Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion provides an analysis of the company’s financial condition and results of operations from management’s perspective and should be read in conjunction with the consolidated financial statements and related notes included in this Annual Report. Discussion regarding our financial condition and results of operations for the year ended December 31, 2024 and comparisons between the years ended December 31, 2024 and 2023 are included in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s 2024 Annual Report was filed with the SEC on February 14, 2025.
Overview
CBRE is the world’s largest commercial real estate services and investment firm (based on 2025 revenue). In 2025, we served clients through four business segments – Advisory Services, Building Operations & Experience (BOE), Project Management and Real Estate Investments (REI) – which are described in “Item 1. Business” in this Annual Report. We generate revenue from both resilient sources and non-recurring sources, including commissions generated by transactions. Our revenue mix has become more weighted towards resilient revenue sources, particularly occupier outsourcing and project management, and we are less dependent on cyclical property sales and lease transaction revenue. Non-recurring transactional revenue and earnings within our Advisory Services segment (notably property sales and leasing) have historically been highest in the year’s fourth quarter due to a focus on completing transactions prior to year-end, but such seasonality has decreased as transactions have comprised a smaller proportion of our total revenue.
Business Environment
The operating environment for commercial real estate improved considerably in 2025. This is evident in markedly increased property leasing and sales activity compared with 2024 levels. Occupier demand for office, industrial and data center space in the U.S. was notably strong throughout the year. Broader capital availability, lower borrowing costs and improved occupancy market fundamentals buoyed investor sentiment and led to increased real estate sales and financing activity in 2025. Large occupiers’ growing appetite for outsourcing services continued to underpin demand for facilities management and project management activities.
Capital Allocation
We deployed approximately $2.7 billion of capital in 2025. Our largest deployments for the year were approximately $1.2 billion for the acquisition of Pearce, a leading provider of advanced technical services for digital and power infrastructure, and approximately $468 million to acquire the remaining 60% equity interest in Industrious, a flexible-workplace solutions and workplace experience platform. In addition, we deployed $956 million in 2025 to repurchase 7,052,481 shares.
Results of Operations
The following presents highlights of CBRE’s performance for the year ended December 31, 2025 (percentages represent comparison to 2024 results):
Revenue
GAAP Net Income
Core EBITDA (1)
GAAP Earnings Per Share (EPS)
Core EPS (1)
An improved operating environment supported strong growth for CBRE in 2025. Overall, revenue increased 13.4%. This included 13.4% revenue growth in our resilient businesses (including facilities management, project management, property management, loan servicing, valuations, other portfolio services, and recurring investment management fees), and 13.6% revenue growth in our transactional businesses (property sales, leasing, mortgage origination, carried interest and incentive fees in our investment management business, and development fees).
(1) See “ Non-GAAP Financial Measures. ”
Table of Contents
The following table sets forth items derived from our consolidated statements of operations for the years ended December 31, 2025 and 2024 (dollars in millions):
Year Ended December 31, (1)
Revenue:
Facilities management
Property management
Project management
Advisory leasing
Valuation
Loan servicing
Other portfolio services
Capital markets:
Advisory sales
Commercial mortgage origination
Investment management
Development services
Corporate, other and eliminations
Total revenue
Costs and expenses:
Pass-through costs (2)
Cost of revenue, excluding pass-through costs
Operating, administrative and other
Depreciation and amortization
Total costs and expenses
Gain on disposition of real estate
Operating income
Equity income (loss) from unconsolidated subsidiaries
Other income
Interest expense, net of interest income
Write-off of financing costs on extinguished debt
Income before provision for income taxes
Provision for income taxes
Net income
Less: Net income attributable to non-controlling interests
Net income attributable to CBRE Group, Inc.
Core EBITDA
(1) Calculated as a percentage of Total Revenue.
(2) Pass-through costs represent certain costs incurred associated with subcontracted third-party vendor work performed for clients. These costs are reimbursable by clients and the corresponding amounts owed are reflected within Revenue.
Table of Contents
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
We reported consolidated net income of $1.2 billion for the year ended December 31, 2025 on revenue of $40.6 billion as compared to consolidated net income of $968 million on revenue of $35.8 billion for the year ended December 31, 2024.
Revenue increased 13.4%, reflecting double-digit growth across the Advisory Services, BOE and Project Management segments, partially offset by a decrease in revenue in the REI segment.
Foreign currency translation had a 0.7% positive impact on total revenue during the year ended December 31, 2025, primarily driven by strength in the British pound sterling and euro, partially offset by weakness in the Indian rupee, Canadian dollar and Australian dollar.
Pass-through costs increased 12.4% during the year ended December 31, 2025 as compared to the same period in 2024 primarily due to revenue growth in the BOE and Project Management segments. F oreign currency translation had a 0.7% negative impact on pass-through costs.
Cost of revenue, excluding pass-through costs increased 16.7% during the year ended December 31, 2025 as compared to the same period in 2024 primarily due to revenue growth consistin g of higher commission expense and employee compensation, as well as higher indirect reimbursed costs. F oreign currency translation had a 0.6% negative impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs increased slightly to 40.0% of total revenue from 38.9%.
Operating, administrative and other expenses increased 10.6% during the year ended December 31, 2025 as compared to the same period last year primarily due to an increase in employee compensation driven by revenue growth, third-party fees related to acquisitions and integration activities, along with an increase in Telford’s fire safety provision. Foreign currency translation had a 0.7% negative impact on total operating expenses during the year ended December 31, 2025. Operating, administrative and other expenses as a percentage of revenue decreased to 13.7% from 14.0%, as operating expenses grew slower than revenue.
Depreciation and amortization expense increased by 8.2% during the year ended December 31, 2025 as compared to the same period in 2024, reflecting higher depreciation and amortization expense related to assets acquired from recent acquisitions, such as Pearce and Industrious.
Gain on disposition of real estate increased by $317 million during the year ended December 31, 2025, driven by monetization of real estate development projects and land sites in the REI segment.
We reported equity income of $40 million during the year ended December 31, 2025 compared to equity loss of $19 million in the same period in 2024. This was primarily driven by positive co-investment returns and sales in the current period, compared to higher unrealized equity losses in the prior period, driven by a fair value adjustment related to our non-core strategic equity investment in Altus Power, Inc. (Altus).
Other income decreased by 51.3% during the year ended December 31, 2025 as compared to the same period in 2024, primarily due to prior year positive fair value adjustments on certain investments.
