percentage of revenue decreased to 78.1% for the nine months ended September 30, 2021 from 80.9% for the nine months ended September 30, 2020. This was primarily driven by an increase in the Real Estate Investment segment investment management fees due to growth in AUM that does not have associated cost of revenue.

Our operating, administrative and other expenses on a consolidated basis increased by $456.1 million, or 19.4%, for the nine months ended September 30, 2021 as compared to the same period in 2020. The increase was primarily due to an increase in support staff compensation, overall bonus accrual, and stock compensation expense tied to significant improvement in the business performance during the nine months ended September 30, 2021 as compared to nine months ended September 30, 2020. This was partially offset by lower discretionary expenses such as business promotion, advertising and travel which, even though slightly higher during the quarter, is still below 2020 levels. Foreign currency translation also had a 3.0% negative impact on total operating expenses during the nine months ended September 30, 2021. Operating expenses as a percentage of revenue increased to 14.6% for the nine months ended September 30, 2021 from 13.9% for the nine months ended September 30, 2020, primarily due to increased performance driven incentive expense partially offset by a decrease in discretionary expense such as travel and marketing.

Our depreciation and amortization expense on a consolidated basis increased by $5.8 million, or 1.6%, during the nine months ended September 30, 2021 as compared to the same period in 2020. This increase was primarily attributable to a rise in amortization expense related to higher mortgage servicing rights and loan payoffs.

We did not incur any asset impairments during the nine months ended September 30, 2021. Our asset impairments on a consolidated basis totaled $75.2 million for the nine months ended September 30, 2020 and consisted of a non-cash goodwill impairment charge of $25.0 million in our Real Estate Investments segment and $50.2 million of non-cash asset impairment charges in our Global Workplace Solutions segment. During 2020, we deemed there to be triggering events in the first quarter of 2020 that required testing of certain assets for impairment at that time. Based on these tests, we recorded the aforementioned non-cash impairment charges, which were driven by lower anticipated cash flows in certain businesses directly resulting from a downturn in forecasts as well as increased forecast risk due to Covid-19.

Our gain on disposition of real estate on a consolidated basis decreased by $55.5 million, or 73.9%, during the nine months ended September 30, 2021 as compared to the same period in 2020. These gains resulted from decreased activity related to property sales within our Real Estate Investments segment.

Our equity income from unconsolidated subsidiaries on a consolidated basis increased by $387.0 million, or 534.0%, during the nine months ended September 30, 2021 as compared to the same period in 2020, primarily driven by higher equity earnings associated with property sales reported in our Real Estate Investments segment, our fair value adjustment related to our investment in Industrious and higher equity pick ups associated with certain equity investments reported in our Corporate and other segment.

Our consolidated interest expense, net of interest income, decreased by $16.9 million, or 32.6%, for the nine months ended September 30, 2021 as compared to the same period in 2020. This decrease was primarily due to interest expense associated with the 5.25% senior note which was fully paid off in December 2020, and offset by interest expense associated with the 2.500% senior note issued in the first half of 2021.

Our provision for income taxes on a consolidated basis was $343.3 million for the nine months ended September 30, 2021 as compared to $119.0 million for the nine months ended September 30, 2020. The increase of $224.2 million is primarily related to the corresponding increase in consolidated pre-tax book income. Our effective tax rate increased to 23.0% for the nine months ended September 30, 2021 from 21.3% for the nine months ended September 30, 2020 primarily resulting from an increase in unfavorable permanent book tax differences and a decrease of tax credits in 2021. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in the United States in response to the Covid-19 pandemic. The CARES Act has not had, nor is it expected to have, a significant impact on our effective tax rate for 2021.

Segment Operations

We organize our operations around, and publicly report our financial results on, three global business segments: (1) Advisory Services; (2) Global Workplace Solutions; and (3) Real Estate Investments. Effective January 1, 2021, we have realigned our organizational structure and performance measure to how our chief operating decision maker views the company. This includes a “Corporate, other and eliminations” component and a segment measurement of profit and loss referred to as segment operating profit.

Advisory Services provides a comprehensive range of services globally, including property leasing, property sales, mortgage services, property management, and valuation. Global Workplace Solutions provides a broad suite of integrated, contractually-based outsourcing services to occupiers of real estate, including facilities management and project management. Effective January 1, 2021, transaction services was fully moved under the Advisory Services segment and project management was fully moved under the Global Workplace Solutions segment. Previously transaction services and project management were split between the Global Workplace Solutions segment and the Advisory Services segment. Real Estate Investments includes investment management services provided globally, development services in the U.S., U.K. and Continental Europe and legacy flexible office space solutions. Corporate and other includes activities not attributed to our core business, primarily consisting of corporate headquarters costs for executive officers and certain other central functions. These costs are not allocated to the other business segments. It also includes eliminations related to inter-segment revenue. Prior period segment results for all of our reportable segments have been recast to conform to the above changes. For additional information on our segments, see Note 14 of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.

