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Colliers International Group Inc (NASDAQ:CIGI)
Q3 2020 Earnings Call
Oct 27, 2020, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Hello and welcome to Colliers International Third Quarter Investors Conference Call. Today's call is being recorded.

Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance or achievements contemplated in the forward-looking statements.

Additional information concerning factors that could use actual results to materially differ from those in the forward-looking statements is contained in the Company's annual information form as filed with the Canadian Securities Administrators and in the Company's annual report on Form 40-F as filed with the US Securities and Exchange Commission. As a reminder, today's call is being recorded, today is October 27, 2020.

And at this time, for opening remarks and introductions, I would like to turn the call over to the Global Chairman and Chief Executive Officer, Jay Hennick. Sir, you may begin.

Jay Hennick -- Global Chairman and Chief Executive Officer

Thank you, operator. Good morning everyone and thanks for joining us for our third quarter conference call. As the operator mentioned, I'm Jay Hennick, Chairman and Chief Executive Officer of the Company. With me today is John Friedrichsen, Chief Operating Officer; and Christian Mayer, Chief Financial officer. This conference call is being webcast and is available in the Investor Relations section of our website, and presentation slide deck is also available to accompany today's call.

Despite the impact of the pandemic, Colliers reported better-than-expected results for the third quarter with continued growth from recurring services. These results are a testament to the resilience of our business model, a business that is also diversified by geography, by service and by asset class. Revenues came in at $692 million, down 6%. Adjusted EBITDA was $92 million, up 9%, and adjusted earnings per share came in at $1.08, up 4% relative to the prior year. While uncertainties persist, we expect our full-year results to come in stronger than anticipated. As a result, we have increased our operating assumptions for the balance of the year as you will hear.

In a few minutes, I'll turn things over to Christian and John for comment. But before I do, I'd like to make four points today. The first is, culture counts. Our unique entrepreneurial culture at Colliers has always been a differentiator for us. Culture takes years to create and discipline to sustain and that's why it's so difficult to copy. I'm extremely proud of our leadership teams around the world who continue to execute the Colliers way. Our bias for action and propensity to make informed decisions quickly has always allowed us to respond better than most to contain costs, to align resources, while always continuing to provide essential advice to our clients. I'm also confident that coming out of this pandemic, we will adapt to the new normal faster and better than the others with our unique entrepreneurial -- enterprising culture, leading the way.

Second, like we've done in the past, Colliers is programmed to capitalize on opportunities. We always maintain a strong balance sheet to capitalize on opportunities to strengthen our business, especially in times of change when others are either hitting the pause button or running for cover. This year was no exception. So far we've invested $240 million in acquisitions, up from $45 million last year.

During the quarter, we continued to integrate recently acquired Colliers Mortgage and Maser Consulting and also completed the acquisition of Colliers Nashville, a leader in one of the fastest growing markets in the United States. Though still in the early days, I'm very excited about the potential for all of these additions this year and look forward to helping them accelerate their growth as part of our global platform. We continue to see great opportunities out there, to add talent, to expand our services and to streamline our businesses, while also looking for incremental acquisition targets to strengthen and further diversify our business.

Number three, almost 60% of our earnings now come from high-quality recurring services. Having such a high percentage of our earnings coming from recurring revenues, gives Colliers more resilience than ever and clearly sets us apart, not only in terms of the percentage of recurring revenues, but also in terms of the quality of the recurring revenues.

Today, the investment management, property management, project management, engineering and design and mortgage services, represent a growing majority of our business and we fully expect this growth to continue in the years to come. Make no mistake, there is nothing wrong with traditional capital markets and leasing. Transaction volumes may be down, but they will be back and they'll be back strongly, as the economy stabilizes, because they are essential services that are needed and required by real estate owners and occupiers everywhere. In fact, we're already seeing some signs of recovery in most of our markets as John will talk about.

Finally, it's time to a better -- to better appreciate the value of what we're creating at Colliers. The Colliers leadership team has been creating value for shareholders for a long time. Over the past 25 years, we've delivered about 20% compound annual growth rate in share value. This record of achievement is enviable to say the least, but it also suggests that we know a thing or two about how to value and build high quality service businesses. The way I see it, Colliers remains materially undervalued. From an investment perspective, where they value us on a stand-alone basis or on the basis of the sum -- of the sum of the parts, Colliers trades at a significant discount to other property or professional service companies with similar characteristics. Where can you find a global, highly diversified company with an institutional brand, compelling growth prospects on a global basis with almost 60% of its earnings coming from resilient revenue streams, trading at the value that we trade at, especially one with an impressive track record of creating value for shareholders, where management has so much skin on the game, almost 40% of the equity of our Company.

