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DATE

Thursday, July 30, 2026 at 11:00 a.m. ET

CALL PARTICIPANTS

• Global Chairman and Chief Executive Officer - Jay Stewart Hennick
• Chief Financial Officer and Chief Executive of Colliers Commercial Real Estate - Christian Mayer

TAKEAWAYS

• Consolidated Revenues -- $1.6 billion, representing a 16% increase in local currency driven by double-digit growth across all three service platforms.
• Net Revenues -- $1.4 billion, rising 16% compared to the prior year period.
• Adjusted EBITDA -- $205 million, a 14% increase reflecting growth in core service lines.
• Adjusted EPS -- $1.83, rising 6% year over year while being tempered by higher interest expense.
• Capital Markets Revenue -- Growing 23% year over year led by strength in the Americas and Asia Pacific regions and improving financing conditions.
• Leasing Revenue -- Increasing 23% year over year with notable strength in U.S. industrial property activity.
• Engineering Net Revenue -- Rising 27% year over year supported by recent acquisitions and 5% internal organic growth.
• Investment Management Net Revenue -- Increasing 15% year over year due to new capital commitments and recent acquisition activity.
• Recurring Revenue -- Approximately 70% of total earnings now derive from resilient recurring sources, providing increased financial stability.
• Engineering Backlog -- Standing at 12 months of work under contract as of June 30, 2026, indicating visibility for the second half of the year.
• Assets Under Management -- Totaling $110 billion at the close of the quarter following continued platform expansion.
• Capital Distributions -- Returning $1.9 billion to limited partners during the second quarter and $3 billion year to date through asset realizations.
• Fundraising -- Raising $2.2 billion in new capital commitments during the quarter, bringing the 6-month total to nearly $3 billion.
• Fundraising Target -- Reaffirmed at $6 billion to $9 billion for the full year 2026, with an expected acceleration in the second half.
• Leverage Ratio -- Ending the quarter at 2.8x following the completion of the Ayesa acquisition, with a target to delever to 2.3x by year-end.
• Engineering Net Margin -- 14.5%, up slightly from the previous year despite seasonal utilization factors.
• Investment Management Net Margin -- 36.5%, reflecting planned costs associated with building out the global Harrison Street platform.
• Margin Outlook -- Management expects Investment Management margins to stabilize in the low 40% range starting in 2027.
• Ayesa Acquisition -- Adding more than 3,300 professionals to the engineering segment and expanding operations into 23 countries.
• Data Center Investments -- More than $6 billion deployed into digital and data center assets over the past 6 years through the Harrison Street business.
• Share Buyback Potential -- Management indicated a potential $100 million deployment toward stock buybacks, which would represent approximately 2.1% of the float.
• Industrial Sector Performance -- Significant demand in U.S. industrial leasing and property sales, partially benefiting from easier year-over-year comparisons.
• Q3 Revenue Guidance -- Management projects Capital Markets revenue to grow approximately 15% and Leasing revenue to grow in the mid-single-digit range.
• Producer Recruiting -- Disciplined addition of more producers on a percentage basis than U.S. peers, intended to capture future market share.
• Internal Growth -- Engineering internal growth maintained at 5% year to date with similar expectations for the remainder of the year.

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RISKS

• Mayer stated, "Geopolitical risk and macroeconomic volatility continue to be elevated as we all know," noting potential external factors that could influence market activity levels.
• Mayer noted that the aggressive recruitment of new producers "has been a modest drag on our margins over the last few quarters" as those personnel ramp up to full productivity.

SUMMARY

Management for **Colliers International Group Inc.** (CIGI -1.80%) highlighted the integration of its three global platforms: Commercial Real Estate, Engineering, and Investment Management. The company reported that 70% of earnings are now generated from recurring revenue streams, enhancing its overall financial resilience. CFO Christian Mayer reaffirmed the full-year 2026 financial outlook, citing a broader recovery in capital markets and leasing activities despite elevated interest rates and macroeconomic volatility. Strategic efforts are currently focused on completing the global build-out of the Harrison Street Asset Management brand and integrating the recently acquired Ayesa engineering business.

• CEO Hennick reported that technological advancements like AI have influenced M&A dynamics, stating, "we are adjusting down the purchase prices" for smaller targets as the company leverages its capital to implement advanced technology across its larger platform.
• The company is marketing several proven fund strategies, including Harrison Street X and Basalt V, as it attempts to streamline global capital distribution under the Harrison Street banner.
• Hennick described a specialized end-to-end service strategy for data centers where the company handles site acquisition, engineering design, and capital deployment through its various platforms.
• Management noted that the Ayesa acquisition softens the historical seasonality of the engineering business due to its geographic presence in markets with more stable year-round climates.
• CFO Mayer indicated that the company intends to deleverage significantly in the second half of 2026, prioritizing seasonal cash flow to move from the current 2.8x leverage toward a 2.3x target.
• Hennick noted that while all partners in the investment management strategies had the option to remain independent, all chose to roll their equity into the unified Harrison Street Asset Management platform.