Advisory Services

The following table summarizes our results of operations for our Advisory Services operating segment for the three and nine months ended September 30, 2021 and 2020 (dollars in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
Revenue:
Net revenue:
Property management	$	422,652	17.5	%	$	400,709	24.6	%	$	1,252,599	20.0	%	$	1,195,850	24.5	%
Valuation	176,644		7.3	%	138,945		8.5	%	517,460		8.3	%	418,520		8.6	%
Loan servicing	78,497		3.3	%	58,013		3.6	%	213,233		3.4	%	171,743		3.5	%
Advisory leasing	869,124		36.0	%	549,233		33.7	%	2,082,248		33.3	%	1,696,039		34.7	%
Capital markets:
Advisory sales	673,411		27.9	%	348,238		21.3	%	1,677,557		26.8	%	1,022,914		20.9	%
Commercial mortgage origination	181,813		7.6	%	129,026		7.9	%	483,556		7.7	%	352,567		7.2	%
Total segment net revenue	2,402,141		99.6	%	1,624,164		99.6	%	6,226,653		99.5	%	4,857,633		99.4	%
Pass through costs also recognized as revenue	10,006		0.4	%	5,846		0.4	%	30,491		0.5	%	29,296		0.6	%
Total segment revenue	2,412,147		100.0	%	1,630,010		100.0	%	6,257,144		100.0	%	4,886,929		100.0	%
Costs and expenses:
Cost of revenue	1,433,315		59.4	%	986,777		60.5	%	3,652,711		58.4	%	2,930,690		59.9	%
Operating, administrative and other	466,189		19.3	%	384,692		23.6	%	1,298,407		20.7	%	1,180,284		24.2	%
Depreciation and amortization	76,249		3.2	%	80,407		4.9	%	220,172		3.5	%	223,202		4.6	%
Operating income	436,394		18.1	%	178,134		11.0	%	1,085,854		17.4	%	552,753		11.3	%
Equity income from unconsolidated subsidiaries	19,567		0.8	%	1,241		0.1	%	22,466		0.4	%	3,569		0.1	%
Other (loss) income	(10,531)		(0.5)	%	539		0.0	%	(9,729)		(0.2)	%	3,635		0.1	%
Less: Net income attributable to non-controlling interests	140		0.0	%	116		0.0	%	627		0.0	%	537		0.1	%
Add-back: Depreciation and amortization	76,249		3.2	%	80,407		4.9	%	220,172		3.5	%	223,202		4.6	%

Adjustments:
Costs associated with transformation initiatives (1)	—		0.0	%	26,450		1.6	%	—		0.0	%	26,450		0.5	%

Costs associated with workforce optimization efforts (2)	—		0.0	%	—		0.0	%	—		0.0	%	12,659		0.3	%


Segment operating profit and segment operating profit on revenue margin	$	521,539	21.6	%	$	286,655	17.6	%	$	1,318,136	21.1	%	$	821,731	16.8	%
Segment operating profit on net revenue margin			21.7	%			17.6	%			21.2	%			16.9	%

(2)Primarily represents costs incurred related to workforce optimization initiated and executed in the second quarter of 2020 as part of management’s cost containment efforts in response to the Covid-19 pandemic. The charges are cash expenditures primarily for severance costs incurred related to this effort. Of the total costs, $6.3 million was included within the “Cost of revenue” line item and $6.4 million was included in the “Operating, administrative and other” line item in the accompanying consolidated statements of operations for the nine months ended September 30, 2020.

Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

Revenue increased by $782.1 million, or 48.0%, for the three months ended September 30, 2021 as compared to the a three months ended September 30, 2020. The revenue increase primarily reflects higher sales and leasing revenue, as well as an increase in commercial mortgage origination activity, property management fees and valuation revenue. Foreign currency translation had a 1.8% positive impact on total revenue during the three months ended September 30, 2021, primarily driven by strength in the Australian dollar, Canadian dollar, British pound sterling and euro, partially offset by weakness in the Japanese yen.

Cost of revenue increased by $446.5 million, or 45.3%, for the three months ended September 30, 2021 as compared to the same period in 2020, primarily due to increased commission expense resulting from higher sales and leasing revenue. Foreign currency translation had a 1.8% negative impact on total cost of revenue during the three months ended September 30,

Cost of revenue as a percentage of revenue decreased to 59.4% for the three months ended September 30, 2021 versus 60.5% for the same period in 2020 This increase in gross margin is primarily due to revenue growth outpacing fixed cost growth.

Operating, administrative and other expenses increased by $81.5 million, or 21.2%, for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020. This increase was primarily due to an increase in support staff compensation, overall bonus accrual, other incentive compensation, and stock compensation expense tied to better operating results this quarter as compared to three months ended September 30, 2020. Foreign currency translation had a 1.8% negative impact on total operating expenses during the three months ended September 30, 2021.

Other income (loss) decreased by $11.1 million for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020. This loss was primarily due to an unfavorable valuation adjustment recorded on a revolving facility extended to an unconsolidated subsidiary.

In connection with the origination and sale of mortgage loans for which the company retains servicing rights, we record servicing assets or liabilities based on the fair value of the retained mortgage servicing rights (MSRs) on the date the loans are sold. Upon origination of a mortgage loan held for sale, the fair value of the mortgage servicing rights to be retained is included in the forecasted proceeds from the anticipated loan sale and results in a net gain (which is reflected in revenue). Subsequent to the initial recording, MSRs are amortized (within amortization expense) and carried at the lower of amortized cost or fair value in other intangible assets in the accompanying consolidated balance sheets. They are amortized in proportion to and over the estimated period that the servicing income is expected to be received. For the three months ended September 30, 2021, MSRs contributed to operating income $48.6 million of gains recognized in conjunction with the origination and sale of mortgage loans, offset by $42.3 million of amortization of related intangible assets. For the three months ended September 30, 2020, MSRs contributed to operating income $54.5 million of gains recognized in conjunction with the origination and sale of mortgage loans, offset by $34.0 million of amortization of related intangible assets.

Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

Revenue increased by $1.4 billion, or 28.0%, for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. The revenue increase primarily reflects higher sales and leasing revenue, as well as increase in commercial mortgage origination activity, property management and valuation revenue. Foreign currency translation had a 2.9% positive impact on total revenue during the nine months ended September 30, 2021, primarily driven by strength in Australian dollar, British pound sterling and euro, partially offset by weakness in the Brazilian real.