With that said, I'd like to now pass things over to Christian. Christian?

Christian Mayer -- Chief Financial Officer

Thank you, Jay. As announced earlier today, Colliers reported better than expected financial results for the third quarter. My comments follow the flow of the slides posted on the Investor Relations section of colliers.com to accompany this call. Please note that the non-GAAP measures referenced on this call are defined in the press release issued today. All references to revenue growth are calculated based on local currency.

Third quarter revenues were $692 million, down 7% relative to the prior year. Internal revenues were down 19% primarily due to the impact of the COVID-19 pandemic [Technical Issues] and capital markets operations globally. Our internal revenue variance showed significant improvement sequentially that is relative to Q2 2020, as economies began to reopen after the initial phase of the pandemic. Third quarter consolidated adjusted EBITDA was $92 million, up 8% from $84 million last year, with margins at 13.3% versus 11.4% in the prior year quarter. Margins in each regions were impacted by reduced revenues but mitigated by continuing aggressive measures to manage expenses including discretionary support at NIM costs, as well as compensation.

In the case of the Americas, margins were favorably impacted by acquisitions. Americas Q3 revenues totaled $423 million essentially flat versus the prior year period overall. Americas' Outsourcing & Advisory revenues were up 25% as a result of engineering and loan servicing revenues from recent acquisition. Capital markets' revenues were down 6%, but include the benefit of debt origination revenues from recent acquisition. Leasing revenues were down 18%, a significant improvement from the 45% reduction experienced during Q2. Adjusted EBITDA was $55 million, up 41% from last year with significant contribution for acquisitions as well as continuing cost savings implemented early during the pandemic.

In the EMEA region, Q3 revenues were $117 million, down 19% overall. Capital markets was down 37%. Leasing was down 25% and Outsourcing & Advisory was down 4%, all impacted by the ongoing pandemic. And Adjusted EBITDA for the region was $8 million compared to $13 million last year. In the Asia-Pacific region, Q3 revenues were $110 million, down 23%. Leasing and capital markets were down 45% and 35% respectively, as all markets and asset classes impacted.

Outsourcing & Advisory revenues were down 5%. Adjusted EBITDA was $13 million, compared to $19 million last year. Q3 investment management revenues were $42 million, up 4%. Assets under management were $36.2 billion as at September 30, 2020, up modestly from June 30. Harrison Street's demographic investment strategy focuses on lower volatility, alternative asset classes, including student and senior housing, medical office, storage and social infrastructure for the most part [Technical Issues].

Operator

Ladies and gentlemen, please standby. Your conference will continue momentarily. Please standby. Once again, ladies and gentlemen, please continue to standby, your conference will resume momentarily. Thank you for your patience.

You're connected.

Christian Mayer -- Chief Financial Officer

Thank you. Q3 investment management revenues were $42 million, up 4%. Assets under management were $36.2 billion at September 30, 2020, up modestly from June 30, 2020. Harrison Street's demographic investment strategy focused on lower volatility alternative asset classes, including student and senior housing, medical office, storage and social infrastructure. And for the most part, the underlying guide of these assets remained stable.

Adjusted EBITDA for the quarter was $15 million versus $16 million in the comparative period, impacted by catch-up fees on a new fund earned in the prior year quarter. Our net debt to adjusted EBITDA leverage ratio was 1.5 times as of September 30, 2020, which was the same as the prior quarter and well within our target range. The full impact of the pandemic remains far-reaching and uncertain. However, as Jay mentioned, we have updated our working assumption for the balance of the year to reflect better-than-expected operating results for the third quarter as well as to narrow the range to the balance of the year. The updated revenue range for 2020 full year is at 10% to 15% decline, relative to 2019. The updated adjusted EBITDA range is the 10% to 15% decline relative to 2019.

Looking forward, we expect transactional leasing and capital markets revenues, both of which have a highly variable cost structure, to remain below 2019 level to the fourth quarter. Investment management and Outsourcing & Advisory revenues are expected to remain on track for the fourth quarter.

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

John Friedrichsen -- Chief Operating Officer

Thank you, Christian. As reflected in our Q3 results and updated working assumption for the balance of the year, the level of uncertainty related to the COVID-19 pandemic that negatively impacted our operations and those or most of our clients abated somewhat during the last few months, although we are not out of the woods yet.

We saw a positive change in sentiment and momentum during the last few months and we expect this trend to continue for the balance of the year and beyond, supporting modest improvement in business activity. As a global business and leading provider of professional services and investment management, to property occupiers, owners and investors, Colliers continue to put clients first, providing our diverse and relevant experience during this unprecedented period.

