Q1 2020 Earnings Call

Today's call to stay recorded.

Legal counsel requires us to advise that discussion scheduled to take place today may contain forward looking statements that involve known and unknown risks and uncertainty.

Actual results may materially different from any future results performance or achievements contemplated in forward looking statement.

Additional information concerning factors that could cause actual results to materially different than though the forward looking statements is contained in the company's annual information form if out with the Canadian Securities administrators and the company's annual report on form 40 F. As filed with the U.S. Securities and Exchange Commission.

[music].

A reminder, today's call is being recorded.

They used to be able to 28 2020.

And at this time for opening remarks, it introduction I would like to turn the call over to the global Chairman and Chief Executive Officer Mr. Jay Hennick. Please go ahead Sir.

Thank you operator, good morning, and thanks for joining us on Jay Hennick, Chairman and Chief Executive Officer Company with me today, as John Fredrickson, Chief Operating Officer, Chris.

Christian Mayer Chief Financial Officer.

This conference call is being webcast and is available in the Investor Relations section of our website <unk>.

Presentation slide deck is also available there to accompany todays call.

Colliers began to 21 solid first quarter results. Despite the initial impact of the cold 19 in Asia early in the corner when the rest of our operations being affected in March.

Given the uncertainty we expect the balance of the year to be challenging, particularly for our brokerage operations.

A few minutes Christian will talk about our financial results provide you with our working assumptions for the balance of the year and discuss our liquidity and conservative balance sheet.

John will then offer some operational spot after which we will open the call for questions.

For the corner revenues were $631 million up 1% in local currency.

Adjusted EBITDA was 55 million up 28% and adjusted earnings per share came in at 54 cents up 6% versus the prior year.

True up the corner our leadership teams at all levels motivated most mobilized swiftly and responsibly to protect our people want to align our costs, while ensuring business continuity for our clients.

I'm extremely proud of them and inspired by the work they are doing as we navigate through this unfortunate prices.

Let me take this opportunity to recognize and thank them all the work they have done and continue to do for our stakeholders. Thank you all.

It goes without saying that business is everywhere have been hit by the crisis for colliers and about 45% of our revenues and now more than 50% of our EBITDA comes from outsourcing and advisory and investment management services that are typically more essential.

Recurring and contractual giving us a much more stable business than ever.

We have worked diligently over the years to change the nature and composition of our company by increasing revenues that come from more resilient real estate services. So that colliers would have a much more balanced business model and I'm sure glad we did.

The rest of our revenues and EBITDA come from our highly variable brokerage operations, which we expect will declined sharply as I mentioned.

Across the board were making tough but necessary decisions to adapt.

We have already taken steps to adjust our costs, including eliminating nonessential spending cutting capex and reducing non revenue producing support administrative and legal staff.

Furthermore, I have often to not take compensation and other members of our leadership and made some similar decisions notwithstanding the additional volume of work required during these difficult times.

And our directors without being assessed also wave directors fees to show their support.

These are just some of the examples of our unique colliers culture and action.

Fortunately Colliers also benefits from having globally diverse revenue streams with about 55% of our revenues coming from the Americas and the balance split almost equally between Europe and Asia Pacific.

As markets return to normal those number a cover first will generate increasing revenues sooner as we are seeing to some extent in China right now and well also be able to share best methods to return to work among many other things.

Without question, we will continue to be tested in the coming months in ways. We can't anticipate however, I'm confident that were up for the challenging and we'll whether this storm better than most.

Everyone knows that colliers professionals are more enterprising and collaborative in this business.

We continue to see countless examples of our enterprising spirit in action every single day, and we deliver importantly insights to our clients and keep our company moving forward as always.

Perhaps most importantly, our entrepreneurial culture and way of doing business has reinforced by the fact that our leadership owns about 40% of the equity in our company substantially more than any of our competitors.

Not only us our leadership perfectly aligned with shareholders. We also have serious skin in the game, which is the ultimate motivation when it comes to making the right decisions expeditiously.