Cost of revenue increased by $722.0 million, or 24.6%, for the nine months ended September 30, 2021 as compared to the same period in 2020, primarily due to increased commission expense resulting from higher sales and leasing revenue and increased professional compensation to support the growth in the business. Foreign currency translation also had a 2.8% negative impact on total cost of revenue during the nine months ended September 30, 2021. Cost of revenue as a percentage of revenue decreased slightly to 58.4% for the nine months ended September 30, 2021 from 59.9% for the nine months ended September 30, 2020.

Operating, administrative and other expenses increased by $118.1 million, or 10.0%, for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. This increase was primarily due to overall bonus accrual, other incentive compensation, and stock compensation expense tied to better operating results this period as compared to nine months ended September 30, 2020. This was offset by a decrease in certain operating expenses such as travel and entertainment, occupancy expense and salaries for office and administrative staff due to cost cutting and workspace rationalization measures that were implemented last year. Foreign currency translation also had a 3.0% negative impact on total operating expenses during the nine months ended September 30, 2021.

Other income (loss) decreased by $13.4 million for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. This loss was primarily due to valuation adjustment recorded on a revolving facility extended to an unconsolidated subsidiary.

For the nine months ended September 30, 2021, MSRs contributed to operating income $140.6 million of gains recognized in conjunction with the origination and sale of mortgage loans, offset by $117.8 million of amortization of related intangible assets. For the nine months ended September 30, 2020, MSRs contributed to operating income $127.8 million of gains recognized in conjunction with the origination and sale of mortgage loans, offset by $96.4 million of amortization of related intangible assets.

Global Workplace Solutions

The following table summarizes our results of operations for our Global Workplace Solutions operating segment for the three and nine months ended September 30, 2021 and 2020 (dollars in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
Revenue:
Net revenue:
Facilities management	$	1,231,101	29.5	%	$	1,122,209	29.1	%	$	3,587,247	29.2	%	$	3,323,924	28.9	%
Project management	320,694		7.7	%	338,286		8.8	%	966,821		7.9	%	963,334		8.4	%
Total segment net revenue	1,551,795		37.2	%	1,460,495		37.9	%	4,554,068		37.1	%	4,287,258		37.3	%
Pass through costs also recognized as revenue	2,615,348		62.8	%	2,390,783		62.1	%	7,721,680		62.9	%	7,218,982		62.7	%
Total segment revenue	4,167,143		100.0	%	3,851,278		100.0	%	12,275,748		100.0	%	11,506,240		100.0	%
Costs and expenses:
Cost of revenue	3,788,156		90.9	%	3,540,856		91.9	%	11,215,553		91.4	%	10,635,811		92.5	%
Operating, administrative and other	209,232		5.0	%	166,959		4.3	%	578,527		4.7	%	497,583		4.3	%
Depreciation and amortization	34,580		0.9	%	33,839		0.9	%	101,586		0.8	%	98,755		0.9	%
Asset impairments	—		0.0	%	—		0.0	%	—		0.0	%	50,171		0.4	%
Operating income	135,175		3.2	%	109,624		2.9	%	380,082		3.1	%	223,920		1.9	%
Equity income from unconsolidated subsidiaries	749		0.0	%	247		0.0	%	983		0.0	%	363		0.0	%
Other income	617		0.0	%	45		0.0	%	2,688		0.1	%	160		0.0	%
Less: Net income attributable to non-controlling interests	17		0.0	%	39		0.0	%	40		0.0	%	74		0.0	%
Add-back: Depreciation and amortization	34,580		0.9	%	33,839		0.9	%	101,586		0.8	%	98,755		0.9	%
Add-back: Asset impairments	—		0.0	%	—		0.0	%	—		0.0	%	50,171		0.4	%

Adjustments:
Costs associated with transformation initiatives (1)	—		0.0	%	17,113		0.4	%	—		0.0	%	17,113		0.1	%
Costs associated with workforce optimization efforts (2)	—		0.0	%	—		0.0	%	—		0.0	%	4,878		0.1	%
Integration and other costs related to acquisitions	16,211		0.4	%	—		0.0	%	24,345		0.2	%	—		0.0	%

Segment operating profit and segment operating profit on revenue margin	$	187,315	4.5	%	$	160,829	4.2	%	$	509,644	4.2	%	$	395,286	3.4	%
Segment operating profit on net revenue margin			12.1	%			11.0	%			11.2	%			9.2	%

(2)Primarily represents costs incurred related to workforce optimization initiated and executed in the second quarter of 2020 as part of management’s cost containment efforts in response to the Covid-19 pandemic. The charges are cash expenditures primarily for severance costs incurred related to this effort. Of the total costs, $1.1 million was included within the “Cost of revenue” line item and $3.8 million was included in the “Operating, administrative and other” line item in the accompanying consolidated statements of operations for the nine months ended September 30, 2020.

Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

Revenue increased by $315.9 million, or 8.2%, for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020. The increase was primarily attributable to growth in our facilities management line of business, which is contractual in nature. Foreign currency translation had a 1.7% positive impact on total revenue during the three months ended September 30, 2021, primarily driven by strength in the Chinese yuan, Canadian dollar, British pound sterling and euro, partially offset by weakness in the Argentinian peso.

Cost of revenue increased by $247.3 million, or 7.0%, for the three months ended September 30, 2021 as compared to the same period in 2020, driven by the higher revenue leading to higher pass through costs and higher professional compensation. Foreign currency translation had a 1.7% negative impact on total cost of revenue during the three months ended September 30, 2021. Cost of revenue as a percentage of revenue decreased slightly to 90.9% for the three months ended September 30, 2021 from 91.9% for the same period in 2020.

Operating, administrative and other expenses increased by $42.3 million, or 25.3%, for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020. This increase was attributable to higher bonus accrual tied to segment and consolidated results and continued investments to sustain the growth in the business and acquisition related costs for Turner & Townsend. Foreign currency translation had a 2.4% negative impact on total operating expenses during the three months ended September 30, 2021.

Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

Revenue increased by $769.5 million, or 6.7%, for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. The increase was primarily attributable to growth in our project management line of business, supplemented by a moderate growth in facilities management revenue. Foreign currency translation had a 2.6% positive impact on total revenue during the nine months ended September 30, 2021, primarily driven by strength in the Chinese yuan, Canadian dollar, British pound sterling and euro, offset by weakness in the Argentine peso and Brazilian real.

Cost of revenue increased by $579.7 million, or 5.5%, for the nine months ended September 30, 2021 as compared to the same period in 2020, driven by the higher revenue leading to higher pass through costs and increased professional compensation. Foreign currency translation had a 2.5% negative impact on total cost of revenue during the nine months ended September 30, 2021. Cost of revenue as a percentage of revenue decreased slightly to 91.4% for the nine months ended September 30, 2021 from 92.5% for the nine months ended September 30, 2020.

Operating, administrative and other expenses increased by $80.9 million, or 16.3%, for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. This increase was attributable to higher bonus accrual tied to segment and consolidated results and continued investments to sustain the growth in the business in form of office management and administrative salaries and acquisition related costs for Turner & Townsend. These increases were partially offset by benefits from targeted reduction in certain operating expenses, such as temporary help and travel and entertainment costs, during the nine months ended September 30, 2021. Foreign currency translation also had a 3.2% negative impact on total operating expenses during the nine months ended September 30, 2021.

Real Estate Investments

The following table summarizes our results of operations for our Real Estate Investments operating segment for the three and nine months ended September 30, 2021 and 2020 (dollars in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
Revenue:
Investment management	$	135,175	60.4	%	$	99,935	58.9	%	$	406,516	59.9	%	$	324,745	59.8	%
Development services	88,657		39.6	%	69,677		41.1	%	271,808		40.1	%	217,948		40.2	%
Total segment revenue	223,832		100.0	%	169,612		100.0	%	678,324		100.0	%	542,693		100.0	%
Costs and expenses:
Cost of revenue	40,224		18.0	%	40,384		23.8	%	138,184		20.4	%	125,454		23.1	%
Operating, administrative and other	229,303		102.4	%	147,662		87.1	%	645,558		95.2	%	425,440		78.4	%
Depreciation and amortization	4,617		2.1	%	5,902		3.4	%	20,570		3.0	%	15,039		2.8	%
Asset impairments	—		0.0	%	—		0.0	%	—		0.0	%	25,000		4.6	%
Gain on disposition of real estate	18,530		8.3	%	52,797		31.1	%	19,615		2.9	%	75,132		13.8	%
Operating (loss) income	(31,782)		(14.2	%)	28,461		16.8	%	(106,373)		(15.7	%)	26,892		4.9	%
Equity income from unconsolidated subsidiaries	156,479		69.9	%	30,914		18.2	%	411,546		60.7	%	71,112		13.1	%
Other income (loss)	447		0.2	%	117		0.1	%	3,399		0.5	%	(1,787)		(0.3)	%
Less: Net income attributable to non-controlling interests	722		0.3	%	553		0.3	%	3,792		0.5	%	1,647		0.3	%
Add-back: Depreciation and amortization	4,617		2.1	%	5,902		3.4	%	20,570		3.0	%	15,039		2.8	%
Add-back: Asset impairments	—		0.0	%	—		0.0	%	—		0.0	%	25,000		4.6	%

Adjustments:
Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue	16,959		7.6	%	3,767		2.2	%	33,963		5.0	%	(11,517)		(2.1	%)
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period	47		0.0	%	2,289		1.3	%	772		0.1	%	9,289		1.7	%
Integration and other costs related to acquisitions	—		0.0	%	525		0.3	%	—		0.0	%	1,544		0.3	%
Costs associated with workforce optimization efforts (1)	—		0.0	%	—		0.0	%	—		0.0	%	5,172		1.0	%

Segment operating profit	$	146,045	65.3	%	$	71,422	42.0	%	$	360,085	53.1	%	$	139,097	25.7	%

**(1)**Primarily represents costs incurred related to workforce optimization initiated and executed in the second quarter of 2020 as part of management’s cost containment efforts in response to the Covid-19 pandemic. The charges are cash expenditures primarily for severance costs incurred related to this effort and were included in the “Operating, administrative and other” line item in the accompanying consolidated statements of operations for the nine months ended September 30, 2020.

Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

Revenue increased by $54.2 million, or 32.0%, for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020, primarily driven by an increase in real estate sales and an increase in construction management fees in our development services line of business. Investment management fees increased due to growth in AUM. Foreign currency translation had a 4.3% positive impact on total revenue during the three months ended September 30, 2021, primarily driven by strength in the British pound sterling and euro.

Cost of revenue decreased by $0.2 million, or 0.4%, for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020, primarily driven by a decrease in cost related to construction services. Foreign currency translation had a 6.9% negative impact on total cost of revenue during the three months ended September 30, 2021.

Operating, administrative and other expenses increased by $81.6 million, or 55.3%, for the three months ended September 30, 2021 as compared to the same period in 2020, primarily due to an increase in compensation and bonuses in our development services and investment management line of business consistent with higher revenue growth. Foreign currency translation had a 2.3% negative impact on total operating expenses during the three months ended September 30, 2021.

Our equity income from unconsolidated subsidiaries on a consolidated basis increased by $125.6 million, or 406.2%, during the three months ended September 30, 2020 as compared to the same period in 2020, primarily driven by higher equity earnings associated with property sales.