Based on our experience since the outset of the pandemic, we are confident that the time, attention and value delivered today will be rewarded by our clients when the current level of uncertainty reduces and longer term decision making resumes. In fact, we are already seeing tangible examples of our advice leading to significant client engagements, most notably in our workplace advisory practices, which we anticipate will lead to future transaction advisory work.

Across our global business, our business leaders, professionals and support staff remain highly engaged, despite the challenging operating conditions and the cost-containment measures in place. With just about 6% of our employee base still furloughed, primarily in transactional services, we continue to manage our business carefully and expect to bring back additional supporting capacity as activity levels warrant.

Despite the pandemic, Colliers continues to strategically invest in talent across our global platform and take advantage of opportunities to close gaps and build capabilities by attracting leaders and professionals, looking to be part of a global business where the entrepreneurial spirit is alive and well. We expect this to continue and accelerate going forward. And to complement this investment in people, we continue to invest in technology that helps improve our productivity and service to clients. Over the next couple of weeks, you will hear about our latest innovation, workplace expert, a mobile enabled app designed to serve as a user-friendly diagnostic tool to visualize the future workplace using a variety of inputs based on client preferences. This technology was the first developed by Colliers globally under our new updated IT platform and strategy development, that focuses on our client's most pressing needs. A beta version of this technology with the input and involvement of our global workplace practices team has been responsible for winning workplace advisory engagements with several hallmark clients in Europe and the US recently.

While cost management remains an operational priority across our business, other areas of focus include the integration of Colliers Mortgage into our US brokerage operations, as well as more recently acquired Maser Consulting. In both cases, we have accelerated the process of cross-selling by leveraging our relationships across relevant advisory practices, that drive value of our clients and brokerage professionals across our US platform.

Looking beyond the current crisis, we expect to see a significant uptick and leasing in capital markets transactions across our global markets, largely related to deferred decision making by occupiers and investors to reverse. Driving a recovery in activity which from an operational perspective, we intend to maximize by leveraging our recent investments in acquisitions, talent and technology, and emerging from the current crisis stronger than ever before.

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

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from the line of George Doumet with Scotiabank. Your line is open.

George Doumet -- Scotiabank -- Analyst

Good morning, and congrats on yet another strong quarter.

Jay Hennick -- Global Chairman and Chief Executive Officer

Thanks, George.

John Friedrichsen -- Chief Operating Officer

Thank you.

George Doumet -- Scotiabank -- Analyst

You guys raised your 2020 working assumptions, Q4 is our big quarter, you must have some visibility there. Can you maybe share what you're seeing, in terms of pent-up demand? And second part to that question, do you guys feel comfortable that you've baked in enough wiggle room there, giving the pretty meaningful second wave that we're seeing in Europe and the Americas?

Jay Hennick -- Global Chairman and Chief Executive Officer

Well, George, I mean, when you look at the working assumption -- it is working assumption and there is a number of factors at play there. And certainly we can't predict the future, but we can take a look at our pipelines of activity. And as you're aware, for sure, Q4 of the very strong transactional activity quarter, in particular in our EMEA business. And our EMEA business typically in a normal year generates close to half an EBITDA in Q4 because it has that high transactional activity waiting. So we've taken a look at our pipelines to talk to our teams and we feel at this stage based on what we know today, quite confident in our working assumption for Q4. That being said, there is new factors that come to play, we'll have to -- those are ones we can anticipate.

George Doumet -- Scotiabank -- Analyst

Okay, thanks. Maybe a question to John as to where we're trending on the $150 million in cost savings. I think we're at $60 million last quarter. And second part of that is how much do you guys plan on investing back into the business over the next maybe next few quarters?

John Friedrichsen -- Chief Operating Officer

Look, in terms of that number, we're pretty much right on, where we were going to be. So the reason, been no change to that number, that's been a consistent factor, since we initially identify what we expect those savings to be, so we're running right at that level. And in terms of investment, I'm not going to quantify that, George, it is very selective and somewhat opportunistic around talent. It depends on the availability and whether or not we can connect and make arrangements which work for those that we're hopeful of joining Colliers and for the Company itself.

And then ongoing spend around particular technology we've already indicated our expected amount for capex this year, which is down, but roughly half of the capex relates to technology in some way. And while we have deferred certain expenditures in that area, we are still focusing on those that will drive the greatest return to Colliers during the current period and beyond. So we're still investing there definitely.

George Doumet -- Scotiabank -- Analyst

Okay, fine. And just one last one if I may. Maybe to Jay, I'm just wondering if the pandemics, has it all kind of rethink the investment management segment, maybe more particular what types of asset classes that you'd be interested in acquiring?