I believe in our diversified business model.

I believe in our experienced leadership decentralized operating structure and enterprising culture and I'm confident that when this crisis passes our economy, and colliers will come out better and more unified than ever.

Now, let me turn things over to Christian Christian Thank you Jane.

As announced earlier today Colliers reported solid financial results for the seasonally slow first quarter.

Initial impact to that level of at 19 pandemic. My comments, followed the fall slides posted on the Investor Relations section of players Dot com to accompany this call.

Please note that my comments reference non-GAAP measures such as adjusted EBITDA and adjusted EPS, both of which are defined in our press release issued today as was the accompanying slide presentation.

It does but there are composed primarily of noncash charges that we view as largely unrelated to our operating results.

All references to revenue growth are calculated based upon local currency.

First quarter revenues were 631 million up 1% over the prior year internal revenue declined 1%, primarily due to the initial impact of the pandemic on brokerage operations in the Asia Pacific region throughout the quarter and in other regions toward the end of the partner.

First quarter consolidated adjusted EBITDA was 54 million compared to 44 million with our margin at 8.6% versus 6.9% in the prior year quarter.

The margin improvement led by investment management, and the Americas region as I will discuss in a moment.

Q1 revenues in the Americas totaled 370 million up 4% American outsourcing and advisory revenues were up 12% with strong growth in each of project management property management and valuations.

Sales on lease brokerage revenues were down 3% impacted by a noticeable slowdown in the month of March terminal to the pandemic.

Adjusted EBITDA was 31 million up 19% versus last year with an 8.4% margin up 110 basis points, primarily due to lower cost and operating leverage in outsourcing and advisory.

EMEA region Q1 revenues were 117 million flat relative to the prior comparative period, and we're also roughly flat and each service line.

Brokerage revenues were adversely impacted by the pandemic late in the quarter.

Adjusted EBITDA for the region was a loss of 4 million compared to a loss of 3 million last year.

Asia Pacific region revenues were 97 million down 9% impacted by sharply reduced brokerage activity in China and other countries in Asia.

Well to the pandemic beginning early in the quarter, partially offset by incremental revenues from the recent acquisition of synergy project management in India, which contributed significantly to the increase in outsourcing and advisory revenues, which were up 16%.

Adjusted EBITDA was 5 million compared to 11 million last year on lower revenues and service mix.

Investment management revenues for Q1 were 46 million up 7%.

Revenue growth was positively impacted by management fee growth across open and closed end products as well and the timing of certain European transaction fees.

Offset by a reduction in Passthrough carried interest.

Assets under management were 35.1 billion as at March 31, 2020 up 31% from a year ago.

Adjusted EBITDA for the quarter was 18 million versus 10 million in the comparative period was a decrease attributable to base management fee growth as well as the timing of transaction fees.

Our consolidated income tax expense for the first quarter included a charge to reverse a 2 million benefit part in 2019 due to a change in tax law applied retroactively.

Absent this charge or adjusted EPS would have been 59 cents.

Up 16% versus the prior year period.

Colliers maintains a conservative financial profile with a net debt to adjusted EBITDA leverage ratio of 1.8 times as at March 31 2020.

Our leverage includes 91 million of debt drawn under our revolving credit facility attributable to an investment in real estate assets to cede a new investment management fund in Europe.

We expect to transfer these assets off our balance sheet without gain or loss during the second part of 2020 favorably impacting our leverage ratio.

As of March 31, 2020, we had 478 million available under our 1 billion dollar revolving credit facility maturing in April 2024, and together with cash on hand, we have 580 million of liquidity to fund operations working capital capital expenditures.

And acquisitions.

We recently renewed our 125 million dollar structured accounts receivable facility for another one near term extending to April 2021.

We also have outstanding 210 million euros of 2.23% senior notes maturing in May 2028.

The co and pandemic is having an unprecedented impact on global health economic output.