Interest expense, net of interest income, increased by 0.5% for the year ended December 31, 2025, compared to the same period in 2024. This increase from the impact of increased commercial paper borrowings and issuance of senior term loans and new senior unsecured notes was essentially offset by the impact of net investment hedging activity.
Our provision for income taxes on a consolidated basis was $317 million for the year ended December 31, 2025 as compared to $182 million in 2024. Our effective tax rate increased to 19.9% in 2025 from 15.0% in 2024. The increase was primarily related to the benefit recognized in 2024 for the reversal of unrecognized tax positions.
The Organization for Economic Co-operation & Development (OECD) Pillar Two Model Rules established a minimum global effective tax rate of 15% on country-by country profits of large multinational companies. European Union member states along with many other countries adopted or expect to adopt the OECD Pillar Two Model effective January 1, 2024, or thereafter. In January 2026, the OECD issued a comprehensive Side by Side Package, which introduces additional administrative guidance intended to enhance coordination and simplify aspects of the global minimum tax framework. The package includes several new safe harbors including the new Side by Side and Ultimate Parent Entity safe harbors that may
Table of Contents
deem certain top-up taxes to be zero in jurisdictions with qualifying minimum tax regimes, such as the United States. We will continue to monitor additional administrative guidance and legislative action to incorporate the guidance into local law to assess the global impact of the Pillar Two Model Rules. The impact of Pillar Two top-up taxes was insignificant for 2025.
Resilient and Transactional Revenue
Revenue from resilient business lines is calculated as follows (dollars in millions):
Year Ended December 31,
Revenue from resilient business lines
Facilities management
Property management
Project management
Valuation
Loan servicing
Other portfolio services
Recurring investment management fees (1)
Revenue from resilient business lines
Revenue from transactional business lines (2)
Corporate, other and eliminations
Total revenue
(1) Recurring investment management fees is included in Investment management revenue.
(2) Transactional businesses include property sales, leasing, mortgage origination, carried interest and incentive fees in our investment management business, and development fees.
Segment Operations
In January 2025, we combined our project management business with our Turner & Townsend majority-owned subsidiary and created a fourth reportable segment, Project Management. In addition, on January 16, 2025, we acquired full ownership of Industrious, a provider of premium flexible workplace solutions, and established a new business segment, Building Operations & Experience (BOE), comprised of enterprise and local facilities management, property management and flexible workplace solutions.
In connection with the transactions described above, we organized our operations around, and publicly report our financial results for, four reportable business segments: (1) Advisory Services; (2) BOE; (3) Project Management; and (4) REI.
Advisory Services provides a comprehensive range of services globally, including leasing, capital markets (property sales and loan origination), loan servicing, and valuation. BOE provides a broad suite of integrated, contractually based outsourcing services to occupiers and owners of real estate, including facilities management and property management. Our Project Management business delivers program management, project management and cost consultancy services across commercial real estate, infrastructure and natural resources sectors. REI is a major real assets developer, investor and operator and is comprised of two businesses: investment management and development services.
We also have a Corporate and Other segment. Corporate primarily consists of corporate overhead costs, and costs associated with our platform that are not allocated to segments, including corporate leadership costs. Other consists of activities from strategic non-core non-controlling equity investments and is considered an operating segment but does not meet the aggregation criteria for presentation as a separate reportable segment and is, therefore, combined with Corporate and reported as Corporate and other. It also includes eliminations related to inter-segment revenue. For additional information on our segments, see Note 20 – Segments of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.
Table of Contents
Advisory Services
The following table summarizes our results of operations for our Advisory Services operating segment for the years ended December 31, 2025 and 2024 (dollars in millions):
Year Ended December 31, (1)
Revenue:
Advisory leasing
Valuation
Loan servicing
Other portfolio services
Capital markets:
Advisory sales
Commercial mortgage origination
Total segment revenue
Costs and expenses:
Pass-through costs (2)
Cost of revenue, excluding pass-through costs
Operating, administrative and other
Depreciation and amortization
Total costs and expenses
Operating income
Equity loss from unconsolidated subsidiaries
Other income
Add-back: Depreciation and amortization
Adjustments:
Impact of fair value non-cash adjustments related to unconsolidated equity investments
Business and finance transformation
Non-cash pension buy-out settlement loss
Costs associated with efficiency and cost-reduction initiatives
Segment operating profit
(1) Calculated as a percentage of Total Revenue.
(2) Pass-through costs represent certain costs incurred associated with subcontracted third-party vendor work performed for clients. These costs are reimbursable by clients and the corresponding amounts owed are reflected within Revenue.
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
Revenue increased 14.4% for the year ended December 31, 2025 as compared to the same period in 2024. Property sales revenue increased 20.0%, led by office, industrial, land and data centers in the U.S., APAC and Europe. Global leasing revenue rose 15.5%, led by industrial, data centers, and office leasing driven by Americas including 16.1% in the United States, EMEA which grew 15.9% and the United Kingdom, which grew 15.6%.
Foreign currency translation had a 0.4% positive impact on total revenue during the year ended December 31, 2025, primarily driven by strength in the euro and British pound sterling, partially offset by weakness in the Australian dollar and Canadian dollar.
Cost of revenue, excluding pass-through costs increased 18.8%, driven by business growth, higher commission expense and higher professional insurance and benefits, primarily resulting from a non-cash settlement charge related to a pension buy-out in the United Kingdom (U.K.). Foreign currency translation had a 0.3% negative impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs slightly increased to 59.4% of total revenue from 57.1% of total revenue for the same period in 2024 primarily due to escalating commission payouts driven by strong revenue growth.
Table of Contents
Operating, administrative and other expenses increased by 4.1% for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to higher employee compensation and bonus, higher business promotion and advertising expense, driven by growth in the business. Foreign currency translation had a 0.4% negative impact on total operating expenses.
For the year ended December 31, 2025, mortgage servicing rights (MSR) contributed $151 million to operating income, offset by $146 million of amortization of related intangible assets. For the year ended December 31, 2024, MSRs contributed $123 million to operating income, offset by $138 million of amortization of related intangible assets. The increase was associated with higher origination activity given an increase in financing activities.
Depreciation and amortization expense increased 5.8% primarily due to higher amortization of mortgage servicing rights as described above.
Table of Contents
Building Operations & Experience
The following table summarizes our results of operations for our BOE operating segment for the years ended December 31, 2025 and 2024 (dollars in millions):
Year Ended December 31, (1)
Revenue:
Facilities management
Property management
Total segment revenue
Costs and expenses:
Pass-through costs (2)
Cost of revenue, excluding pass-through costs
Operating, administrative and other
Depreciation and amortization
Total costs and expenses
Operating income
Equity (loss) income from unconsolidated subsidiaries
Other income
Add-back: Depreciation and amortization
Adjustments:
Integration and other costs related to acquisitions
Net results related to the wind-down of certain businesses (3)
Costs associated with efficiency and cost-reduction initiatives
Segment operating profit
(1) Calculated as a percentage of Total Revenue.