INDUSTRY GLOSSARY

• AUM: Assets Under Management, representing the total market value of the investments that a person or entity manages on behalf of clients.
• EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization, a measure of a company's overall financial performance.
• Fee-bearing capital: Assets under management that generate ongoing management fees for the investment manager.
• LPs: Limited Partners, the outside investors who provide capital for private equity or real estate funds but have limited liability and no management role.
• NCIB: Normal Course Issuer Bid, a Canadian term for a stock buyback program where a company repurchases its own shares on the open market.
• Desalination: An engineering specialty involving the removal of mineral components from saline water to create water suitable for human consumption or irrigation.

Full Conference Call Transcript

Operator: Welcome to the Colliers International Second 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 cause 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 U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded.

Today is Thursday, July 30, 2026. 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, mister Jay Stewart Hennick. Please go ahead, sir.

Jay Stewart Hennick: Thank you, operator, and good morning. I am Jay Stewart Hennick, global chairman and chief executive officer of Colliers. Joining me today is Christian Mayer, our chief financial officer and chief executive of Colliers Commercial Real Estate. Today's webcast and presentation materials are available on the investor relations section of our website. Colliers delivered another strong quarter with double-digit revenue growth across all three platforms. Healthy internal growth, and continued improvement in earnings quality. In commercial real estate, we are seeing a broader recovery across our markets. Capital markets and leasing revenues each increased by more than 20% supported by improving transaction activity, better financing conditions, and market share gains in most of our major markets.

Engineering continues to be an important strategic differentiator for Colliers. Revenue increased 30% driven by strong demand across critical infrastructure, transportation, water, property, and buildings. The acquisition of Ayesa expanded our global capabilities and strengthened our position across Europe, Latin America, the Middle East, and Australia. Engineering gives Colliers recurring revenue, stronger visibility, and new ways to grow our enterprise. Harrison Street continued to add strength and differentiation as well with assets under management reaching $110 billion and revenues increasing by 17%. Having built two large global platforms at Colliers, in commercial real estate and engineering, we are now building our third. We are bringing our investment management capabilities together across real estate, credit, infrastructure, and private wealth.

We are creating more investment opportunities for our clients, and greater long-term value for our shareholders. Together, the recovery in commercial real estate, the growth of engineering, and the expansion of our Harrison Street business are changing the quality and composition of our earnings. Today, approximately 70% of our earnings come from resilient recurring revenue streams giving Colliers greater flexibility, greater stability, stronger cash flow, and perhaps most importantly, more ways to grow our business. What further differentiates Colliers is how our platforms are working together. Commercial real estate gives us market intelligence and deep client relationships. Engineering adds technical expertise and execution capability. Harrison Street brings capital formation, investment discipline, and ownership expertise.

Together, they create a much more integrated Colliers, one that can engage clients earlier, serve more of the value chain, and replicate that model across high-growth ecosystems. Data centers are just 1 example. We can help clients identify and acquire sites, provide engineering and technical services to design, build, and operate these facilities, and deploy capital through Harrison Street, which over the past six years has invested more than $6 billion in digital and data centers already. And after the fact, we can deliver leasing, sales, facility management, and other advisory services as those facilities come on stream. That same opportunity exists across many other ecosystems within our business.

By combining client relationships with specialized platform capabilities, we can create additional avenues for growth beyond the stand-alone opportunities inherent in each of our businesses. So in summary, our second quarter results reinforce the confidence that we have in our future. Step by step, we are building Colliers into a stronger global company with broader capabilities, more resilient in our performance, and better positioned to create lasting value for our clients, our professionals, and our shareholders. Now let me turn things over to Christian to review our financial results in more detail. Christian?

Christian Mayer: Thank you, Jay, and good morning, everyone. Please note that the non-GAAP measures discussed on this call are defined in our press release and quarterly presentation. Unless otherwise noted, all revenue growth figures are presented in local currency. Our second quarter consolidated revenues were $1.6 billion, up 16% and net revenues also increased 16% to $1.4 billion. Adjusted EBITDA was $205 million, up 14%. Adjusted EPS increased 6% to $1.83 and was tempered by higher interest expense. These results met our expectations and our momentum gives us confidence as we enter the second half of the year. Capital markets rose 23% with growth across all geographies led by the Americas and Asia Pacific.