In light of this uncertainty we have developed working assumption for our company that is based on the best available information at this time, but a subject to changes based on numerous ongoing macroeconomic health social political and related factors.

Our working assumption for the full year 2020, as a 15% to 25% decline consolidated revenues and a 25% to 35% decline and consolidated adjusted EBITDA relative to 2019, excluding the impact of acquisitions.

Not yet completed.

Brokerage revenues, which have a highly variable cost structure are expected to declined sharply in the second quarter, and then gradually improved sequentially in the third and fourth quarters.

Sourcing and advisory and investment management revenues are expected to remain relatively stable through the remainder of the year with some local variability depending on market conditions.

The working assumption includes steps to adjust our cost structure, which John will discuss in a moment.

Based on our working assumption.

Back to remain onside, all financial covenants in our debt agreements with a weighted average debt maturity of 4.7 years and significant available liquidity. We believe we are well positioned to weather the economic and financial effect of the pandemic.

That concludes my prepared remarks, I would now ill turn the call over to John.

Thank you Christian.

As a cobot 19 pandemic began to impact our operations around the world first in Asia Pacific that Europe, and finding the Americas. Our executive team has moved from a growth mindset to a focus on sustainability.

Taking decisive action to protect our employees observed government mandated closures implement business continuity of measures to support our operations and service our clients.

Reduce our cost to offset the impact of declining revenues due to the pandemic.

Through the Colliers enterprising approach this was done swiftly and fluctuate as conditions warrant.

We will continue to monitor the situation closely.

Further action as necessary.

In Q1, we made the difficult decision to reduce the number of employees our most significant expense.

Some of this began midway through the quarter in Asia most of the reductions place just after quarter end.

To date, approximately 10% of our workforce force has been furloughed.

Fury X two or three months.

Health benefits maintained well another 5% separating from service.

These cost adjustments reflect predominantly non revenue producing staff and support administrative and certain leadership roles.

Not included in these workforce reduction percentages is a much broader based reduction salaries and bonuses across our global workforce, the global executive team to our regional and local leaders.

In addition to reducing our people costs. We've also reduced all nonessential spending for the balance of the year.

In the aggregate we expect these measures to result in annual savings of approximately $150 million in 2020.

If required.

Matrix further cost reduction measures in the future.

Consistent with most other professional services firms Colliers continues to service its clients across its global platform.

So mainly and were possible this is being done remotely.

While our offices have reopened in many parts of Asia.

And to open imminently.

Offices, and all other regions are either closed or remain open but operating with minimal stuff.

I haven't got suites in IP systems, and applications observed gos and our clients wells.

So we're leveraging this investment more than ever before and expect that much of this elevated due so all of you will continue in the future.

Whether its communicating internally, we're connecting with clients are using technology has never been more important.

All yours and deliberate valuable insights through surveys thought leadership and interactive webinars at local regional global levels.

Well UPT and delivered through the untiring efforts about professionals.

Subject matter ask experts.

Webinars that address a world view of dynamics impacting both occupiers I'm landlords earlier in the months more recent presentations focused on surveying remote working and transitioning back to the workplace drafted thousands of registered participants.

Representing a 10 fold increase in the typical size of audiences for these types of presentations pre crisis.

For those interested this cobot 19 related content is located on our website at Colliers Dot com.

Mailable by major market using the dropdown menu located.

All right hand corner, Umbro homepage or the hyperlinks on the operational priorities page.

Slide deck accompanying this call.

Well, there's no there are countless silver linings to this crisis. The Congress will benefit from in the years to calm. This does not in any way to mitigate the significant human economic cost of the pandemic and the uncertainty it has created.

However, with a near term focus on business continuity combined with a longer term focus on strategically investing for the future. We believe that we will emerge from this period stronger than ever before.

That concludes our prepared remarks, and I would now like turn the call back tour operator to facilitate questions.

Thank you, ladies and gentlemen to ask the question at this time you would need to press Star then one on your telephone.