A roll forward of our AUM by product type for the three months ended September 30, 2021 is as follows (dollars in billions):


	Funds		Separate Accounts		Securities		Total
Balance at June 30, 2021	$	49.6	$	70.6	$	8.9	$	129.1
Inflows	2.6		1.3		0.6		4.5
Outflows	(0.5)		(0.9)		(0.3)		(1.7)
Market appreciation	0.8		0.4		—		1.2
Balance at September 30, 2021	$	52.5	$	71.4	$	9.2	$	133.1

AUM generally refers to the properties and other assets with respect to which we provide (or participate in) oversight, investment management services and other advice, and which generally consist of real estate properties or loans, securities portfolios and investments in operating companies and joint ventures. Our AUM is intended principally to reflect the extent of our presence in the real estate market, not the basis for determining our management fees. Our assets under management consist of:

the total fair market value of the real estate properties and other assets either wholly-owned or held by joint ventures and other entities in which our sponsored funds or investment vehicles and client accounts have invested or to which they have provided financing. Committed (but unfunded) capital from investors in our sponsored funds is not included in this component of our AUM. The value of development properties is included at estimated completion cost. In the case of real estate operating companies, the total value of real properties controlled by the companies, generally through joint ventures, is included in AUM; and
the net asset value of our managed securities portfolios, including investments (which may be comprised of committed but uncalled capital) in private real estate funds under our fund of funds investments.

Our calculation of AUM may differ from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers.

Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

Revenue increased by $135.6 million, or 25.0%, for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020, primarily driven by an increase in real estate sales in our development services line of business and investment management fees related to growth in AUM. Foreign currency translation had a 6.0% positive impact on total revenue during the nine months ended September 30, 2021, primarily driven by strength in the British pound sterling and euro.

Cost of revenue increased by $12.7 million, or 10.1%, for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020, primarily driven by an increase in real estate development which is consistent with an increase in sales in our development service line of business. Foreign currency translation had a 8.7% negative impact on total cost of revenue during the nine months ended September 30, 2021.

Operating, administrative and other expenses increased by $220.1 million, or 51.7%, for the nine months ended September 30, 2021 as compared to the same period in 2020, primarily due to an increase in compensation and bonuses in our development services and investment management line of business consistent with higher revenue growth. These increases are partially offset by decreases in certain operating expenses, such as occupancy costs, as a result of workspace optimization efforts implemented last year. Foreign currency translation had a 4.0% negative impact on total operating expenses during the nine months ended September 30, 2021.

Our equity income from unconsolidated subsidiaries on a consolidated basis increased by $340.4 million, or 478.7%, during the nine months ended September 30, 2020 as compared to the same period in 2020, primarily driven by higher equity earnings associated with property sales.

A roll forward of our AUM by product type for the nine months ended September 30, 2021 is as follows (dollars in billions):


	Funds		Separate Accounts		Securities		Total
Balance at January 1, 2021	$	47.2	$	67.9	$	7.6	$	122.7
Inflows	5.7		5.9		1.6		13.2
Outflows	(2.3)		(3.7)		(1.3)		(7.3)
Market appreciation	1.9		1.3		1.3		4.5
Balance at September 30, 2021	$	52.5	$	71.4	$	9.2	$	133.1

We describe above how we calculate AUM. Also, as noted above, our calculation of AUM may differ from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers.

Liquidity and Capital Resources

We believe that we can satisfy our working capital and funding requirements with internally generated cash flow and, as necessary, borrowings under our revolving credit facility. We expect our capital requirements for 2021 to be between $150.0 million and $200.0 million of anticipated capital expenditures, net of tenant concessions. During the nine months ended September 30, 2021, we incurred $102.8 million of capital expenditures, net of tenant concessions received, which includes approximately $22.5 million related to technology enablement. As of September 30, 2021, we had aggregate commitments of $154.2 million to fund future co-investments in our Real Estate Investments business, $21.9 million of which is expected to be funded in 2021. Additionally, as of September 30, 2021, we are committed to fund $45.9 million of additional capital to unconsolidated subsidiaries within our Real Estate Investments business, which we may be required to fund at any time. As of September 30, 2021, we had $3.1 billion of borrowings available under our revolving credit facility and $2.7 billion of cash and cash equivalents available for general corporate use.

We have historically relied on our internally generated cash flow and our revolving credit facility to fund our working capital, capital expenditure and general investment requirements (including strategic in-fill acquisitions) and have not sought other external sources of financing to help fund these requirements. In the absence of extraordinary events or a large strategic acquisition, we anticipate that our cash flow from operations and our revolving credit facility would be sufficient to meet our anticipated cash requirements for the foreseeable future, and at a minimum for the next 12 months. Given compensation is our largest expense and our sales and leasing professionals generally are paid on a commission and/or bonus basis that correlates with their revenue production, the negative effect of difficult market conditions is partially mitigated by the inherent variability of our compensation cost structure. In addition, when negative economic conditions have been particularly severe, we have moved decisively to lower operating expenses to improve financial performance, and then have restored certain expenses as economic conditions improved. We may seek to take advantage of market opportunities to refinance existing debt instruments, as we have done in the past, with new debt instruments at interest rates, maturities and terms we deem attractive. We may also, from time to time in our sole discretion, purchase, redeem, or retire our existing senior notes, through tender offers, in privately negotiated or open market transactions, or otherwise.

In December 2020, we redeemed the $425.0 million aggregate outstanding principal amount of our 5.25% senior notes due 2025 in full. We funded this redemption using cash on hand. In March 2021, we took advantage of favorable market conditions and low interest rates and conducted a new issuance for $500.0 million in aggregate principal amount of 2.500% senior notes due 2031. We may again seek to take advantage of market opportunities to refinance existing debt instruments with new debt instruments at interest rates, maturities and terms we deem attractive.