(2) Pass-through costs represent certain costs incurred associated with subcontracted third-party vendor work performed for clients. These costs are reimbursable by clients and the corresponding amounts owed are reflected within Revenue.
(3) In 2025, management made the decision to wind down certain businesses within the BOE Segment.
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
Revenue increased 14.9% for the year ended December 31, 2025 as compared to the same period in 2024, reflecting double-digit growth in facilities management and property management, primarily driven by new client wins, contract expansions, and the strategic impact of recent acquisitions. Foreign currency translation had a 0.7% positive impact on total revenue, primarily driven by strength in the British pound sterling and euro, and partially offset by weakness in the Indian rupee.
Pass-through costs increased 12.2% during the year ended December 31, 2025 as compared to the same period in 2024 primarily due to revenue growth in the BOE segment. F oreign currency translation had a 0.7% negative impact on pass-through costs.
Cost of revenue, excluding pass-through costs increased 18.5%, driven by higher professional compensation and indirect managed spend, due to revenue growth, as well as an increase driven by acquisitions. Foreign currency translation had a 0.7% negative impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs was 36.0% of total revenue, an increase from 35.0% for the year ended December 31, 2024.
Operating, administrative and other expenses increased 13.3%, primarily due to higher employee compensation and benefit expenses. Foreign currency translation had a 0.8% negative impact on total operating expenses during the year ended December 31, 2025.
Depreciation and amortization expense increased 15.0%, reflecting higher expenses related to intangibles from recent acquisitions such as Industrious.
Table of Contents
Project Management
The following table summarizes our results of operations for our Project Management operating segment for the years ended December 31, 2025 and 2024 (dollars in millions):
Year Ended December 31, (1)
Segment revenue
Costs and expenses:
Pass-through costs (2)
Cost of revenue, excluding pass-through costs
Operating, administrative and other
Depreciation and amortization
Total costs and expenses
Operating income
Other income
Add-back: Depreciation and amortization
Adjustments:
Integration and other costs related to acquisitions
Segment operating profit
(1) Calculated as a percentage of Total Revenue
(2) Pass-through costs represent certain costs incurred associated with subcontracted third-party vendor work performed for clients. These costs are reimbursable by clients and the corresponding amounts owed are reflected within Revenue.
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
Revenue increased 12.5% for the year ended December 31, 2025, led by strong business activity in the United Kingdom, North America and the Middle East, as well as increased revenue from pass-through costs. Foreign currency translation had a 0.8% positive impact on total revenue, primarily driven by strength in the Swiss franc and Singapore dollar, and partially offset by weakness in the Indian rupee.
Pass-through costs increased 13.5% during the year ended December 31, 2025 as compared to the same period in 2024 primarily due to revenue growth in the Project Management segment. F oreign currency translation had a 0.6% negative impact on pass-through costs.
Cost of revenue, excluding pass-through costs increased 12.5%, driven by increased professional compensation and higher reimbursable expenses. Foreign currency translation had a 0.7% negative impact on total cost of revenue, excluding pass-through costs. Cost of revenue, excluding pass-through costs was 32.0% of total revenue and remained flat compared to year ended December 31, 2024.
Operating, administrative and other expenses increased 14.1%, primarily due to higher employee compensation expenses and higher office management and administrative salaries. Foreign currency translation had a 1.3% negative impact on total operating expenses during the year ended December 31, 2025.
Depreciation and amortization expense decreased 6.3%, reflecting lower amortization expense due to intangible assets being fully amortized in 2024.
Table of Contents
Real Estate Investments
The following table summarizes our results of operations for our REI operating segment for the years ended December 31, 2025 and 2024 (dollars in millions):
Year Ended December 31, (1)
Revenue:
Investment management
Development services
Total segment revenue
Costs and expenses:
Cost of revenue
Operating, administrative and other
Depreciation and amortization
Total costs and expenses
Gain on disposition of real estate
Operating income
Equity income from unconsolidated subsidiaries
Other income
Add-back: Depreciation and amortization
Adjustments:
Carried interest incentive compensation expense to align with the timing of associated revenue
Net results related to the wind-down of certain businesses (2)
Costs associated with efficiency and cost-reduction initiatives
Provision associated with Telford’s fire safety remediation efforts
Segment operating profit
(1) Calculated as a percentage of Total Revenue
(2) In 2025, management made the decision to wind down the legacy Telford Homes’ construction self-delivery business.
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
Revenue decreased 15.3% for the year ended December 31, 2025 primarily due to lower incentive fees and carried interest partially offset by higher asset management fees in our Investment Management business and lower construction management and development fees from development services. Foreign currency translation had a 1.1% positive impact on total revenue during the year ended December 31, 2025, primarily driven by strength in the British pound sterling and euro.
Cost of revenue decreased 28.1% for the year ended December 31, 2025 as compared to the same period in 2024 due to lower construction costs incurred on our real estate development projects. Foreign currency translation had a 1.4% negative impact on total cost of revenue during the year ended December 31, 2025.
Operating, administrative and other expenses increased 23.1%, primarily due to an increase in Telford ’ s fire safety provision, higher impairment losses and higher bonuses in the development services line of business, partially offset by a decrease in variable incentive compensation in our investment management line of business. Foreign currency translation had a 1.5% negative impact on total operating expenses.
Gain on disposition of real estate increased by $290 million compared to the same period in 2024 due primarily to gains recognized upon monetization of real estate development assets and land sites in the United States.
We recorded equity income from unconsolidated subsidiaries of approximately $48 million versus equity income of $117 million during the same period in 2024, primarily due to lower sales in the current year as compared to prior year.
Table of Contents
A roll forward of our assets under management (AUM) by product type for the year ended December 31, 2025 is as follows (dollars in billions):
Funds
Separate Accounts
Securities
Total
Balance at December 31, 2024
Inflows
Outflows
Market appreciation
Balance at December 31, 2025
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 to be 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.