Activity in industrial property sales was up notably in all geographies. Leasing revenues were also up 23% led by US industrial, with all global regions contributing to growth The segment net margin was 11.9% up slightly over the prior year. Engineering second quarter net revenue was up 27% from a mix of recent acquisitions including a partial quarter of Ayesa, and solid 5% internal growth. Our net margin was 14.5% up slightly over last year. Our engineering backlog stood at 12 months as of June 30, indicating strong momentum for the back half of the year. Investment management net revenues increased 15% driven by a recent acquisition and internal growth from new capital.

The net margin was 36.5%, as expected, given ongoing planned global platform building under the Harrison Street Asset Management brand. These costs will continue to impact margins for the second half of the year. And we expect margins to stabilize in the low 40% range for 2027. During the quarter, asset realizations generated strong gains and resulted in the return of $1.9 billion of capital to our limited partners. and $3 billion year-to-date. Our demonstrated ability to monetize high-quality portfolios at attractive prices and make meaningful distributions to investors, has always been a key differentiator for us. We raised $2.2 billion in new capital commitments in the second quarter and just under $3 billion for the 6-month period.

To date fundraising is on plan and we expect an acceleration in the second half. Our annual fundraising target for 2026 remains unchanged at $6 billion to $9 billion. Turning to our balance sheet. We completed the Ayesa acquisition late in the quarter, and despite significant capital deployment, for this strategic platform, finished the second quarter with leverage of 2.8x. We expect to delever significantly in the second half of the year as the majority of our seasonal cash flows come in and should finish the year in the 2.3x range.

Given this leverage profile, and given the current undervaluation, of our shares, we may choose to deploy capital on a stock buyback as we progress through the second half of the year We are reaffirming our full-year 2026 outlook. The key forward-looking indicators across our business segments being transaction pipelines, engineering backlogs, and fundraising pipelines, are up nicely over the prior year. Geopolitical risk and macroeconomic volatility continue to be elevated as we all know However, we believe that these risks should not materially impact our overall results. That concludes my prepared remarks. Operator, can you please open the line for questions?

Operator: We will now begin our Q&A. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from the line of Himanshu Gupta with Scotiabank. Himanshu, your line is open. Please go ahead.

Himanshu Gupta: Thank you, and good morning, everyone. So first on commercial real estate, looks like industrial was strong, for leasing. Industrial was strong for capital markets as well in Q2. So just wondering what led to the strength and how do you see momentum in Q3?

Christian Mayer: Yeah. Thanks, Himanshu. So, industrial is one of our key, historical strength areas, and it continues to be the case. And in the quarter, we saw strong demand in the Americas in the U.S. in particular. And that was, I think, partially a reflection of some uncertainty that happened last year, post-Liberation Day. Which was in the second quarter last year. So an easier comparison led to some stronger growth in that area. As we look ahead, momentum is strong, but we do have some tougher comps ahead in the third quarter.

Himanshu Gupta: Okay. And overall, how do you see, Leasing revenue or capital markets in Q3?

Christian Mayer: Yeah. We expect leasing revenues to be up in the mid-single-digit range and capital markets to be, again, strong, 15% or thereabouts year over year growth.

Himanshu Gupta: Got it. Okay. Thank you. And then just moving to investment management, especially the margins. Is the I mean, the recovery pickup in margins getting pushed to the next year? And not likely to be in Q4. So maybe anything on the margin side.

Christian Mayer: Yeah. I mentioned, as Jay mentioned, we are building a global investment management platform with Harrison Street. And we have taken additional integration steps this year, including RoundShield rebranding and integrating with our Harrison Street Europe business, which announced just a few weeks ago. So taking our time to integrate this business and build it for the future. And that will impact the margins here for the remainder of the year. We expect the margin profile to increase in 2027, as I mentioned in my prepared remarks. To the low-40s range.

Himanshu Gupta: Thank you. And maybe just last question. I think over $2 billion was raised during the quarter. Has this capital been deployed? I am just trying to see that when this raise will lead to EBITDA pickup in numbers.

Christian Mayer: Yeah. So we did raise $2.2 billion of new capital in the second quarter. That capital comes from a mix of fund types. So Some of the closed-end funds, that capital becomes fee-bearing immediately. And in other fund types, it will take some time to deploy that capital and then that capital will at that point become fee-bearing. So this is a normal part of the fundraising process. Some capital, as I mentioned, becomes fee-bearing immediately, some takes time to be deployed. And then become fee-bearing, but that is reflected in our expectations, for the year.

Himanshu Gupta: Thank you so much, and I will turn it back. Thank you.