To withdraw your question press the pound key.

Our first question comes from a lot of George do met with Scotiabank. Your line is open.

Hi, good morning, guys.

Maybe looking at the more stable outsourcing and advisory part of the business.

I'm just wondering if you've seen any pockets there that's been more vulnerable to cobot 19.

I mean, I just to clarify I guess do you guys expect that part of the business to be flat or would you expect that you know that part of business to be down.

You know it varies by service investment management has been very resilient in fact as you can see from the results up for the quarter.

Operating management is absolutely booming.

Although they are having trouble staffing some of the buildings because some of their support staff a particular in particular on site building personnel, which we administer we're having trouble getting people obviously to attend.

So that's been a taxing on them and modestly impacts revenue streams, but one of the one of the silver linings as John talks about is our phones have been ringing off the hook from others that maybe potentially we're doing their own property management and now want to outsource.

That to a credible service providers like Colliers and we're responding.

To those two those Ah request for proposals ads. So we're seeing business pick up but I think I think for the quarter and even even through the first month of this quarter, we're seeing substantial increases in our and our property management business. So far.

Other areas project management as an example have also been very resilient, we're seeing some pick ups in business, depending upon different geographic region. As there is some variability because in some countries governments of close.

Now a construction sites, including infrastructure, which as of the Lions share of what were what we do and project management. So we're seeing we're seeing a little bit of up a little bit of that happening, but generally.

Pretty much as as resilient as we were hoping it would be going into a crisis like this I hope that answers your question.

That's helpful. Thanks, Jay maybe a tougher question how would you see the eventual recovery.

Brokerage activity by region, I mean, obviously Asia it seems like its recovering but the other parts of the world like how do you kind of see that on terms or the recovery.

Yes, well, we're not seeing it in Asia, just yet and that's something we're watching daily we're seeing activity happen.

And we're seeing activity virtually in every other market our our real estate professionals are being asked by clients to help them with lease extensions lease deferrals, all kinds of a have a potential adjustments to existing lease relationships.

Those are generally are provided a as an advisor sometimes we get paid modest when we get paid in China were seeing a lot of that happening right now.

Theres very little do a leasing taking place because obviously in many buildings, it's difficult to get access. So I think that you know if one were to ask me our people busy I would say in many ways there busier now than they ever been but the key.

Question is is that translating into revenue streams near term and we haven't yet seen it and suspect that.

That as Christian said, the Q Q2 will be will be difficult and hopefully will consistently get better over over the balance of the year. So.

That will give you a sense buildings themselves buying selling buildings, there's a lot of bottom feeders out there looking for building off or looking for buying opportunities there isn't necessarily debt in the marketplace. Although most lenders say, they're open for business, our and our.

Rob our Ah insight is that they're open for business only for the right business at the right terms, including you know higher higher interest rates on existing indebtedness. So.

It might be there for their most prominent clients, but it's not as readily available all of these things and you know the interesting thing about commercial real estate is we are active in these types in times of change. It is generally very good for real estate service providers.

Whether that translates into revenue streams and when it translates into revenue streams is another question.

Yeah. That's helpful. I just want one more if I may on top of Christians remarks around being on slide for the covenants.

I'm just wondering if you guys maybe looking to extend those just maybe.

To give us a little bit of wiggle room for M&A and just wondering how opportunistic will be on that front.

George you know, we're always looking to be opportunistic as it relates to acquisition opportunity opportunities.

May those may come later, this year or next year, and we will consider those that at that time.

Okay. Thanks.

Remember also remember also that we are in the process of two very significant transactions to companies that we we think our first class a and we'd like to complete them when the when conditions are met and both of those are.

Further our route our our game plan of extending more resilient Brazilian services for Colliers, while opening up huge new growth opportunities for us going forward. So we are already out there in terms of our next phase of growth.

And and believe that job once those transactions are completed we will again accelerate our growth plan as we have in the past.