Table of Contents
Corporate and Other
Our Corporate segment primarily consists of corporate overhead costs. Other consists of activities from strategic non-core non-controlling equity investments and is considered an operating segment but does not meet the aggregation criteria for presentation as a separate reportable segment and is, therefore, combined with our core Corporate function and reported as Corporate and other. The following table summarizes our results of operations for our core Corporate and other segment for the years ended December 31, 2025 and 2024 (dollars in millions):
Year Ended December 31, (1)
Elimination of inter-segment revenue
Costs and expenses:
Cost of revenue (2)
Operating, administrative and other
Depreciation and amortization
Total costs and expenses
Gain on disposition of real estate
Operating loss
Equity income (loss) from unconsolidated subsidiaries
Other income
Add-back: Depreciation and amortization
Adjustments:
Integration and other costs related to acquisitions
Charges related to indirect tax audits and settlements
Business and finance transformation
Costs associated with efficiency and cost-reduction initiatives
Costs incurred related to legal entity restructuring
Segment operating loss
(1) Percentage of revenue calculations are not meaningful and therefore not included.
(2) Primarily relates to inter-segment eliminations.
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
Core corporate
Operating, administrative and other expenses for our core corporate functions rose 5.4% to $762 million for the year ended December 31, 2025, mainly due to higher costs related to acquisitions, integration activities and higher management incentive compensation.
Other (non-core)
We recorded equity income of $3 million in the year ended December 31, 2025, reflecting the higher value of our investment in publicly traded Altus, which was acquired by a third-party on April 16, 2025, offset by losses on other investments. This compares with a $134 million loss during the same period in 2024, reflecting the lower valuation of our investment in Altus.
Table of Contents
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 facilities and commercial paper program. Our expected capital requirements for 2026 include up to $500 million of anticipated capital expenditures, net of tenant concessions. During the year ended December 31, 2025, we incurred $366 million of capital expenditures. As of December 31, 2025, we had aggregate future commitments of $216 million related to co-investments funds in our REI segment, up to $70 million of which is expected to be funded in 2026. Additionally, as of December 31, 2025, we are committed to fund additional capital of $226 million and $56 million to consolidated and unconsolidated projects, respectively, within our REI segment. As of December 31, 2025, we had $3.8 billion of borrowings available under our revolving credit facilities (under both the 5-Year Revolving Credit Agreement and 364-Day Revolving Credit Agreement, as described below, and the Turner & Townsend revolving credit facility) and $1.9 billion of cash and cash equivalents. We intend to maintain available commitments under the 5-Year Revolving Credit Agreement in an amount at least equal to the amount of commercial paper notes outstanding from time to time. As of December 31, 2025 and 2024, we had $852 million and $175 million, respectively, in outstanding borrowings under the commercial paper program.
We have historically relied on our internally generated cash flow, our revolving credit facilities and commercial paper program to fund our working capital, capital expenditure and general investment requirements (including in-fill acquisitions) and have not sought other external sources of financing to help fund these requirements. In the absence of extraordinary events, large strategic acquisitions or large returns of capital to shareholders, we anticipate that our cash flow from operations, our revolving credit facilities and commercial paper program 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 are generally 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. 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.
On November 13, 2025, we issued $750 million in aggregate principal amount of 4.900% senior notes due 2033, generating aggregate net proceeds of approximately $742 million, after offering expenses. We used the net proceeds from this offering to repay borrowings under our commercial paper program used in connection with the Pearce acquisition and other corporate purposes.
On May 12, 2025, we issued $600 million in aggregate principal amount of 4.800% senior notes due 2030 and $500 million in aggregate principal amount of 5.500% senior notes due 2035, generating aggregate net proceeds of approximately $1.1 billion after offering expenses. On May 28, 2025, we used a portion of the proceeds from this offering to redeem in full the $600 million aggregate outstanding principal amount of our 4.875% senior notes due 2026.
As noted above, we believe that any future significant acquisitions 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.
Our long-term liquidity needs, other than those related to ordinary course obligations and commitments such as operating leases, generally consist of the following: 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 December 31, 2025 and 2024, we had accrued deferred purchase consideration totaling $279 million ($149 million of which was a current liability) and $292 million ($199 million of which was a current liability), respectively, which was included in “Accounts payable and accrued expenses” and in “Other long-term liabilities” in the accompanying consolidated balance sheets set forth in Item 8 of this Annual Report.
Table of Contents
Lastly, as described in Note 17 – Stockholders’ Equity of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report, in November 2024, our Board of Directors (Board) authorized an additional $5.0 billion to our existing $4.0 billion share repurchase program (as amended, the 2024 program) bringing the total authorized amount under the 2024 program to a total of $9.0 billion as of December 31, 2025. The Board also extended the term of the 2024 program through December 31, 2029.
During the year ended December 31, 2025, we repurchased 7,052,481 shares of our common stock with an average price of $135.52 per share for an aggregate of $956 million under the 2024 program. During the period January 1, 2026 through February 10, 2026, we repurchased 607,935 shares of our common stock with an average price of $167.08 per share for an aggregate of $102 million. As of December 31, 2025 and February 10, 2026, we had $4.9 billion and $4.8 billion, respectively, of capacity remaining under the 2024 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 programs 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.
As more fully described in Note 22 – Telford Fire Safety Remediation of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report, on March 16, 2023, Telford Homes entered into a legally binding agreement with the U.K. government to take responsibility for performing or funding remediation works relating to certain life-critical fire-safety issues on all Telford Homes-constructed buildings of 11 meters in height or greater in England constructed in the last 30 years (in-scope buildings) and withdraw Telford Homes-developed buildings from the government-sponsored funds or reimburse the government funds for the cost of remediation.
We had an estimated liability of approximately $321 million (of which $126 million was current) and $204 million (of which $102 million was current) as of December 31, 2025 and 2024, respectively, related to the remediation efforts. We recognized an additional provision in the year ended December 31, 2025 based on additional information obtained and evaluations performed allowing for a more refined estimate on a building-by-building basis.
The estimated remediation costs for in-scope buildings are subjective, highly complex and dependent on a number of variables outside of Telford Homes’ control. These include, but are not limited to, individual remediation requirements for each building, the time required for the remediation to be completed, cost of construction or remediation materials, availability of construction materials, potential discoveries made during remediation that could necessitate incremental work, investigation costs, availability of qualified fire safety engineers, potential business disruption costs, potential changes to or new regulations and regulatory approval. We will continue to closely monitor these developments and will update estimates as additional information becomes available regarding regulatory expectations, design specifications and contractor pricing.
Table of Contents
Historical Cash Flows
Operating Activities
Net cash provided by operating activities totaled $1,559 million for the year ended December 31, 2025 as compared to net cash provided by operating activities of $1,708 million during the year ended December 31, 2024. The decrease in net cash provided by operating activities was driven by net outflows associated with working capital movements, largely due to the costs associated with onboarding new clients and the timing of cash collections and vendor payments, offset by higher cash inflows from earnings, driven by strong revenue growth.