Operator: Your next question comes from the line of Stephen Sheldon with William Blair. Stephen, your line is open. Please go ahead.

Stephen Sheldon: Hey. Thanks. I wanted to start on the engineering side just curious if you can talk a little bit more about how internal organic growth there has been trending in the first half of the year and then how you are thinking about it in the back half and potentially in the early next year. And then also, I really appreciate the color, Jay, on how engineering ties into the rest of all your businesses. I think that has been an area of focus for the buy-side, how much, you know, cross-selling opportunities there are between engineering and kind of the core CRE business.

So just curious, yeah, do you think it will take some time for some of the cross-selling opportunities to be realized, or are you already starting to see some of those come in? So, yeah, but just a little more color on engineering.

Christian Mayer: Great. Good question. I will take the margin question. Our year-to-date sorry, our internal growth question on engineering. Year to date, internal growth in engineering is 5%. And we expect that to continue for the remainder of the year. Then I will pass the question on the cross-sell opportunity in engineering to Jay.

Jay Stewart Hennick: You know, Stephen, it is it is frustrating for me because we have not been able to articulate the full power of the differentiation that we are trying to create at Colliers. The engineering platform is not good. It is awesome. And if you think about it and I tried to give you an example in my prepared remarks, if you think about it, all the work done in much of and it is not just data centers. it is in all ecosystems, whether you are building a building, you are building any asset. We are designing. We are building. We are project managing. All through our engineering business.

So the connectivity between the different platforms, which for almost since inception, I do not think people really understood because they saw commercial real estate as a stand-alone platform, engineering, and Harrison Street, all as three stand-alone platforms, when they are actually working together more and more clients, the same clients are retaining us to do more and more along the whole value chain. And now with Ayesa, and opening up markets where we did not really we had huge presence in commercial real estate across Europe, The Middle East, and Australia. But we did not truly have any engineering presence. Now with Ayesa, which already is doing business with both our commercial real estate and our investment management business.

They are pitching business together sort of a complete end-to-end solution. So, we think that over the next couple of years, being able to handle the entire life cycle of assets will create a differentiator for Colliers that none of the other peers have. Some of them have bits and pieces of it, but we think that we have a truly strategic differentiated plan that is, bearing fruit, and it is these are global. These are global platforms. And they are global platforms run by people who have a vested interest, equity stakes in our businesses through our partnership philosophy and that creates huge glue and huge collaboration, desire from each of the partners to work with the others.

So it is a bit of a frustration for me because we have not been able to articulate the power of the three different platforms working together, and we are going to dial up our efforts to do that over the next number of quarters until that finally hits home.

Stephen Sheldon: that is great to hear. Very, very helpful. Commentary, Jay. And then just as a follow-up, I guess, two questions in investment management. One, it seemed like management fees as a percentage of AUM stepped up nicely this quarter. So just curious what drove that and whether that is something structural and that can keep moving higher from here. And then two, am I right to think that it could get easier for fundraising activity? I know It has been a challenging couple of years, but you know, as capital market activity picks up and as institutional LPs start to see more capital distributions, does that make it easier to go back and raise more money?

Jay Stewart Hennick: Yes. I mean, 1 of the key, again, we are building a global platform with Harrison Street. That means bringing together all of our unique strategies that we had around the world, as you know, Stephen, you have been following us for a long time. We built this platform one step at a time since 2018, and we built it through four acquisitions of very good operators who had a vested interest in their strategies. And now we are bringing together—we are bringing them all under the Harrison Street banner on a global basis. We are taking distribution that it was it was previously done across the different platforms. We are we are standardizing them.

There are so many aspects that we are doing, and that is putting us in a different category in terms of fundraising. So all of our 45 people that are in capital distribution are in front of clients, and the clients are making the decision on which strategies are more interesting to them. And so, in the case of our proven funds, Harrison Street X is in the market right now. Basalt V is in the market right now. There are a variety of strategies that have stood the test of time over a long period of time but there is also new strategies that have been introduced. That our investors are saying, tell me more about that.

And if you do not do that in a streamlined way, you are missing a great way to leverage relationships that, you know, the Harrison Street core business would have with some LPs and now Basalt can leverage those strong relationships and introduce them to mid-market infrastructure deals that they are also interested in. So building a platform takes time. It takes expense. It takes bringing together teams. We are very, very, very pleased with the results. All of the partners and, again, I emphasize as you know, our philosophy has always been around perpetual partnerships. All of our partners in each of the strategies had the choice of staying by themselves or rolling up into Harrison Street Asset Management.