Jay Hennick -- Global Chairman and Chief Executive Officer

It's a good question, but I think the best way to do to answer it is to go back to the very strategic decision we made at the time we entered investment management. We didn't want to go into the investment management business as a same as. And we wanted to have a unique and differentiated product or service offering. We spend a lot of time looking at virtually every type of platform in investment management around the world and concluded that alternative asset classes where institutions were significantly expanding their allocations was the place for us to be. They also have a moat in that business because it is a more complicated -- it's a more complicated way of managing assets, which creates a differentiator, keeps most of the people out of the space. And so we concluded that Harrison Street was the ideal platform. And on top of that they had an incredible management team with a great desire to grow really on all course with what we look for in a partnership relationship.

So the pandemic has not changed that at all. In fact we are luck, scale, call it what you want, but we're very happy where we are. We continue to look in alternate asset classes as a way to grow that segment of our business but also assets or strategies that have clear differentiation, they're not the same as, they are clearly differentiated strategy. So I think we have a tremendous platform here and tremendous leadership team, it's obviously been growing, as you can see despite the pandemic, most others have seen asset values fall. We are essentially flat and I would say we're flat because some of the investors have pressed pause on making further allocations had nothing to do with the quality of the assets that we wither [Phonetic]. So we're very happy with Harrison Street, I think it has a bright future, looking at some interesting opportunities to continue to grow it.

We have an amazing management team that we've got great confidence in. And I think the future in that segment of our business is very bright.

George Doumet -- Scotiabank -- Analyst

Okay. Great. Thanks for answers, I'll hop in line.

Operator

Thank you. Our next question comes from the line of Frederic Bastien with Raymond James. Your line is open.

Frederic Bastien -- Raymond James -- Analyst

Hi. Good morning, everybody. Was wondering...

John Friedrichsen -- Chief Operating Officer

Good morning.

Frederic Bastien -- Raymond James -- Analyst

Was wondering if you're able -- I was wondering if you're able to quantify the contribution that both Maser and Dougherty made to the Outsourcing & Advisory and the capital markets service lines respectively?

Jay Hennick -- Global Chairman and Chief Executive Officer

Yes, Fred, we get the internal growth rates on a consolidated basis not by region. But as you're aware, the both businesses are concentrated in the Americas segment and I'll tell you that the EBITDA growth internally in the Americas was positive and contributions from the acquisitions was significant and as I always mentioned [Phonetic] in my comments.

Frederic Bastien -- Raymond James -- Analyst

Okay, cool. On a related topic, our engineering and mortgage banking services that you plan on growing aggressively in the EMEA and Asia Pac regions? Or is there something unique about these markets that would -- that would keep you from doing that?

Jay Hennick -- Global Chairman and Chief Executive Officer

I think our goal in both segments is they were additional engines for growth that were very closely tied to our core business. We are looking at opportunities in both segments globally. We are obviously taking advantage of our existing platforms and spending most of our time trying to leverage what we own into bigger businesses, bigger opportunities. But having these additional recurring earnings service lines within our family provides great growth opportunities not just in the Americas, but virtually around the world.

Frederic Bastien -- Raymond James -- Analyst

Thanks, Jay. Are there service lines if you'd like to add that you're not currently offering that some of your peers maybe offering that you're not?

Jay Hennick -- Global Chairman and Chief Executive Officer

Well, you know, it's interesting question, I'm not sure our peers -- are our peers as much as people think. We have really evolved our business as you would know, Fred, you followed us for a lot of years. If you compare us to some of the names that you mentioned, I think we are closer to property service and professional service lines and less so, those other businesses. Yes, a portion of our business overlaps with the others but we are increasingly evolving differently. So that's what I would say to that comment.

And the second thing I would say is that, we have -- we've been fortunate to add to great new engines for growth. Three, if you include investment management, which we completed in early '18, and in fact been on the books for even longer than that. So we've got our -- we've got so many opportunities to grow in our existing service lines. We have an incredible culture, which I've talked about, you've seen in action for so many years, means we can execute on transactions globally, despite what's going on in with travel and a variety of other things. So we feel like we are in a very unique position and have a unique culture that is used to growing internally and through acquisition. And we'll continue to pursue that over the next number of years. Did we lose you?

Frederic Bastien -- Raymond James -- Analyst

Thank you. No, thank you. Congrats. Congrats and keep it going.

Operator

Thank you. Our next question comes from the line of Stephen MacLeod with BMO Capital. Your line is open.