Investing Activities
Net cash used in investing activities totaled $1,627 million for the year ended December 31, 2025 as compared to net cash used in investing activities of $1,514 million during the year ended December 31, 2024. The increase of $113 million in cash outflows was primarily driven by higher cash paid for acquisitions in the current period; primarily consisting of the acquisitions of Industrious and Pearce, compared to the prior period when we acquired J&J Worldwide Services and Direct Line. The increase was offset by higher proceeds received from real estate sales.
Financing Activities
Net cash provided by financing activities totaled $796 million for the year ended December 31, 2025 as compared to net cash used in financing activities of $221 million for the year ended December 31, 2024. The increased cash inflow was primarily driven by higher net proceeds from the issuance of long-term debt in the current period, compared to prior year, partially offset by cash paid to repurchase common stock and the redemption of our 4.875% senior notes.
Table of Contents
Summary of Contractual Obligations and Other Commitments
The following is a summary of our various contractual obligations and other commitments as of December 31, 2025 (dollars in millions):
Payments Due by Period
Contractual Obligations
Total
Less than 1 year
Total gross long-term debt (1)
Short-term borrowings (2)
Operating leases (3)
Finance leases (3)
Total gross notes payable on real estate (4)
Deferred purchase consideration (5)
Total contractual obligations
Amount of Other Commitments
Other Commitments
Total
Less than 1 year
Self-insurance reserves (6)
Co-investments (7) (8)
Letters of credit (7)
Guarantees (7) (9)
Telford’s fire safety remediation provision (10)
Total other commitments
The table above excludes estimated payment obligations for our qualified defined benefit pension plans. For information about our future estimated payment obligations for these plans, see Note 15 – Employee Benefit Plans of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.
(1) Reflects gross outstanding long-term debt balances as of December 31, 2025, assumed to be paid at maturity, excluding unamortized discount, premium and deferred financing costs. See Note 12 – Long-Term Debt and Short-Term Borrowings of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report. Figures do not include scheduled interest payments. Assuming each debt obligation is held until maturity, we estimate that we will make $1.4 billion of interest payments, $243 million of which will be made in 2026.
(2) The majority of this balance represents our warehouse lines of credit, which are recourse only to our wholly-owned subsidiary CBRE Capital Markets, Inc. (CBRE Capital Markets) and are secured by our related warehouse receivables. See Note 5 – Warehouse Receivables & Warehouse Lines of Credit and Note 12 – Long-Term Debt and Short-Term Borrowings of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.
(3) Includes forecasted interest expense. See Note 13 – Leases of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.
(4) Reflects gross outstanding notes payable on real estate as of December 31, 2025 ($3 million of which is recourse to us, beyond being recourse to the single-purpose entity that held the real estate asset and was the primary obligor on the note payable), assumed to be paid at maturity, excluding unamortized deferred financing costs. Amounts do not include scheduled interest payments. The notes have either fixed or variable interest rates, ranging from 3.0% to 8.0% at December 31, 2025.
(5) Represents deferred obligations, excluding contingent consideration, related to previous acquisitions, which are included in accounts payable and accrued expenses and other long-term liabilities in the consolidated balance sheets at December 31, 2025 set forth in Item 8 of this Annual Report.
(6) Represents outstanding reserves for claims under certain insurance programs, which are included in other current and other long-term liabilities in the consolidated balance sheets as of December 31, 2025 set forth in Item 8 of this Annual Report. While $15 million of the $218 million in claim payments are expected to be payable within one year, due to the nature of this item, claim payments representing the remaining balance of $203 million could be due at any time upon the occurrence of certain events. Accordingly, the entire balance has been reflected as expiring in less than one year.
(7) See Note 14 – Commitments and Contingencies of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.
(8) Includes $216 million to fund future co-investments in our Investment Management business, up to $70 million of which is expected to be funded in 2026, and $56 million committed to invest in unconsolidated real estate development projects. This amount does not include capital committed to consolidated real estate development projects of $226 million as of December 31, 2025.
(9) Due to the nature of guarantees, payments could be due at any time upon the occurrence of certain triggering events, including default. Accordingly, all guarantees are reflected as expiring in less than one year.
(10) See Note 22 – Telford Fire Safety Remediation of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.
Table of Contents
Indebtedness
We use a variety of financing arrangements, both long-term and short-term, to fund our operations in addition to cash generated from operating activities. We also use several funding sources to avoid becoming overly dependent on one financing source, and to lower funding costs.
Long-Term Debt
On July 10, 2023, CBRE Group, Inc. (CBRE Group), CBRE Services, Inc. (CBRE Services) and Relam Amsterdam Holdings B.V., a wholly-owned subsidiary of CBRE Services (Relam Borrower), entered into a new 5-year senior unsecured Credit Agreement (2023 Credit Agreement) maturing on July 10, 2028, which refinanced and replaced the previous credit agreement. The 2023 Credit Agreement provides for a senior unsecured term loan credit facility comprised of (i) tranche A Euro-denominated term loans in an aggregate principal amount of €367 million (Tranche A (Euro) Loans) and (ii) tranche A U.S. Dollar-denominated term loans in an aggregate principal amount of $350 million (Tranche A (USD) Loans) with weighted-average interest rate of 3.8% as of December 31, 2025, both requiring quarterly principal payments beginning on December 31, 2024 and continuing through maturity on July 10, 2028. The proceeds of these term loans under the 2023 Credit Agreement were applied to the repayment of all remaining outstanding senior term loans, approximately $437 million, under the previous credit agreement, the payment of related fees and expenses and other general corporate purposes.
On March 13, 2025, CBRE Group, CBRE Services and Relam Borrower entered into Amendment No. 1 to the 2023 Credit Agreement, which provided for, among other things, the ability of Relam Borrower to obtain incremental commitments and loans under the 2023 Credit Agreement in an aggregate principal amount of $750 million (or the Euro equivalent). On March 14, 2025, CBRE Group, CBRE Services and Relam Borrower entered into Amendment No. 2 and Incremental Assumption Agreement to the 2023 Credit Agreement, pursuant to which Relam Borrower incurred incremental term loans (i) denominated in Euros in the aggregate principal amount of €425 million (Incremental Euro Term Loans) and (ii) denominated in U.S. Dollars in the aggregate principal amount of $125 million (Incremental USD Term Loans). The Incremental Euro Term Loans have the same terms applicable to, and constitute the same class as, the Tranche A (Euro) Loans, and the Incremental USD Term Loans have the same terms applicable to, and constitute the same class as, the Tranche A (USD) Loans under the 2023 Credit Agreement. The proceeds of the Incremental Euro Term Loans and the Incremental USD Term Loans were used for working capital and other general corporate purposes (including the partial repayment of borrowings under the commercial paper program) and to pay fees and expenses incurred in connection with entering into the amendments to the 2023 Credit Agreement. On June 24, 2025, CBRE Group, CBRE Services and Relam Borrower entered into Amendment No. 3 to the 2023 Credit Agreement, for the purpose of, among other things, amending the financial covenants to remove the interest coverage ratio covenant and to increase certain baskets and thresholds in the 2023 Credit Agreement in a manner consistent with the terms of the Revolving Credit Agreements described below.