And to a professional, They all rolled up and together, they own circa 25% of the equity of this very valuable platform and doing what we are doing is only making it much more valuable.

Stephen Sheldon: Makes a lot of sense. Thank you.

Operator: Your next question comes from the line of Erin Kyle with CIBC Capital Markets. Erin, your line is open. Please go ahead.

Erin Kyle: Himanshu. Good morning. Thanks for taking the questions. Maybe going back to the engineering segment on the margin side. So the prior two quarters had seen some margin contraction on lower utilization that you had called out in the past. And then we saw net margins expand year over year. This quarter. So the question is, is utilization back up where you expect it to be? And are there any other productivity metrics or anything you can point to in the engineering segment?

Christian Mayer: Yeah. Erin, the margin in engineering business will vary on a quarterly basis because there is seasonality in our business. As you are aware, we operate in Canada and the Northern parts of the U.S. where winter is a significant factor in driving revenue levels as well as utilization levels. You know, in the past few quarters, we have called out some utilization areas in certain end markets and that is always going to be a factor in our business. And for that reason we have a multidisciplined diversified business with multiple end markets and multiple client types. And also a diversity of clients between public and private sector. So nothing really major to call out this quarter.

The Ayesa acquisition, as you know, has higher margins. So that is going to impact the margin profile a little bit in the back half of the year as we bring that business on stream.

Jay Stewart Hennick: And the only thing I would add to that, Christian, is Ayesa also softens the seasonality and creates more geographic diversification into markets with different climates. Its seasonality is almost nonexistent. It generates, you know, 24% to 26% of its revenues and EBITDA in any given quarter. Given the markets that it operates in. And without the weather-related seasonality.

Erin Kyle: Okay. So that is helpful. On a go-forward basis. Maybe in 2027, we see a little bit less of that quarter-to-quarter variability there.

Christian Mayer: Yes.

Erin Kyle: Maybe if I switch gears to the commercial real estate segment. Growth has been quite strong for the past two quarters. In capital markets and leasing this quarter as well. that is despite of an interest rate environment that has not necessarily been as constructive as everyone was expecting maybe heading into the year. So would you say that is mainly a function of, like, pent-up demand in the market? Or is Colliers winning share here? As I know you have been recruiting for new team members across the CRE segment as well?

Christian Mayer: Erin, we certainly believe all that is the case. We have been winning market share. And in particular, in terms of our recruiting efforts, I think we have been very disciplined but yet aggressive on recruiting. And we have added more producers than others. I think relative to our publicly traded peers in The U. S. At least, we have added more producers on a percentage basis than they have and I think that is starting to show in our numbers and it has been a modest drag on our margins over the last few quarters as we ramp these folks up.

So we are feeling very good about our business and, like, both the trajectory and the rate environment, of course, is 1 that is top of mind for real estate investors. I think as long as it is in a range activity levels will continue and those ranges are fairly wide. And as long as geopolitical events continue to be under a reasonable level, we should see strong activity through the balance of the year.

Erin Kyle: Thank you. that is helpful. I will pass the line.

Operator: Your next question comes from the line of Jimmy Shan with RBC Capital Market. Jimmy, your line is open. Please go ahead.

Jimmy Shan: You mentioned share buybacks. So I guess with the stock trading where it is, how are you prioritizing between share buyback versus the tuck-in M&A? should we be doing, especially as leverage comes down. And then at what leverage level do you feel comfortable accelerating either?

Jay Stewart Hennick: Well, obviously, stock buybacks have been top of mind for us. As you know, some of the senior executives here have been buying significant amounts of stock in the company. But we did not believe that it would be prudent for us to be using our normal course issuer bid to be buying back stock in light of the significant Ayesa transaction, which is now completed. As Christian mentioned, the-- the leverage of, expected something around 3.0x at the time. At the time we contracted for that transaction, it has come in at 2.8x, which is positive. And you can see our cash flow conversion is very significant.

So as we approach the balance of the year, we expect our leverage to fall, and that will open up and let me finish the point. It will open up, and we will be able to consider using our issuer bid to acquire additional shares, particularly where they are currently trading. You know, the other thing is that acquisitions continue to be abundant for us. And, there is lots of opportunity, not just with Ayesa, which opens up all kinds of new markets, all kinds of adjacencies, different additional qualifications that help not only the Ayesa business, but can be transferred to our other businesses So we do not want to slow down our acquisition activity at the same time.

So we always, you know, even if there is a difference, a current difference, you know, where Colliers is trading versus buying an exceptional business that will pay dividends over a long period of time. We will always default to a great acquisition. it is something that we will add to us as we have done for 30 years. So I hope that gives you a little bit more color around our thinking on the issuer bid.