Thank you.

Our next question comes from Atlanta, Matt Logan with RBC capital markets. Your line is open.

Thank you and good morning.

Hey, John.

Give us a little bit of color from an operational perspective, maybe just on how your professionals are adapting to a work from home environment and.

How this differs by you know your various service line.

Sure.

Hi, I think Thats, a you know.

I referenced silver linings.

And you know there are many actually in this difficult time and one has a profound.

How incredibly enterprising our professionals them and their ability to quickly.

Transition to working remotely using technology to communicate and collaborate both internally and with our clients.

Certainly there are certain things that are are more challenging to do during this time like walking space on you know I knew office lay out to it might be considering things like that but <unk>.

Those kind of things have been postponed, but I think the via the greater opportunity I'll be looking how to work through this period and transition to what they.

Gradual opening has been top of mind for our professionals, they've adapting to truly well with us and are now dispensing advice.

Some of which I've indicated already has been publicly made available.

And has been attended by literally thousands of people. So yeah, I would say across the board certainly the professionals who are typically in our workplace offices have done extremely well. Many of those are quite used to working remotely as it is certainly our number of our fee on losing advisors are between like.

At the office so.

Perhaps a little bit less of a change some of them and then as Jay spoke earlier, we do have certain people that are on site and have to be onsite.

Client buildings to the extent that those remain operating and hosting people. So we've adapted there as well I'd say all in all its been very.

Pleasant surprise to see how well.

Our professionals across our business and support staff.

We've also adapted to the new way of working which.

As temporary, but some of which way and maybe with us down the road.

That's great color and maybe just changing gears a little bit.

Given your expectations for stable results and outsourcing and advisory and the best management can you give us any thoughts on euro book for potential revenue declines on sales and lease brokerage no just maybe what you're seeing to date or if you think those two business lines may be different in any way in terms of the bag.

The two to the declines.

Matt I know we have.

Looked at a our.

I find the and our.

Well for expectations for the rest of the year.

From a bottoms up approach really through with each of our regions with each of our management teams around the world.

The revenue declines in a in brokerage.

As I said are going to be very significant.

It varies and.

In Q2, but really in terms of the overall, but we're focused on the year and it's difficult to predict what Q3 in Q4 going to look like.

Exactly it's difficult for us to predict what the full year it looked like but we made our best assumption at our best.

Best guess information, we have today to provide the working assumptions.

It all up but certainly you know brokerage will be a will be down still the lease brokerage both to be will be clear will be down.

And.

You know will develop more a year progresses.

Appreciate that and maybe just in terms of the differences between the two were you expecting to track.

Very similarly, directionally or would we expect to see lease brokerage performed better than sales brokerage in 2020.

I think that's the common assumption, but.

Is there it's difficult to answer the question because leasing up is a bigger component of our business in some regions and less of a component in other regions of our business.

And so it's very difficult to give you a a breakdown of how they might be on that on a global basis or even on a regional basis. So I think the best guess, we've given you is is a combined.

Brokerage.

Activity set up for the for the company across the board.

Well I appreciate the commentary that's all for me all alternatives to turn the call back.

Right.

Thank you. Our next question comes from the line of Stephen Sheldon with William Blair. Your line is open.

Good morning. Thanks.

First.

Good to hear about the inbound activity in the property management business I'm, just curious what would need to happen for you to be able to close some of those deals would that likely only happened in a minute material way once restrictions on that in person interactions are lifted or is that something they can happen to a certain agreed.

For travel opens up with clients be comfortable closing deals like thats remotely or do you need to see them in person.

We're seeing clients are closing deals on that primarily primarily for two reasons. What they are dissatisfied with existing service providers that a vacated in some cases or up or so many of their on sites that have just not been there too too.

Protect the buildings that they have number one and number two there really is a big push and rightly in our view.

For those that are both had an asset and property management manager to outsource the property management component of their business. So the turnover is easier in a circumstance like that they're turning over all of their onsite work and.

