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Colliers Is Eyeing Acquisitions With $1B To Spend

Colliers' headquarters at 181 Bay St., Toronto.

Fresh off a multimillion-dollar equity infusion, Colliers is sitting on a $1B war chest, according to the company's earnings call Thursday.

"With the $300M equity offering completed during the first quarter, we are well-positioned with more than $1B in available liquidity to execute on acquisition opportunities as the year unfolds," CEO of Real Estate Services Chris McLernon said. 

The first-quarter equity deal involved a syndicate of underwriters led by BMO Capital Markets and J.P. Morgan that bought more than 2.4 million subordinate voting shares of Colliers at $121 per share.

Colliers recently completed the acquisition of its affiliate in Philadelphia, increasing its presence in the mid-Atlantic states. Other affiliate acquisitions are possible, McLernon said on the call, including Houston, Denver, South Carolina and perhaps Columbus. 

“Right now you can you can buy more traditional real estate service businesses at relatively low valuations, for obvious reasons,” CEO Jay S. Hennick said.

Revenue for the Toronto-based company in the quarter was $1B, up 4% from a year ago, and the company turned in net earnings per share of 26 cents, compared with a loss per share in Q1 2023 of 47 cents.

Improvements in the firm's advisory business offset losses related to a lethargic capital markets environment, executives said during the call. After a difficult 2023, the company is pressing forward with a fresh equity infusion and an eye on growth in secondary markets.

“Outsourcing & Advisory, Investment Management and Leasing all showed improvement over the prior year. Our focus on expanding high-value, recurring service lines is paying off handsomely, reshaping and repositioning our business for the future. As expected, ongoing interest rate uncertainty and geopolitical tensions continued to weigh on Capital Markets,” Hennick said in a statement.

For Q1, income from outsourcing and advisory, which generally describes a firm's management and consulting of real estate on behalf of others, was up 9% year-over-year to $497M, according to Colliers' filings. Income from capital markets, meanwhile, sank 9% from 2023 to $138M.

Leasing did show a slight uptick, rising by 2% from last year, when most of the country's major brokerages, Colliers included, reported income losses

Hennick indicated during the earnings call that some improvement had occurred in office leasing while industrial leasing had softened, but neither he nor his company's financials disclosed specifics.

“Leasing globally achieved modest growth, with several markets increasing activity in the office sector as occupiers make longer-term lease commitments, coupled with the returns to office continuing the trend upwards,” Hennick said during the call.

Hennick called the capital markets business soft but said that transactions could pick up later in the year if interest rates improve.

Colliers stock dipped about 0.8% Thursday morning, coming in at about $105 per share. Earlier this year, shares traded as high as about $129 per share.