As noted above, we believe that any future significant acquisitions that we may make could require us to obtain additional debt or equity financing. In the past, we have been able to obtain such financing for material transactions on terms that we believed to be reasonable. However, it is possible that we may not be able to obtain acquisition financing on favorable terms, or at all, in the future if we decide to make any further significant acquisitions.

Our long-term liquidity needs, other than those related to ordinary course obligations and commitments such as operating leases, are generally comprised of three elements. The first is the repayment of the outstanding and anticipated principal amounts of our long-term indebtedness. If our cash flow is insufficient to repay our long-term debt when it comes due, then we expect that we would need to refinance such indebtedness or otherwise amend its terms to extend the maturity dates. We cannot make any assurances that such refinancing or amendments would be available on attractive terms, if at all.

The second long-term liquidity need is the payment of obligations related to acquisitions. Our acquisition structures often include deferred and/or contingent purchase consideration in future periods that are subject to the passage of time or achievement of certain performance metrics and other conditions. As of September 30, 2021, we had accrued deferred purchase consideration totaling $135.0 million ($29.9 million of which was a current liability), which was included in “Accounts payable and accrued expenses” and in “Other liabilities” in the accompanying consolidated balance sheets set forth in Item 1 of this Quarterly Report. In addition, we plan to fund the purchase of Turner & Townsend with cash on hand and our revolving credit facility, if needed. A portion of the overall consideration will be deferred until 2024 and 2025.

As part of the company's sponsorship of CBRE Acquisition Holdings, Inc. ("CBAH", a special purpose acquisition company), we have committed to purchase shares of CBAH Class A common stock in an aggregate amount of $70.0 million, with a commitment to purchase additional shares of CBAH Class A common stock in an aggregate amount of up to $150.0 million to the extent of the amount of redemptions of shares of CBAH Class A common stock submitted for redemption by public stockholders in connection with the closing of CBAH's proposed acquisition of Altus Power Inc. We plan to fund this commitment with cash on hand and, if needed, our revolving credit facility. The transaction is expected to close in the fourth quarter of 2021.

Lastly, as described in our 2020 Annual Report, our board of directors authorized a program for the repurchase of up to $500.0 million of our Class A common stock over three years. As of December 31, 2020, $350.0 million was available for share repurchases under the authorized repurchase program. During the three months ended September 30, 2021, we spent $100.0 million to repurchase, through a stock repurchase plan entered into pursuant to Rule 10b5-1 under the Exchange Act, an additional 1,025,068 shares of our Class A common stock with an average price paid per share of $97.55. During the nine months ended September 30, 2021, we spent $188.3 million to repurchase an additional 2,156,796 shares of our Class A common stock with an average price paid per share of $87.29. As of September 30, 2021, we had $161.7 million of capacity remaining under our repurchase program. Our stock repurchases have been funded with cash on hand and we intend to continue funding future repurchases with existing cash. We may utilize our stock repurchase program to continue offsetting the impact of our stock-based compensation program and on a more opportunistic basis if we believe our stock presents a compelling investment compared to other discretionary uses. The timing of any future repurchases and the actual amounts repurchased will depend on a variety of factors, including the market price of our common stock, general market and economic conditions and other factors.

Historical Cash Flows

Operating Activities

Net cash provided by operating activities totaled $1.2 billion for the nine months ended September 30, 2021, an increase of $309.8 million as compared to the nine months ended September 30, 2020. The primary drivers that contributed to the net increase were a substantial improvement in the company's performance and elevated distributions of earnings from unconsolidated subsidiaries (mainly due to certain transactions that occurred in third quarter in the REI segment). These were partially offset by higher non-cash equity income pick up from unconsolidated subsidiaries as compared to last year, increased outflows related to changes in net working capital of approximately $223.3 million and an increase in real estate under development of approximately $55.4 million. The impact from net working capital was largely attributable to an increase in accounts receivable offset by an increase in compensation and bonus payable this period as compared to the nine months ended September 30, 2020.

Investing Activities

Net cash used in investing activities totaled $555.4 million for the nine months ended September 30, 2021, an increase of $348.9 million as compared to the nine months ended September 30, 2020. This increase was primarily driven by our investment in Industrious, uptick in mergers and acquisitions related activities, and approximately $2.6 million in higher distributions received from unconsolidated subsidiaries, partially offset by a decease of capital expenditures compared to 2020.

Financing Activities

Net cash provided by financing activities totaled $274.9 million for the nine months ended September 30, 2021 as compared to net cash used in financing activities of $141.0 million for the nine months ended September 30, 2020. The increase of $415.9 million was primarily due to the net proceeds of $492.3 million from the issuance of our 2.500% senior notes during 2021, which was partially offset by additional funds that were used to repurchase shares during the nine months ended September 30, 2021 as compared to same period in 2020. In addition, net proceeds from notes payable on real estate were higher in 2021 by approximately $41.7 million.

Indebtedness

Our level of indebtedness increases the possibility that we may be unable to pay the principal amount of our indebtedness and other obligations when due. In addition, we may incur additional debt from time to time to finance strategic acquisitions, investments, joint ventures or for other purposes, subject to the restrictions contained in the documents governing our indebtedness. If we incur additional debt, the risks associated with our leverage, including our ability to service our debt, would increase.