Some cases, the entire staff that that comes with that two colliers and frankly, it's been a little bit of a pressure on our property management operations, who are now looking back at some of their existing smaller accounts.

And for the first time and years looking to potentially call. Some of the smaller retainers that we have to make make a make availability for some of these larger opportunities that are that are coming up to four.

Got it.

Okay.

And then I think you gave some detail about property and project management and you said anything about valuations and advisory I missed its I guess what trends are you seeing there and the current environment over the last few months.

So valuations has been has gone through the roof. It had an amazing first quarter. It continues although not as not with the same velocity into this quarter I suspect it will fall off a little bit.

Going forward not to the same degree as as Brokerages. An example, and part of that is because a debt financing is not as rapidly available, but offsetting that a lot of lenders on properties that we would have valued a year ago are asking us to go.

When and re evaluate.

The the valuation we did a year ago in light of changing tenant profiles and their ability or two to pay rent. So I think the.

I think revenue would valuation will be less than it was the first quarter, but should continue.

By and large for the balance of the year.

Okay, and then last one for me what what do you think the current environment does for adoption of technology solutions for foresee already professionals.

For operators and users up in the medium term has there been anything surprising about the way these different parties abused.

Hi Tech solutions over the last few months.

Stephen as John.

Yeah. It has been a little bit surprising I mean, there was already a trend towards.

No more and use of technology, but this is really.

Forced many people to adopt.

Very quickly and.

No there's nothing like situation like this where dynamics a cause people to have to operate differently and technology has been one of the main ways to stay connected with both clients and colleagues and we are using it significantly.

Through our business and at the same time.

No we are continuing to carefully and my slate and bass and evaluate those technologies, which we believe are going to you know continued to facilitate our productivity working remotely and thinking about the future. How we can use this more effectively communicate into.

Library, we are our people.

So it has been very very interesting to watch and its going to add in the trend will continue its just been accelerated during the last a couple of months.

Great. Thank you.

Okay.

Thank you.

Our next question comes from Milan, and Stephen Macleod would be Imperial capital. Your line is open.

Great. Thank you good morning, guys.

Hi, I'm I just was wondering just following up on previous line of questioning around the brokerage business can you talk a little bit about kind of what you saw in terms of brokerage trends.

Through the quarter and more and more specifically kind of what you saw in terms of brokerage trends in March and potentially quarter to date as well.

Brokerage trends as you could see we had a very strong first quarter.

So brokerage.

Did exceedingly well during the quarter I would suggest that a lot of those transactions were transactions that started to culminating in November December January and.

And then resulted in transactions being completed either during the quarter and in fact.

During this current quarter, we're seeing.

Transactions still get completed and that's a that's both in North America, and Europe, and Asia as well, so I think that.

That we're seeing that we're seeing pipelines not as as as boy end in terms of new bit new buildings for sale.

And primarily because the new reality, yet has not said in with land owners and even buyers what is the value of the building going to be worth in the future I have a shopping mall. The shopping mall is a good shopping mall.

Except that 40% or less of the attendance paid.

I've got high leverage on the shopping mall is now the time to sell what am I going to do about it. So there's a lot of that is happening in office, it's happening even in the better asset classes of industrial and some of the other areas people are our re looking.

At real estate.

Hundreds are re looking at the asset classes to determine whether there's actually a change and in those asset classes that are more.

Bore.

Desirous than others, So I think theres a period of time here where.

People are going to unless there are financially strapped.

Unable to pay their desk I think for the most part theres going to be a period of time with people will wait to see.

What the new.

A value levels are up there are different.

Real estate assets.

Okay. That's so that's very good color. Thank you Jay.

And maybe just along those lines you talked a little bit about.

The you know this new reality has not yet sedan.

Do you view or did it.

Do you view any long term changes in how people view real estate. If you think about just the propensity for people to potentially work from home you know does that does that in your view lead to higher occupancy rates are vacancy rates in a in the office sector. For example is there any other any long term trends that have began to emerge or is it still too soon.