Stephen MacLeod -- BMO Capital -- Analyst

Thank you. Good morning guys and congratulations on another great quarter.

Jay Hennick -- Global Chairman and Chief Executive Officer

Thanks, Stephen.

John Friedrichsen -- Chief Operating Officer

Thank you.

Stephen MacLeod -- BMO Capital -- Analyst

The Outsourcing & Advisory business, really led the way this quarter in terms of the revenue contribution and the revenue resiliency. Can you just -- notwithstanding obviously that the mortgage and engineering services businesses were positive contributors. Can you just give a breakdown of how each segment within Outsourcing & Advisory trended in the quarter?

Jay Hennick -- Global Chairman and Chief Executive Officer

Well, I would say that property management was very, very stable. Steve, like flat to perhaps even up in a couple of markets. And then the project management business was down slightly, particularly in India. And India has had very challenging situations with its control of the coronavirus and we're watching that closely. And that business has seen delays in its productivity in the project management space. So the valuation and advisory continues to be resilient. And business there, particularly in the US is very strong, but also solid elsewhere around the world.

Stephen MacLeod -- BMO Capital -- Analyst

Okay. Will the engineering business -- will Maser and Colliers Mortgage be the new platforms within Outsourcing & Advisory, but will you be segmenting those revenues separately in different segments and different sort of verticals?

Jay Hennick -- Global Chairman and Chief Executive Officer

They are cornered [Phonetic] of Outsourcing & Advisory for sure. So, loan servicing and engineering and we will not be explicitly segmenting those. They will be part of the -- of that Outsourcing & Advisory Group just like the other [Indecipherable].

Stephen MacLeod -- BMO Capital -- Analyst

Right. Okay. Okay. Now, that's great. Thank you. And then when you think about Q4, you talk a little bit about the pipeline that you have in the visibility that you have. How would you characterize your visibility beyond Q4 into 2021, is that something that is beginning to evolve or emerge in terms of your sidelines?

John Friedrichsen -- Chief Operating Officer

Steve, this is John. Look, this is all about uncertainty. And I think at this point, it's a little bit too early to tell what '21 will show for us. But one thing we do know is that there has been an incredible deferrals of activity, particularly in leasing where companies have opted to make short-term decisions and ultimately that's not really where they want to be. They just need a bit more clarity. And then we expect there to be a resumption of longer term that might adjust a little bit of relevance to the way it was in the past. But most occupiers are going to want uncertainty and certain landlords do as well, beyond just sort of a one-year roll forward. So that is coming and whether in 2021 or later, we don't know at this point. But it's significant and it will occur either next year or the year after. So we certainly have that, as sort of anecdotal evidence is what we expect.

Stephen MacLeod -- BMO Capital -- Analyst

Okay, that's helpful. And then maybe just finally you mentioned the entrepreneurial culture and you've made quick decisions around that the cost adjustments that you needed in the early days of the pandemic, and clearly that's benefited EBITDA over the last couple of quarters. I'm just curious as you see revenues recover, do you have to bring more cost back into the platform to support those revenues? Or are you now at a position where you can pursue other revenue growth opportunities without adding back -- without adding the costs that you've taken out back in?

Jay Hennick -- Global Chairman and Chief Executive Officer

So, Stephen, we expect to take out a $150 million this year of costs. And as we look forward, we think we can become more efficient in a number of areas. This has been a real a bit of challenging, but yet rewarding experience in some ways with silver linings appearing through some of the things we've seen and learned. And certainly our hope is that when we start to reinstitute some of these costs in 2021 and going forward that we will not have to reinstitute all of these costs. We will be able to make some pretty significant transformation in the way we do business, the way we approach travel and discretionary expenses, the way we approach some of our support staffing in our transaction with these particular, but also on the other businesses. So our intention would be that, our cost structure will be different, going forward, as we return to more normal conditions.

Stephen MacLeod -- BMO Capital -- Analyst

Okay, that's helpful. And then maybe just one final one. Just maybe for Jay, I was wondering if you could talk a little bit about the Colliers Mortgage and Maser and how those businesses have trended relative to your expectations in the -- somewhat short period that you've [Indecipherable] obviously very strategically important decisions, just wondering how your experience has been so far?

Christian Mayer -- Chief Financial Officer

So in terms of those businesses, we're very pleased with their performance. To date we own them for a very short period of time. But we spent, obviously a lot of time in due diligence with them, so we know them well. And the period we've owned them has been very, very successful so far with integration proceeding well, as Jay has outlined and John also [Indecipherable] in his comments. The Colliers Mortgage business is benefiting from some strong refinancing activity, at the moment, and that will continue for the next few quarters.