The term loan borrowings under the 2023 Credit Agreement are fully and unconditionally guaranteed on a senior basis by CBRE Group and CBRE Services.
On November 13, 2025, CBRE Services issued $750 million in aggregate principal amount of 4.900% senior notes due January 15, 2033 (the 4.900% senior notes) at a price equal to 99.813% of their face value. The 4.900% senior notes are unsecured obligations of CBRE Services and are guaranteed on a senior basis by CBRE Group. Interest accrues at a rate of 4.900% per year and is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2026.
On May 12, 2025, CBRE Services issued $600 million in aggregate principal amount of 4.800% senior notes due June 15, 2030 (the 4.800% senior notes) at a price equal to 99.065% of their face value. The 4.800% senior notes are unsecured obligations of CBRE Services and are guaranteed on a senior basis by CBRE Group. Interest accrues at a rate of 4.800% per year and is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2025.
On May 12, 2025, CBRE Services issued $500 million in aggregate principal amount of 5.500% senior notes due June 15, 2035 (the 2035 5.500% senior notes) at a price equal to 99.549% of their face value. The 2035 5.500% senior notes are unsecured obligations of CBRE Services and are guaranteed on a senior basis by CBRE Group. Interest accrues at a rate of 5.500% per year and is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2025.
Table of Contents
On February 23, 2024, CBRE Services issued $500 million in aggregate principal amount of 5.500% senior notes due April 1, 2029 (the 2029 5.500% senior notes) at a price equal to 99.837% of their face value. The 2029 5.500% senior notes are unsecured obligations of CBRE Services and are guaranteed on a senior basis by CBRE Group. Interest accrues at a rate of 5.500% per year and is payable semi-annually in arrears on April 1 and October 1 of each year.
On June 23, 2023, CBRE Services issued $1.0 billion in aggregate principal amount of 5.950% senior notes due August 15, 2034 (the 5.950% senior notes) at a price equal to 98.174% of their face value. The 5.950% senior notes are unsecured obligations of CBRE Services and are guaranteed on a senior basis by CBRE Group. Interest accrues at a rate of 5.950% per year and is payable semi-annually in arrears on February 15 and August 15 of each year.
On March 18, 2021, CBRE Services issued $500 million in aggregate principal amount of 2.500% senior notes due April 1, 2031 (the 2.500% senior notes) at a price equal to 98.451% of their face value. The 2.500% senior notes are unsecured obligations of CBRE Services and are guaranteed on a senior basis by CBRE Group. 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.
On August 13, 2015, CBRE Services issued $600 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. We redeemed these notes in full on May 28, 2025. This redemption was funded using net proceeds from the offering of our 4.800% senior notes and 2035 5.500% senior notes.
The indentures governing our outstanding senior notes described above 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.
Our senior notes are fully and unconditionally guaranteed by CBRE Group.
Combined summarized financial information for CBRE Group (parent) and CBRE Services (subsidiary issuer) is as follows (dollars in millions):
December 31,
Balance Sheet Data:
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities (1)
Total liabilities (1)
Year Ended December 31,
Statement of Operations Data:
Revenue
Operating (loss) income
Net (loss) income
(1) Includes $8.3 billion and $8.9 billion of intercompany loan payables to non-guarantor subsidiaries as of December 31, 2025 and 2024, respectively. All intercompany balances and transactions between CBRE Group and CBRE Services have been eliminated.
For additional information on all of our long-term debt, see Note 12 – Long-Term Debt and Short-Term Borrowings of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.
Table of Contents
Short-Term Borrowings
On June 24, 2025, we entered into a new 5-year senior unsecured Revolving Credit Agreement (the 5-Year Revolving Credit Agreement) which replaced our prior revolving credit agreement dated August 5, 2022. The 5-Year Revolving Credit Agreement provides for a senior unsecured revolving credit facility available to CBRE Services with commitments in an aggregate principal amount of up to $3.5 billion and a maturity date of June 24, 2030.
The 5-Year Revolving Credit Agreement requires us to pay a fee based on the total amount of the revolving credit facility commitment (whether used or unused). In addition, the 5-Year Revolving Credit Agreement also includes capacity for letters of credit not to exceed $300 million in the aggregate and capacity for swingline loans not to exceed $300 million in the aggregate. The 5-Year Revolving Credit Agreement is fully and unconditionally guaranteed by CBRE Group.
As of December 31, 2025, no amount was outstanding under the revolving credit facility provided for by the 5-Year Revolving Credit Agreement. $17 million of letters of credit were outstanding as of December 31, 2025. Letters of credit are issued in the ordinary course of business and would reduce the amount we may borrow under this revolving credit facility. As of December 31, 2024, $132 million was outstanding under our prior revolving credit facility. No letters of credit were outstanding as of December 31, 2024.
On June 24, 2025, we entered into a new 364-day senior unsecured Revolving Credit Agreement (the 364-Day Revolving Credit Agreement, and together with the 5-Year Revolving Credit Agreement, the Revolving Credit Agreements). The 364-Day Revolving Credit Agreement provides for a senior unsecured revolving credit facility available to CBRE Services with commitments in an aggregate principal amount of up to $1.0 billion and a maturity date of June 23, 2026.
The 364-Day Revolving Credit Agreement requires us to pay a fee based on the total amount of the revolving credit facility commitment (whether used or unused). The 364-Day Revolving Credit Agreement is fully and unconditionally guaranteed by CBRE Group.
As of December 31, 2025, no amount was outstanding under the revolving credit facility provided for by the 364-Day Revolving Credit Agreement.