Well John May have may have a zone oh views on this but you know everything you're reading.

You've got to three people that say, we're going to have smaller office footprints in the future. Another three people will say, they're not going to change for this reason.

So I think that it's again still too early to make any pronouncements. There I think theres a lot of people dissecting different asset classes to determine different pricing levels, but in general terms real estate will continue to be a.

Group and and desirous asset.

Real estate, a borrowing rates or it is at historical lows, we'll continue to be at historical lows. When you compare privately owned real estate to the volatility of the marketplace.

It is still a very very good asset to own and I believe that.

I believe that.

Institutions will continue to add to allocate their capital to real estate and increasing numbers as they have over the past couple of years.

Well the only thing.

I'll just I'll just add briefly to that.

Yeah. The day as Jay said I think it's probably too early to make any conclusions about what's likely going to happen here.

But based on what we've seen now and the talk and the discussion of course, that's going or change, but based on that.

Or seems to be perhaps.

Some interest and more flexibility around the workplace.

Conceivably you there could be some.

Migration to working from home in a limited way.

One would think that that might reduce the amount of in the case of office the amount of space required.

But in the client configurations of many offices, they don't lend themselves to social distancing very well. So it may end up being sort of a net zero where.

If it wasn't for allowing certain people that work from home from time to time companies would have to expand our footprint or reconfigure it significantly.

And if they can simply work with existing footprint and then also allow a small part of their workforce to work remotely they can sort of stay.

The same level in terms of.

Workplace in office occupancy I.

I don't think it's had much of an impact on the industrial market. In fact, there are accepted or trends around industrial and logistics, which.

In some ways may continue and Ebix actually accelerated around E commerce and all those things that we've seen a lot of course during the crisis and a lot of that'll probably be continue what was the two biggest areas for colliers, there's a whole other sub set around retail which had its own challenges, which had been more exposed now it's a small part of that business.

But I think through our challenge there around retail and.

Redevelopment and other things and it's going to need to get done in that particular asset class. She is already spoken about somebody other areas that were involved in on the investment management side, So I won't repeat any of that but anyway, there's change here.

But in terms of how exactly it's going to end up after we get through all this nobody really knows right. Okay. That's so that's really helpful. Thanks. Thanks John.

And then maybe just finally, when you talk about the outsourcing and advisory business, you know not maybe excluding investment management.

You know because their way to quantify sort of how recurring the different components are when you think of property management project management, and workplace solutions and valuation and advisory.

Well, it's easy to quantify a property management is completely recurring revenue there are components of it that may not be as recurring so if I. If during the crisis I know owner decides that they want to cut the number of pod sites.

Down from previous levels, because buildings are to open that would reduce the revenue and associated margin with that but generally speaking it's a it's a business that we do.

Say six $700 million a year worldwide.

Builds on a monthly basis essentially a project management is another business, we probably do.

Three $400 million a year in that business on a global basis. It's built on a monthly basis. It's based on in large part staffing of jobs that are.

I have an average.

Job period of 18 months or so typically therefore from.

From a large institutions or governmental agencies infrastructure, so their long term relationships.

As it just using a Canadian example.

We've been working on the on the revitalization of the Parliament buildings and auto what now for 12 years and I understand the the job will be completed in 2032. So there's just an example of long term project management.

Valuations is a little bit less recurring except that once you have value we're building and in many cases owners need to have those buildings or lenders need to have those buildings reevaluated either quarterly or annually you.

You build a relationship and you're renewing it on an ongoing basis and earning fees on an ongoing basis and that's you know investment management aside so those business units and we've worked hard as you know Steve and over the years to change the nature of our company to focus on real estate.

Great services that are much more resilient those are resilient and we believe.

Our new foray into.

The mortgage servicing and debt placement area as well as engineering when those transactions get completed we'll just take us to an entirely new level of up of.