Interest rates, as you know are at historic lows is in our attractive time for multifamily property owners to refinance properties. So it is benefiting from that and it's also taking market share in a Fannie Mae origination which is what we expected would happen. And so those factors are combining to -- bring very solid operating results. The engineering business is performing well in all the sectors that it plays in, and the margin performance there as well has been strong with strong staff, utilization and productivity from the client -- from the employee base.

Stephen MacLeod -- BMO Capital -- Analyst

Great. Thank you very much and congratulations.

John Friedrichsen -- Chief Operating Officer

Thank you.

Operator

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

Stephen Sheldon -- William Blair. -- Analyst

Hi, thanks and congrats on the continued strong execution. Wanted to ask a little more directly about the visibility you have especially if you look into 2021 and how your clients are thinking about their office footprints at this point. And the adoption of remote working policies, could it take an extended period for companies to think through work from home adoption, which could continue to weigh on lease durations per period?

John Friedrichsen -- Chief Operating Officer

Stephen, absolutely I think you hit the nail that had, I think it's going to take a time a bit of time here to sort out. I mean it's a perplexing issue when you think about it. I mean, and it's dynamic, because it's changing and every company has got a different perspective on how important the workplace is and how it impacts our culture and all those kinds of things. I mean, the short answer is that in the immediate term, it's difficult to change the dynamics and that's partly why there has been a deferral, I think of so many decisions around leasing. But you know, as I said in my remarks our workplace advisory business really run-off their feet counseling with the who is who of companies that are all going through a discovery process currently to evaluate what they think best works for them going forward. And that's going to I think unfold over the next several months and well into next year, and then beyond that, decisions will get made and there will be a little bit more certainty, but it certainly is a great time to be in the workplace advisory business as long as you've got 24 hours a day to expense your advise.

Stephen Sheldon -- William Blair. -- Analyst

Got it. Makes sense. And I think the thought out there, it's been leasing activity, would likely come back and recover before investment sales in particular, in office, especially just given the impact of leasing dynamics [Indecipherable] property, can have on our properties value. How do you think about that dynamic, especially that seems like investment sales activity is holding up as well arguably, maybe a touch better than leasing so far?

John Friedrichsen -- Chief Operating Officer

Yeah, I mean, seeing the impact on leasing is really around deferrals which many companies have opted to sort of roll forward in consultation with the landlords who obviously want to retain their tenants, roll forward -- a year forward. So the additional obligation and based on the way most of the industry is paid on fees, the fees are adjusted accordingly. So this becomes a bit of a short-term situation right now and depresses overall leasing revenues. But certainly the activity will resume and revenues will again come back to where they were before, once companies are more engaged to commit to longer periods of time, around the time when they have more certainty as to what their future occupancy requirements are likely to be.

So I think we'll start seeing a lot more of that once we get into, say mid-2021 if the pandemic again kind of goes through the second wave here and then ultimately resolves and things come back to whatever the new normal is in 2021 or beyond.

Stephen Sheldon -- William Blair. -- Analyst

Got it. And then last one for me, just curious what the M&A pipeline looks like right now? And have you seen anything notable in terms of valuation expectations out there, especially for smaller players that may have less flexibility to write out the volatility?

Jay Hennick -- Global Chairman and Chief Executive Officer

The short story is, yes. I think there is a lot of people, lot of targets, that field a missed optimum time to potentially sell their business. I'm now talking about more traditional capital markets and leasing. We're being very, very careful there. We're excited about buying significant business like our affiliate in Nashville, which is something like 90 professionals, fully balanced business, property management valuation, project management and expertise and healthcare obviously, in that segment of the market. They happen to be the market leader, also in Nashville.

So from our perspective, that is a profile type opportunity. We're seeing some of those around the world, couple in the US, several in Europe and a couple in Asia, more Australia and New Zealand, in particular. But generally speaking, I think the -- it's fragile for acquisitions right now, although valuations for acquisitions, particularly those that have high incurring earnings, are up significantly and that's because there is a lot of private equity firms, chasing these types of assets in the hope of potentially consolidating and doing whatever they do. And ultimately I think they're going to have more headwinds than normal given the maturity of the marketplace.

It's very powerful for Colliers Mortgage to associate itself with Colliers because there's so many different points of leverage, both between Colliers and Harrison Street and I'd say the same for Maser. And we're seeing that in a variety of different M&A opportunities. So we've got a nice pipeline, whether it'll be able to bring some of the [Indecipherable] is a different question. But the beauty is, when we make a deal, it's for the right reason, it's because the leadership teams aligned with our unique culture. They want to stay and continue to grow and leverage their business. And that's been a great differentiator for us over not just the last few years, but the last 25 years, as we've executed on our growth strategy.