On December 2, 2024, CBRE Services established a commercial paper program pursuant to which we may issue and sell up to $3.5 billion of short-term, unsecured and unsubordinated commercial paper notes with up to 397-day maturities, under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. Payment of the commercial paper notes is guaranteed on an unsecured and unsubordinated basis by CBRE Group. The program notes and the guarantee will rank pari passu with all other unsecured and unsubordinated indebtedness. The proceeds from issuances under the program may be used for general corporate purposes. The company intends to maintain available commitments under the Revolving Credit Agreement in an amount at least equal to the amount of commercial paper notes outstanding from time to time. As of December 31, 2025, we had $852 million in outstanding borrowings under the commercial paper program with a weighted-average annual interest rate of 3.84%. As of February 10, 2026 and December 31, 2024, we had $1.1 billion and $175 million, respectively, in outstanding borrowings under the commercial paper program.
In addition, Turner & Townsend maintains a £120 million revolving credit facility pursuant to a credit agreement dated March 31, 2022, with an additional accordion option of £20 million, that matures on March 31, 2027. As of December 31, 2025, no amount was outstanding under this revolving credit facility. As of December 31, 2024, $44 million (£35 million) was outstanding under this revolving credit facility.
We also maintain warehouse lines of credit with certain third-party lenders. For additional information on all of our short-term borrowings, see Note 5 – Warehouse Receivables & Warehouse Lines of Credit and Note 12 – Long-Term Debt and Short-Term Borrowings of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.
Table of Contents
Critical Accounting Policies and Estimates
Our consolidated financial statements have been prepared in accordance with U.S. 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.
Revenue Recognition
To recognize revenue in a transaction with a customer, we evaluate the five steps of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606, “ Revenue from Contracts with Customers ” revenue recognition framework: (1) identify the contract; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations and (5) recognize revenue when (or as) the performance obligations are satisfied.
Our revenue recognition policies are consistent with this five-step framework. Understanding the complex terms of agreements and determining the appropriate timing, amount, and method to recognize revenue for each transaction requires significant judgement. These significant judgements include: (i) determining what measure of progress or what point in time best depicts the transfer of control to the customer; (ii) applying the series guidance to certain performance obligations satisfied over time; (iii) estimating how and when contingencies, or other forms of variable consideration, will impact the timing and amount of revenue recognition and (iv) determining whether we control third party services before they are transferred to the customer in order to appropriately recognize the associated revenue on either a gross or net basis. The timing and amount of revenue recognition in a period could vary if different judgments were made. Our revenues subject to the most judgment are sales and lease commission revenue, incentive-based management fees, development fees and third party fees associated with our occupier outsourcing and property management services. For a detailed discussion of our revenue recognition policies, see the Revenue Recognition section within Note 2 – Significant Accounting Policies of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.
Goodwill and Other Intangible Assets
As of December 31, 2025, our consolidated balance sheets included goodwill of $7.1 billion and other intangible assets of $3.0 billion.
Our acquisitions require the application of purchase accounting, which results in tangible and identifiable intangible assets and liabilities of the acquired entity being recorded at fair value. We may engage a third-party valuation firm to assist us in identifying and determining the fair value of intangible assets acquired. The difference between the purchase price and the fair value of net assets acquired is recorded as goodwill. Assumptions must often be made in determining fair values, particularly where observable market values do not exist. Assumptions may include discount rates, growth rates, cost of capital, royalty rates, tax rates and remaining useful lives. These assumptions can have a significant impact on the value of identifiable assets and accordingly can impact the value of goodwill recorded. Different assumptions could result in different values being attributed to assets and liabilities, the amount of periodic depreciation and amortization expense recognized, and the results of future asset impairment reviews.
We test goodwill and other intangible assets deemed to have indefinite lives as of the beginning of the fourth quarter of each year and more frequently if events and circumstances indicate the potential for impairment is more likely than not. We have the option to perform a qualitative assessment with respect to any of our reporting units and indefinite-lived intangible assets to determine whether a quantitative impairment test is needed. We are permitted to assess based on qualitative factors whether it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying amount before applying the quantitative impairment test. Our procedures under qualitative tests include assessing our financial performance, macroeconomic conditions, industry and market considerations, various asset-specific factors and entity-specific events. If we determine that a reporting unit’s goodwill or an indefinite-lived intangible asset may be impaired after utilizing these qualitative impairment analysis procedures, we perform a quantitative impairment test to determine the amount, if any, of impairment to recognize. When performing a quantitative test, we use a combination of market and income approaches. The market approach is based on the guideline public company method which estimates the value of our reporting units by applying valuation multiples of selected guideline public companies to the reporting unit’s key operating metrics. The income approach is based on the discounted cash flow method which estimates the fair value of our reporting units and
Table of Contents
indefinite-lived intangible assets by estimating the present value of projected future cash flows. Management’s judgment is required to develop assumptions to estimate fair values, including selected market multiples for the guideline public company method and revenue growth rates, profit margin percentages, and discount rates for the discounted cash flow method. Due to the many variables inherent in the estimation of these fair values and the relative size of our goodwill and indefinite-lived intangible assets, if different assumptions and estimates were used, it could have an adverse effect on our impairment analysis.
We did not incur any impairment losses as a result of our impairment tests performed in 2025, as it was determined that the fair value of the reporting units exceed the carrying value as of the date quantitative tests were performed and it is more likely than not that the estimated fair values of our reporting units and indefinite-lived intangible assets were substantially in excess of their carrying values as of December 31, 2025. Additionally, we do not believe that the estimated fair values of our reporting units or indefinite-lived intangible assets are at risk of decreasing below their carrying values in the next twelve months. For additional information on goodwill and intangible asset impairment testing, see Note 2 – Significant Accounting Policies and Note 10 – Goodwill and Other Intangible Assets of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.
Income Taxes
Income taxes are accounted for under the asset and liability method in accordance with the “Accounting for Income Taxes,” FASB ASC (Topic 740). Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax basis of assets and liabilities and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured by applying enacted tax rates and laws and are released in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are provided against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.
Accounting for tax positions requires judgment, including estimating reserves for potential uncertainties. We also assess our ability to utilize tax attributes, including those in the form of carryforwards, for which the benefits have already been reflected in the financial statements. We do not record valuation allowances for deferred tax assets that we believe will be realized in future periods. While we believe the resulting tax balances as of December 31, 2025 and 2024 are appropriately accounted for in accordance with Topic 740, as applicable, the ultimate outcome of such matters could result in favorable or unfavorable adjustments to our consolidated financial statements and such adjustments could be material.
Our future effective tax rate could be adversely affected by earnings being lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates, changes in the valuation of our deferred tax assets or liabilities, or changes in tax laws, regulations, or accounting principles, as well as certain discrete items.