Long-Term Debt

We maintain credit facilities with third-party lenders, which we use for a variety of purposes. On March 4, 2019, CBRE Services, Inc. (CBRE Services) entered into an incremental assumption agreement with respect to its credit agreement, dated October 31, 2017 (such agreement, as amended by a December 20, 2018 incremental loan assumption agreement and such March 4, 2019 incremental assumption agreement, is collectively referred to in this Quarterly Report as the 2019 Credit Agreement), which (i) extended the maturity of the U.S. dollar tranche A term loans under such credit agreement, (ii) extended the termination date of the revolving credit commitments available under such credit agreement and (iii) made certain changes to the interest rates and fees applicable to such tranche A term loans and revolving credit commitments under such credit agreement. The proceeds from the new tranche A term loan facility under the 2019 Credit Agreement were used to repay the $300.0 million of tranche A term loans outstanding under the credit agreement in effect prior to the entry into the 2019 incremental assumption agreement. On July 9, 2021, CBRE Services entered into an additional incremental assumption agreement with respect to the 2019 Credit Agreement for purposes of increasing the revolving credit commitments available under the 2019 Credit Agreement by an aggregate principal amount of $350.0 million (the 2019 Credit Agreement, as amended by the July 9, 2021 incremental assumption agreement is collectively referred to in this Quarterly Report as the 2021 Credit Agreement).

The 2021 Credit Agreement is a senior unsecured credit facility that is guaranteed by us. As of September 30, 2021, the 2021 Credit Agreement provided for the following: (1) a $3.15 billion revolving credit facility, which includes the capacity to obtain letters of credit and swingline loans and terminates on March 4, 2024; (2) a $300.0 million tranche A term loan facility maturing on March 4, 2024, requiring quarterly principal payments unless our leverage ratio (as defined in the 2021 Credit Agreement) is less than or equal to 2.50x on the last day of the fiscal quarter immediately preceding any such payment date and (3) a €400.0 million term loan facility due and payable in full at maturity on December 20, 2023.

On March 18, 2021, CBRE Services issued $500.0 million in aggregate principal amount of 2.500% senior notes due April 1, 2031 at a price equal to 98.451% of their face value (the 2.500% senior notes). The 2.500% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness, but effectively subordinated to all of its current and future secured indebtedness. Interest accrues at a rate of 2.500% per year and is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2021. The 2.500% senior notes are redeemable at our option, in whole or in part, on or after January 1, 2031 at a redemption price of 100% of the principal amount on that date, plus accrued and unpaid interest, if any, to, but excluding the date of redemption. At any time prior to January 1, 2031, we may redeem all or a portion of the notes at a redemption price equal to the greater of (1) 100% of the principal amount of the notes to be redeemed and (2) the sum of the present value at the date of redemption of the remaining scheduled payments of principal and interest thereon to January 1, 2031, assuming the notes matured on January 1, 2031, discounted to the date of redemption on a semi-annual basis at an adjusted rate equal to the treasury rate plus 20 basis points, minus accrued and unpaid interest to, but excluding, the date of redemption, plus, in either case, accrued and unpaid interest, if any, to, but not including, the redemption date. The amount of the 2.500% senior notes, net of unamortized discount and unamortized debt issuance costs, included in the accompanying consolidated balance sheet was $487.9 million at September 30, 2021.

On August 13, 2015, CBRE Services issued $600.0 million in aggregate principal amount of 4.875% senior notes due March 1, 2026 (the 4.875% senior notes) at a price equal to 99.24% of their face value. The 4.875% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness, but effectively subordinated to all of its current and future secured indebtedness. The 4.875% senior notes are guaranteed on a senior basis by us. Interest accrues at a rate of 4.875% per year and is payable semi-annually in arrears on March 1 and September 1.

On September 26, 2014, CBRE Services issued $300.0 million in aggregate principal amount of 5.25% senior notes due March 15, 2025 (the 5.25% senior notes). On December 12, 2014, CBRE Services issued an additional $125.0 million in aggregate principal amount of 5.25% senior notes due March 15, 2025 at a price equal to 101.5% of their face value, plus interest deemed to have accrued from September 26, 2014. The 5.25% senior notes were unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness, but effectively subordinated to all of its current and future secured indebtedness. The 5.25% senior notes were jointly and severally guaranteed on a senior basis by us and certain of

our subsidiaries. Interest accrued at a rate of 5.25% per year and was payable semi-annually in arrears on March 15 and September 15. We redeemed these notes in full on December 28, 2020 and incurred charges of $75.6 million, including a premium of $73.6 million and the write-off of $2.0 million of unamortized premium and debt issuance costs. We funded this redemption using cash on hand.

The indentures governing our 4.875% senior notes and 2.500% senior notes contain restrictive covenants that, among other things, limit our ability to create or permit liens on assets securing indebtedness, enter into sale/leaseback transactions and enter into consolidations or mergers.

On May 21, 2021, we released all existing subsidiary guarantors from their guarantees of our 2021 Credit Agreement, 4.875% senior notes and 2.500% senior notes. Our 2021 Credit Agreement, 4.875% senior notes and 2.500% senior notes remain fully and unconditionally guaranteed by CBRE Group, Inc. Combined summarized financial information for CBRE Group, Inc. (parent) and CBRE Services (subsidiary issuer) is as follows (dollars in thousands):


	September 30, 2021		December 31, 2020 (1)
Balance Sheet Data:
Current assets	$	6,267	$	3,307,147
Noncurrent assets (2)	284,961		5,252,455
Total assets (2)	291,228		8,559,602

Current liabilities	$	9,798	$	3,241,264
Noncurrent liabilities	1,381,499		1,884,629
Total liabilities	1,391,297		5,125,893


	Nine Months Ended September 30,
	2021		2020
Statement of Operations Data:
Revenue	$	—	$	9,410,167
Operating (loss) income	(1,725)		207,270
Net income	22,142		188,518

(1)Amounts include activity related to our subsidiaries that were still listed as guarantors for the period presented.

(2)Includes $274.4 million and $360.0 million of intercompany loan receivables from non-guarantor subsidiaries as of September 30, 2021 and December 31, 2020, respectively. All intercompany balances and transactions between CBRE Group, Inc., CBRE Services and the guarantor subsidiaries have been eliminated.