Stephen Sheldon -- William Blair. -- Analyst

Great. I appreciate the color.

Jay Hennick -- Global Chairman and Chief Executive Officer

Thanks.

Operator

Thank you. Our next question comes from the line of Daryl Young with TD Securities. Your line is open.

Daryl Young -- TD Securities -- Analyst

Good morning, guys.

John Friedrichsen -- Chief Operating Officer

Good morning.

Daryl Young -- TD Securities -- Analyst

First question is on the Colliers Mortgage business. And just a point of clarification, how much of the mortgage origination and loan portfolio would have been stemming from recommendations from Colliers originally? Or is it all kind of the net new and therefore revenue synergy upside?

Jay Hennick -- Global Chairman and Chief Executive Officer

It's early days and that is the fact, it's early days. We have within the Colliers platform, a number of mortgage professionals, that they work hard to find a debt for our clients around the country. They never had the ability to leverage and access an entity like Colliers Mortgage, that has the power of the pen and in particular group of asset class areas. So, the early days have been how do we leverage that, how do we connect and create a flow of business, but it's still early days. The other thing that's very interesting is that Colliers Mortgage and Harrison Street have a lot of alignment as well because Colliers Mortgage has the power of the pen to provide lending capacity to the types of assets that Harrison Street acquirers as well.

So in this acquisition, we went in with two potential leverage opportunities. We've already been successful in both, originating and funding Colliers deals, not a lot yet. And Harrison Street deals, one deal so far, but it's still early days. And the average period between signing a letter of intent or closing a transaction is several months. So we did start a few of them earlier than closing. But I think it will be interesting to see how we develop both over the course of the next six months and beyond.

Daryl Young -- TD Securities -- Analyst

Okay, great. And then just a second question, in terms of the brokerage business, it seems pretty clear that you're taking significant market share through this environment, some of which is likely the enterprising culture. Is there also an element of -- in the Americas, specifically, the secondary markets are outperforming some of the gateway cities or is that maybe just a little color there?

Jay Hennick -- Global Chairman and Chief Executive Officer

So, I would say two things. I would say, given our legacy, we are relative to the top two players in commercial real estate. We've been around the least. So I would say we have the momentum, I would say that the whole industry is watching every move. Just take a look at their press releases and the way they articulated their strategies with compared to ours. But I would say that Colliers has been consistently market leaders in secondary markets for a lot of years, places like Salt Lake City, Nashville, Kansas City, the list goes on, Detroit. These are all -- Pittsburgh, these are markets that are evolving and changing as a result of COVID. And we're seeing -- we're seeing new activity in these markets that we wouldn't have seen historically.

So I think that is -- that is, it's been a very, very positive for us. And the other area is that Colliers has really added lots of technology and a variety of differentiating -- differentiated services to clients in a way that's allowed us to win greater share of business and that has translated as you could see into additional revenue streams, we hope that it continues. And lastly, we are the place of choice for many of the top-flight professionals, especially ones that are on platforms that are in distress right now, and there is two or three that are in distress. And so that's opening up opportunities for us, not just for professionals, but also for leadership, which as those that have followed us for a long period of time, know we always try to start with leaders and have them operate the Colliers way. And we believe that, that is a differentiator for us as well.

Daryl Young -- TD Securities -- Analyst

Okay, excellent. That's all from me. Thanks very much and congrats guys.

John Friedrichsen -- Chief Operating Officer

Thank you.

Operator

Thank you. Our next question comes from the line of Matt Logan with RBC Capital Markets. Your line is open.

Matt Logan -- RBC Capital Markets -- Analyst

Thank you, and good morning.

Jay Hennick -- Global Chairman and Chief Executive Officer

Good morning.

Matt Logan -- RBC Capital Markets -- Analyst

Just following up on some of the questioning previously, in terms of your capital markets and lease brokerage businesses, those are both tracking well ahead of industry figures. Can you talk a little bit about what's driving the gains and market share? Is it simply the differentiation between secondary cities? Is it called -- entrepreneurial culture or are there other factors in terms of technology that's driving that gap?

John Friedrichsen -- Chief Operating Officer

Matt, there's a few things and I think there's one single thing, but there is a focus obviously on trying to improve our share. Jay already outlined, kind of our set up in lot of the US secondary cities, which I think has been a good factor during this current pandemic. We all know what's happened unfortunately to New York, where we also have an operation, but not nearly as significant as some of our other competitors.