Of the composition of call your switches and our view significantly different than the other the other Ah companies in our sector.

So hopefully that gives you some color.

Yeah, that's a that's great. Thanks, thanks, so much for the color guys.

Thank you.

Our next question comes from Milan, and Frederic Bastien with Raymond James Your line is open.

Thank you Jay you sound pretty committed to the Dougherty and major acquisitions, but was hoping to get an update on both I'm. Just curious how long you can push potentially push to close of these transaction for.

Well, we're not pushing were not pushing the extension of either the transactions both of them are subject to.

Regulatory approval both of them are subject to closing adjustments.

In the case of Dougherty, obviously, there's been something called that pandemic out there and that has an impact on.

On closing adjustments. So we're looking at that very closely to make sure that.

We get what we pay for and we have the appropriate coverages, we need mazer is.

Just early days in the regulatory approval process approval process. Both of these transactions are high quality. Both of these transactions are with people that we are looking forward to working closely with both of these transactions are areas in which we.

We think wanted one could make six so.

We are.

We are committed having said that will only move forward, if if we have appropriate adjustments where necessary.

Okay Cool that's that's helpful. Thanks for the clarification on the.

And just curious of the 100 million hundred 50 million bucks or so and expected cost savings that you highlighted earlier how much.

How much of that would relate to your brokerage business most of it.

Yeah, I mean, the vast majority would be.

The brokerage business I mean certain support.

Staff may cover multiple areas, but we.

We really did try and become the laser focused on the areas that we felt were most susceptible to the impact of the measures taken do contain the pad pandemic and that's really why that so yeah. The vast majority would be a transaction related.

Alright, Thanks for that John that's all for me Okay. Yeah.

Thank you.

Next question comes from the line up some I guess I eat your line is open to see RBC.

Thanks morning, I'm, just one question from me or just one investment management, it's staying pretty good growth then and you I'm since you guys bought the platform.

Any early indications of where a lot much today and in your revised outlook I guess does that imply a I'm staying flat or is there any growth sort of baked in there.

Well my we had we had.

Hey, I'm wrote about 6% sequentially.

Okay and Q1.

And we would expect that we would have you know sort of similar.

Hey, you I'm growth through the remainder of the year.

Based on our pipelines of commitments and for for investment, which remain strong and our deployment of capital that's been.

Previously committed.

So you know modest.

Modest growth through the remainder of the year would be our view.

The only thing that I.

The only thing I'd add to that is.

Our investment management business now at them.

Bid Thirtys in terms of a web with significant operations in the U.S. and in Europe.

Is one of the largest if not the largest alternative asset investment management for a first class. They won they wanted this year the Peary best Investor in.

An alternate assets and.

People forget the fact that job that colliers owns one of the best in this in this very important segment of the a of the real estate investment management industry. It continues to grow by leaps and bounds. It has an amazing management team, we're very proud of them they continue to grow.

Their business beyond just the U.S. and.

And Europe, they're looking at Canada as an example, right now so.

This is another big area of growth, we think for colliers in the years to calm and we have a great partnership and assume a group of shareholders at Harrison Street that have.

I have really done an incredible job over many many many years.

So they continue to stay active during the the current shutdown I guess.

Yep Okay.

Okay.

That's helpful I'll turn it back thank you.

Thank you.

Showing no further questions at this time I would now like to turn the call back over to management for closing remarks.

Thank you very much operator.

You know we.

We would normally say, we look forward to having a our second quarter conference call whenever it whenever it takes place.

It'll be an interesting one as we'll see how brokerage rolls out for the balance of the year, but out we are anticipating a a difficult second quarter as it relates to brokerage.

But all else is working well at Colliers and ER, we we hope to be able to weather the storm.

Even in brokerage.

Better than most so thanks for joining us today and.

We look forward to speaking just soon.

Thanks.

Ladies and gentlemen. This concludes today's conference. Thank you for your participation you may now disconnect.

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