Jimmy Shan: Yep. No. that is helpful. Maybe just as a follow-up, you have still been acquiring, obviously, the last few acquisitions have been on the engineering side. I guess with the uncertainty, with respect to how AI can potentially impact the business, at least from a public market perspective. I wondered if there was if you have-- if there is been any change in the multiples that you have observed that people are paying for engineering firms? Or how would you underwrite if at all, any AI risk when you underwrite those businesses?

Jay Stewart Hennick: Well, I can give you my professional response. Or I can tell you the way it is. Based on my experience. And so I am just going to do what I always do and tell you the way it is. Look. Technology, and AI will always be, you know, they are always an important-- an important element, but everybody woke up last week, and all of a sudden AI is a fancy word. For years, we have been using technology to automate workflows and get productivity gains and take our specialized data and create special insights and unique insights for our clients.

And 1 of the things that we have done in light of the in light of the additional focus on AI is we tasked our people to create a shopping list of ideas and opportunities that can improve our business further using AI. And there were several interesting ones, and we have increased our technology spend against the highest priority initiatives. So AI has actually become a benefit in the sense that it has raised it has raised the focus around making changes to our business to become more competitive, and unlock some embedded datasets that we might have.

But, really, at the end of the day, it is not about all of that. it is about it is about professional judgment, specialized expertise, and trusted relationships which do not change. When I think about both commercial real estate and I think about engineering, I think that they are going to only get better and more efficient. But the most important thing, which you alluded to in your first sentence, is yes, we are adjusting down the purchase prices. Arguing that AI is going to have a major impact on some of these businesses which it will not.

And I say it will not to the big players because we are in the game, and doing what we need to do. The small guys do not have the depth and capital to capitalize on these things. But the bigger guys do. And I think AI will only help us make our business better, but the smaller guys do not have those advantages. And as a result, we could be buying and are buying exceptional businesses, albeit smaller, at better valuations this year than last year, for example, for that reason.

Jimmy Shan: Okay. Appreciate the comment. Thanks.

Operator: I will now take this time to remind analysts that if you would like to ask a question, please press 1. Your next question comes from the line of Daryl Young with Stifel. Daryl, your line is open. Please go ahead.

Daryl Young: Hey. Good morning, everyone. First question is just around the real estate services and outsourcing activity. Given the strength in transaction activity, I might have expected to see a little bit stronger performance in outsourcing advisory. Is there something specific you can speak to on the Europe and Asia weakness you highlighted?

Christian Mayer: Yeah. I mean, the only real challenge we have in our outsourcing business right now is the local project management in those two markets. And there is some timing of projects, which I think we will start to see those come through in the fourth quarter of this year. The other parts of the business property management, valuation, loan servicing, all up nicely. In the second quarter, and we expect that to continue through the balance of the year.

Daryl Young: Got it. And then just quickly on the data center theme, one of your peers provided outlook for some pretty exceptional long-term growth and revenue targets and I know you have referenced data centers in the past as just another asset class that you are capable of servicing, but there does seem to be some pretty significant early mover wins in that sector. So is there a more formalized strategy that you are taking or that is evolving in the background around data centers for Colliers?

Jay Stewart Hennick: You know, the short answer is that we in each of our businesses, are focusing very closely on the growth in data centers that we believe we are getting a strong share, whether it is in engineering, obviously, Harrison Street owns $6 billion worth of these centers, which gives us natural connectivity to be doing business there. We have not developed, as you are suggesting, a uniform strategy across all platforms yet. I presume we will over time. what is happening is that there is lots of growth. And so, for example, if we are doing data center work for a client in engineering, and that client goes and does a separate data center, we generally get the first call.

So there is a great opportunity for us to take more share from that particular client in a different geographic region, and we are seeing quite a bit of that, which is exciting to see. But I would say, if I am being candid, we are very busy with data centers right now, and so it is difficult to get everybody together and say, let's create a uniform strategy when they are just trying to even see the internal growth in engineering is quite strong. And we expect it to get a little stronger. And 1 of those areas is data centers. So Got it.

Daryl Young: Okay. And just 1 last one. On the NCIB, did you say you would be willing to take the leverage back to 3.0x in the back half of the year to get aggressive on the NCIB? Or did I mishear that?

Christian Mayer: Daryl, to be very clear, we did not say that. In my view, you know, 2.8x is the high-water mark. We are going to delever through the balance of the year. And we may at these prevailing prices, spend you know, call it, say just for arguments, discussion sake here, $100 million would buy back 2.1% of our float. So it could be nicely accretive without being meaningfully impactful on our leverage. And certainly, do not expect to have a material increase to our leverage. As a result of a stock-buyback action.