We have also been a Company that has been -- over time focus very much again thinking about the US primarily in suburban markets. And suburban markets gain a bit of a new life and a lot of interest, as a result of the pandemic. So we're very, very well positioned. We've also always been a pretty significant player in industrial, which again, various parts of the industrial built environment have been actually growing during this period of time as lot of that -- those properties are repositioned for supply chain uses and other things going forward. So that's a lot of it.

In addition, we've been focused on building our corporate solutions business. And in our industry-leading Colliers 360 technology, which is actually allowed us to generate a lot of business along with the competencies of our team and that has led to additional transaction work that is a long-term build and we're getting incremental compounding impact of that. And it's actually generating a lot of additional activity. So when you put that all together, it's not surprising to see us make the gains we have made.

Matt Logan -- RBC Capital Markets -- Analyst

That's great color. And maybe turning to the recurring piece of your business, without putting a number on, would be -- would it be fair to characterize it as stable to modest growth?

Christian Mayer -- Chief Financial Officer

Yeah, I'd say, on an overall basis, that's true. Certainly, with obviously a couple of pinpoints that are described earlier in project management with delays on some transactions, but generally, yes. It's flat to -- be flat to up.

Matt Logan -- RBC Capital Markets -- Analyst

And when we look out to 2021, you're approaching the 60% mark in terms of your recurring EBITDA. And obviously with a view to grow some of your recent platform acquisitions, how could we see that trending? Will be rebound in brokerage largely offset continued growth in the recurring EBITDA or could we see that 60% figure trend toward, say 65%?

Christian Mayer -- Chief Financial Officer

You know, you are making a couple of interesting observations based on the flow of our business. I would say that for the most part, we're nicely balanced here, you know, would recurring move to 65% of our EBITDA over time, may be, may be 70%, looking out two or three years. But our transactional services, capital markets and leasing are critical, important, essential services and so they will always be part of our mix. And they are at the front of Colliers, they call on clients every single day.

One of the great benefits that I don't think gets enough airtime is, we have 5,000 professionals calling on clients around the world, every day, offering a variety of Colliers' services of any sort whatever the client might need and that army of professionals is very valuable and is a critical part of our long-term strategy. So I don't know how it balances out long-term, but I would say that we're now getting to the point where we feel that the balance is, give or take -- give or take the right balance for Colliers as we see it.

Matt Logan -- RBC Capital Markets -- Analyst

I appreciate that. And maybe taking that one step further, when you think about investments in talent and technology, how would you compare that to the opportunity for just traditional M&A or tuck-under acquisitions, like how big or is there an uptick in the opportunity to invest in talent and technology in the current environment?

John Friedrichsen -- Chief Operating Officer

Yes, absolutely. We're spending some very focused time with our business leaders who ultimately have responsibility for building our capabilities, our people capabilities. And as Jay has indicated earlier, I mean, there is lots of uncertainty generally in the market right now. On top of that, some of the other platforms for a variety of reasons, whether it's potentially perceived instability or may be places that are may be too crowded relative to the amount of business it's available, and the complement of people pursuing that within those businesses, there's a lot of white space as we say at Colliers and we're having success attracting this talent.

We're focused on it. We're not going to do things that don't make sense for us, but we're going to continue to try and attract professionals who can be highly successful within the Colliers global platform, and that goes -- that's really across the world. So we're absolutely on that. Of course, during a time of uncertainty, there is lots of emotions that get -- have to be processed by those that we're talking to, but we've already had some really good success. We're kind of a little bit behind where we wanted to be because of the pandemic, but we are all over this and think there is a tremendous opportunity for Colliers to build our bench over the coming months and into 2021.

Matt Logan -- RBC Capital Markets -- Analyst

Appreciate the color. That's all from me. Thank you very much.

Operator

Thank you. I'm showing no further questions at this time. I would now turn the call back over to management for closing comments.

Jay Hennick -- Global Chairman and Chief Executive Officer

Thank you very much, operator. Thanks everyone for participating in today's call. The fourth quarter is an important quarter for Colliers. Let's hope that we have a strong one and look forward to speaking again in early February. Have a good day.

Operator

[Operator Closing Remarks]

Duration: 59 minutes

Call participants:

Jay Hennick -- Global Chairman and Chief Executive Officer

Christian Mayer -- Chief Financial Officer

John Friedrichsen -- Chief Operating Officer

George Doumet -- Scotiabank -- Analyst

Frederic Bastien -- Raymond James -- Analyst

Stephen MacLeod -- BMO Capital -- Analyst

Stephen Sheldon -- William Blair. -- Analyst

Daryl Young -- TD Securities -- Analyst

Matt Logan -- RBC Capital Markets -- Analyst

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