See Note 16 – Income Taxes of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report for further information regarding income taxes.
Telford Fire Safety Remediation
As of December 31, 2025, the company had an estimated liability of $321 million on the balance sheet which represents estimated future losses associated with overall remediation efforts. It includes amounts that the U.K. government has already paid or quantified through the Building Safety Fund and estimates developed by Telford’s management and/or third-party experts for the remaining in-scope buildings. The estimates were developed using the best available data, including (i) industry data, (ii) fire safety assessments (also known as Publicly Available Specification (PAS) assessments and include fire risk appraisal of external wall construction) which identified remediation work to be performed on specific buildings, and (iii) bids from subcontractors. We applied an inflation factor to account for uncertainty in completion of remediation activities, which could take an extended period of time to complete, an estimate of direct costs associated with an internal team dedicated to this remediation, and a contingency to account for unknown remediation costs. Inherent uncertainties exist in such evaluations primarily due to its subjective, highly complex nature and other unknowns such as individual remediation requirements, time required for remediation, and cost of materials and resources amongst others. We will continue to assess new information as it becomes available during the remediation process and adjust our estimated liability accordingly.
See Note 22 – Telford Fire Safety Remediation of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report for further information.
Table of Contents
Investments in unconsolidated subsidiaries – fair value option
We have elected the fair value option for certain of our investments in non-public entities to align with our strategy for these investments. Such investments without readily determinable fair values are classified as Level 3 in the fair value hierarchy. We estimate the fair market value on a recurring basis using significant unobservable inputs which requires judgment due to the absence of market prices or similar assets in active markets. In determining the estimated fair value of these investments, we utilize appropriate valuation techniques including discounted cash flow analyses and Monte Carlo simulations. Key inputs to the discounted cash flow analyses include projected cash flows, terminal growth rate, and discount rate. Key inputs to Monte Carlo simulations include stock price, volatility, risk free rate, and dividend yield.
Changes in the fair value of equity investments under the fair value option are recorded as equity income from unconsolidated subsidiaries in the Consolidated Statements of Operations.
New Accounting Pronouncements
See New Accounting Pronouncements discussion within Note 3 – New Accounting Pronouncements of the Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.
Table of Contents
Non-GAAP Financial Measures
Core EBITDA, core adjusted net income and core earnings per share (or core EPS) are not recognized measurements under accounting principles generally accepted in the United States, or U.S. GAAP. We use core EBITDA, core adjusted net income and core EPS as indicators of the company’s operating financial performance.
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 U.S. 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 costs and charges that may obscure the underlying performance of our business and related trends. Because not all companies use identical calculations, our presentation of core EBITDA, core adjusted net income and core EPS may not be comparable to similarly titled measures of other companies.
Core EBITDA represents earnings before the portion attributable to non-controlling interests, depreciation and amortization, asset impairments, net interest expense, write-off of financing costs on extinguished debt, income taxes, further adjusted for the following items (Other adjustments):
• integration and other costs related to acquisitions,
• carried interest incentive compensation expense to align with the timing of associated revenue,
• charges related to indirect tax audits and settlements,
• net results related to the wind-down of certain businesses,
• impact of fair value adjustments related to unconsolidated equity investments,
• business and finance transformation,
• non-cash pension buy-out settlement loss,
• costs associated with efficiency and cost-reduction initiatives,
• costs incurred related to legal entity restructuring,
• net fair value adjustments on strategic non-core investments, and
• provision associated with Telford’s fire safety remediation efforts.
Core adjusted net income and core EPS exclude the effect of Other adjustments noted above, from U.S. GAAP net income and U.S. GAAP earnings per diluted share. In addition, these metrics are further adjusted for:
• non-cash amortization expense related to intangible assets attributable to acquisitions,
• interest expense related to indirect tax audits and settlements,
• write-off of financing costs on extinguished debt,
• impact of adjustments on non-controlling interest, and
• the tax impact of adjusted items and strategic non-core investments.
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, income taxes and the accounting effects of capital spending.
Core EBITDA, core adjusted net income and core EPS are not intended to be measures of free cash flow for our discretionary use because they do not consider certain cash requirements such as tax and debt service payments. These measures 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
Table of Contents
also use core EBITDA and core EPS as significant components when measuring our operating performance under our employee incentive compensation programs.
Core EBITDA is calculated as follows (dollars in millions):
Year Ended December 31,
Net income attributable to CBRE Group, Inc.
Net income attributable to non-controlling interests
Net income
Adjustments:
Depreciation and amortization
Interest expense, net of interest income
Write-off of financing costs on extinguished debt
Provision for income taxes
Integration and other costs related to acquisitions
Carried interest incentive compensation expense to align with the timing of associated revenue
Charges related to indirect tax audits and settlements
Net results related to the wind-down of certain businesses (1)
Impact of fair value non-cash adjustments related to unconsolidated equity investments
Business and finance transformation
Non-cash pension buy-out settlement loss
Costs associated with efficiency and cost-reduction initiatives
Costs incurred related to legal entity restructuring
Net fair value adjustments on strategic non-core investments
Provision associated with Telford’s fire safety remediation efforts
Core EBITDA
Core net income attributable to CBRE Group, Inc. stockholders, as adjusted (or core adjusted net income), and core EPS, are calculated as follows (in millions, except share and per share data):
Year Ended December 31,
Net income attributable to CBRE Group, Inc.
Adjustments:
Non-cash amortization expense related to intangible assets attributable to acquisitions
Interest expense related to indirect tax audits and settlements
Write-off of financing costs on extinguished debt
Impact of adjustments on non-controlling interest
Integration and other costs related to acquisitions
Carried interest incentive compensation expense to align with the timing of associated revenue
Charges related to indirect tax audits and settlements
Net results related to the wind-down of certain businesses (1)
Impact of fair value non-cash adjustments related to unconsolidated equity investments
Business and finance transformation
Non-cash pension buy-out settlement loss
Costs associated with efficiency and cost-reduction initiatives
Costs incurred related to legal entity restructuring
Net fair value adjustments on strategic non-core investments
Provision associated with Telford’s fire safety remediation efforts
Tax impact of adjusted items and strategic non-core investments
Core net income attributable to CBRE Group, Inc., as adjusted
Core diluted income per share attributable to CBRE Group, Inc., as adjusted
Weighted-average shares outstanding for diluted income per share
(1) In 2025, management made the decision to wind down the legacy Telford Homes’ construction self-delivery business. In addition, management made the decision to wind down certain businesses within the BOE Segment.
Table of Contents