Jay Stewart Hennick: It really depends on the M&A opportunities as well. Because we do have quite a pipeline of deals. And we will have to see how the balance of the year shakes out before we before we execute on that.

Daryl Young: Got it. Thanks for that guys, and congrats on a good quarter. Thanks.

Operator: Thank you. Your next question comes from the line of Mitch Germain with Citizens Bank. Mitch, your line is now open. Please go ahead.

Mitch Germain: Thank you. Jay, while I recognize engineering and investment management are very nuanced and differentiated, Is there a thought around having, I guess, Ayesa, Englobe, and other of your key executives coming up with maybe maintaining their existing brands, but coming up with some sort of unified strategy around that business line.

Jay Stewart Hennick: Around which business line?

Mitch Germain: Engineering. Engineering.

Jay Stewart Hennick: Sorry, did you say anything? I do not really understand your question. You wanna give it to me again?

Mitch Germain: Well, I mean, you have got I understand that the individual brands have a lot of value. But, you know, obviously, you know, you have certain potential cost savings initiatives that you can deliver if you kind of unify some maybe back office or other sort of functionality. And maybe best-in-class practices that they can be sharing in their individual, competencies. So is there any thought around, you know, kind of making sure that you can leverage that knowledge and capability and be able to spread it on a more global basis?

Jay Stewart Hennick: Well, they are doing that today. I mean, remember, all technology is run centrally. Each of the divisions have their own technology infrastructure, but it is all within the overall, Colliers structure. The same thing with a number of other shared services. But on the business front, what we are finding is that the engineering businesses in the different geographic regions are working closely with the, primarily commercial real estate and investment management or the investment professionals within the investment management business to see about bringing together a complete solution for clients. And they are doing that right now. I would say It is still early days to have a much more formalized approach.

But anything internally around how do we rationalize, simplify, is there a way to create additional efficiencies, bring down data costs across the organization, that has all been something that we have been doing for years across Colliers, so that is happening. But the new business connectivity is becoming more interesting because, as I said earlier, the client relationships if you have got a strong relationship with Costco, you know, in one part of the U.S. and they are building a data center or a building, and it applies not just to data centers, but all kinds of other ecosystems.

They are building something else in other parts of the country, it brings the two opportunities together very nicely, and it is it is spreading business around. So, I would say nothing is formalized yet. I think we need another year or 2 of, of really capitalizing on some of the business opportunities we are getting. And seeing how everybody naturally comes together but we are capitalizing on. I would say the easier things, which is the internal cost structures and ways in which we can become more efficient.

Mitch Germain: Gotcha. that is super helpful. And then I remind me what you guys are viewing as more of a long-term leverage target. I think you are back in 2024, you are around 2.0x. it is come up with a bunch of acquisitions. I know that you are forecasting it to come down a bit by year end. But, you know, kinda longer term, is there some sort of range that you consider to be, you know, kind of what you are striving to target?

Christian Mayer: Yes, Mitch. Our target leverage range is 1.5x to 2.0x. With a bump out for significant acquisition activity, which Ayesa certainly falls in that category. Or unusually low share values where we can we can capitalize.

Mitch Germain: Thank you. I appreciate it.

Operator: Your next question comes from the line of Frederic Bastien with Raymond James. Frederic, your line is now open. Please go ahead.

Frederic Bastien: Good morning, guys. It is still early days for Ayesa under the Colliers fold, but are there any early surprises, positive or negative, that you can share?

Jay Stewart Hennick: It has been a very positive experience so far. We found the team very excited about becoming partners finally in the business. They are now real equity partners in the business. They had not had that opportunity under the prior ownership structure. They are very engaged internally in their growth as well as with our commercial real estate folks and our other engineering folks around the world to explore opportunities to work together and to build the business. So It has been a very positive first couple of months and we look forward to building our relationship more deeply with that team. And, as you know—sorry, Frederic.

As you know, you know, these deals generally take a year or a year and a half to you know, come to fruition. So we have had a long time to work with the team and better understand what their motivations are and where their opportunities are that they could not pursue under the previous ownership structure. So, that has been that has been quite exciting. They are exceptional operators. But I think I could be wrong, but I think since 1966 when the company was founded, they made one acquisition in Australia. So and that one acquisition was a company that our team looked at also in Australia, and it was relatively recent.

So there is an opportunity to bring those two together But, you know, the bigger point is there is lots of opportunity within their existing markets with relationships that they have had for years and years and years that we think that we can capitalize on with this great team over the coming years.