For additional information on all of our long-term debt, see Note 11 of the Notes to Consolidated Financial Statements set forth in Item 8 included in our 2020 Annual Report and Note 8 of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.

Short-Term Borrowings

We maintain a $3.15 billion revolving credit facility under the 2021 Credit Agreement and warehouse lines of credit with certain third-party lenders. For additional information on all of our short-term borrowings, see Note 11 of the Notes to Consolidated Financial Statements set forth in Item 8 included in our 2020 Annual Report and Notes 3 and 8 of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.

Off –Balance Sheet Arrangements

Our off-balance sheet arrangements are described in Note 10 of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report and are incorporated by reference herein.

Cautionary Note on Forward-Looking Statements

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The words “anticipate,” “believe,” “could,” “should,” “propose,” “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” and similar terms and phrases are used in this Quarterly Report to identify forward-looking statements. Except for historical information contained herein, the matters addressed in this Quarterly Report are forward-looking statements. These statements relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies.

These forward-looking statements are made based on our management’s expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. These uncertainties and factors could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements.

The following factors are among those, but are not only those, that may cause actual results to differ materially from the forward-looking statements:

disruptions in general economic, political and regulatory conditions and significant public health events, particularly in geographies or industry sectors where our business may be concentrated;
volatility or adverse developments in the securities, capital or credit markets, interest rate increases and conditions affecting the value of real estate assets, inside and outside the U.S.;
poor performance of real estate investments or other conditions that negatively impact clients’ willingness to make real estate or long-term contractual commitments and the cost and availability of capital for investment in real estate;
foreign currency fluctuations and changes in currency restrictions, trade sanctions and import/export and transfer pricing rules;
disruptions to business, market and operational conditions related to the Covid-19 pandemic and the impact of government rules and regulations intended to mitigate the effects of this pandemic, including, without limitation, rules and regulations that impact us as a loan originator and servicer for U.S. Government-Sponsored Enterprises (GSEs);
our ability to compete globally, or in specific geographic markets or business segments that are material to us;
our ability to identify, acquire and integrate accretive businesses;
costs and potential future capital requirements relating to businesses we may acquire;
integration challenges arising out of companies we may acquire;
increases in unemployment and general slowdowns in commercial activity;
trends in pricing and risk assumption for commercial real estate services;
the effect of significant changes in capitalization rates across different property types;
a reduction by companies in their reliance on outsourcing for their commercial real estate needs, which would affect our revenues and operating performance;
client actions to restrain project spending and reduce outsourced staffing levels;
our ability to further diversify our revenue model to offset cyclical economic trends in the commercial real estate industry;
our ability to attract new user and investor clients;
our ability to retain major clients and renew related contracts;
our ability to leverage our global services platform to maximize and sustain long-term cash flow;
our ability to continue investing in our platform and client service offerings;
our ability to maintain expense discipline;
the emergence of disruptive business models and technologies;
negative publicity or harm to our brand and reputation;
the failure by third parties to comply with service level agreements or regulatory or legal requirements;
the ability of our investment management business to maintain and grow assets under management and achieve desired investment returns for our investors, and any potential related litigation, liabilities or reputational harm possible if we fail to do so;
our ability to manage fluctuations in net earnings and cash flow, which could result from poor performance in our investment programs, including our participation as a principal in real estate investments;
the ability of CBRE Capital Markets to periodically amend, or replace, on satisfactory terms, the agreements for its warehouse lines of credit;
declines in lending activity of U.S. GSEs, regulatory oversight of such activity and our mortgage servicing revenue from the commercial real estate mortgage market;
changes in U.S. and international law and regulatory environments (including relating to anti-corruption, anti-money laundering, trade sanctions, tariffs, currency controls and other trade control laws), particularly in Asia, Africa, Russia, Eastern Europe and the Middle East, due to the level of political instability in those regions;
litigation and its financial and reputational risks to us;
our exposure to liabilities in connection with real estate advisory and property management activities and our ability to procure sufficient insurance coverage on acceptable terms;
our ability to retain and incentivize key personnel;
our ability to manage organizational challenges associated with our size;
liabilities under guarantees, or for construction defects, that we incur in our development services business;
variations in historically customary seasonal patterns that cause our business not to perform as expected;
our leverage under our debt instruments as well as the limited restrictions therein on our ability to incur additional debt, and the potential increased borrowing costs to us from a credit-ratings downgrade;
our and our employees’ ability to execute on, and adapt to, information technology strategies and trends;
cybersecurity threats or other threats to our information technology networks, including the potential misappropriation of assets or sensitive information, corruption of data or operational disruption;
our ability to comply with laws and regulations related to our global operations, including real estate licensure, tax, labor and employment laws and regulations, as well as the anti-corruption laws and trade sanctions of the U.S. and other countries;
changes in applicable tax or accounting requirements;
any inability for us to implement and maintain effective internal controls over financial reporting;
the effect of implementation of new accounting rules and standards or the impairment of our goodwill and intangible assets; and
the other factors described elsewhere in this Quarterly Report on Form 10-Q, included under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies,” “Quantitative and Qualitative Disclosures About Market Risk” and Part II, Item 1A, “Risk Factors” or as described in our 2020 Annual Report, in particular in Part II, Item 1A “Risk Factors”, or as described in the other documents and reports we file with the Securities and Exchange Commission (SEC).

Forward-looking statements speak only as of the date the statements are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Additional information concerning these and other risks and uncertainties is contained in our other periodic filings with the SEC.

Investors and others should note that we routinely announce financial and other material information using our Investor Relations website (https://ir.cbre.com), SEC filings, press releases, public conference calls and webcasts. We use these channels of distribution to communicate with our investors and members of the public about our company, our services and other items of interest. Information contained on our website is not part of this Quarterly Report or our other filings with the SEC.

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