Frederic Bastien: Great. And just building on that, are there any specific areas of expertise or capabilities within the business, within Ayesa that you are particularly excited about? To potentially cross-sell across the broader Colliers platform.

Jay Stewart Hennick: Yeah. I mean, they have a very strong expertise in desalination. I think they run-- I do not know the number. it is something between 6 and 10 large desalination plants. They designed them. They built them. They operate them in The Middle East. using technology, I believe that they that they were able to gain from Israel. And that is an interesting area for them. And they have some marine engineering expertise which we and water, which we think that we can transfer to other markets. So you know, each engineering platform, as you-- in other companies, as you know better than most, have lots of different expertise.

But you know, I think Ayesa brings 2 or 3 more that we can transfer hopefully, easily to our other businesses.

Frederic Bastien: Perfect. Thanks. that is all I have.

Operator: Your next question comes from the line of Stephen MacLeod with BMO Capital Markets. Stephen, your line is now open. Please go ahead.

Stephen MacLeod: Thank you. Good morning, guys. And lots of great color so far on the call, so thank you. Specifically around some of the cross-selling opportunities Nice to hear about the long-term opportunities. I just wanted to focus in just a little bit of you talked in your prepared remarks about having very strong back half visibility into all three segments. And I am just curious sort of what the foundation of that is. I mean, maybe starting with CRE, what are your customers saying about the rate environment? And then in engineering, you talked about having a 12-month backlog. And I am just curious how that is trended relative to prior quarters.

Christian Mayer: So we track our pipeline in commercial real estate in a very disciplined manner. We have been doing this for a long time, and it is something that is a key part of what we do every day and how we manage the business every day. We certainly look at the 10-year Treasury as a bellwether for the U.S.. particularly at 4.7%. it is kind of on the high end, but it moves around, as you know. So, you know, in with the information we have and with our best judgment, you know, we see a strong list of transactions that will happen over the next year.

And we have more visibility into the more near term transactions being the ones in the next quarter or the next 6 months. And as a result, that gives us the confidence we are looking for. In terms of our backlogs, in engineering, we have really four engineering businesses that operate around the world. Ayesa being the newest. You know, each one has a wide variety of clients and end markets. And each one tracks its revenue backlogs. Our goal always is to have a 12-month backlog of work under contract. And that is where we currently sit. So, you know, that can vary, you know, a little bit. Seasonally.

And but certainly right now where we sit is very comfortable. And, we have, the visibility we need from that backlog to give you the outlook that we delivered.

Stephen MacLeod: that is great. Thanks, Christian. And I know we are talking a little bit about sort of leverage in the balance between that and buybacks. But you know, you are a very long-term thinker. So when we get to 2027 and you think about the acquisition opportunities beginning to or the opportunity for you to be able to deploy capital for acquisitions in a in a more meaningful way. Can you just give a bit of color around sort of what you see as your next top priorities?

Jay Stewart Hennick: Yeah. I mean, our near-term top priority is to complete the build out of Harrison Street Asset Management as a global player. If anyone that follows the asset management business will see that Harrison Street is among one of the bigger players in the sort of the next, you know, the next tier you know, below the obvious big guys. there is lots of opportunity for us to continue to consolidate that business there is a lot of opportunity to raise additional capital You know, the early talk for 2027 and beyond is higher than what we are talking about today. Primarily because there is more strategies and more opportunity.

So, in short, in a-- you know, just to just to summarize, I think our near-term focus is to finish the job at Harrison Street, bringing it all together in a streamlined way. We as Christian alluded to, we actually accelerated a few steps in the integration process over the past quarter because we thought there was a great opportunity to do it. In Europe. You know, the round 1 was to bring it all together in the U.S. which is largely done. Round 2 is Europe. And, you know, Round 3 is an expansion into Australia, New Zealand, which we are already on the ground. And looking for opportunity down there as well.

And then and then where do we go from here? Base business is strong. We are focused in the right areas. Some of our peers are in traditional real estate assets. We have a very small component of our business in traditional real estate. We are focused on alternate real estate in infrastructure, debt, things like that. So we like the categories that we are in, but there is lots of opportunity for us to consolidate, bring other exceptional strategies into the fold. So I would say there is that. Engineering continues to be a growth engine.

And even in commercial real estate, there is some interesting opportunities to strengthen our debt origination business, create opportunities to enhance our access to capital flows, to fund some of our professionals' origination. So there is just a lot happening, and that is 1 of the great things of having a global platform now in 3 different areas. We can grow globally. We can grow by service line. We have a much more resilient revenue stream than any of the others do, by quite a bit.

And, and so we are really building a highly diversified, resilient business you know, the way that we have done it for so many years to create long-term value for our shareholders, the largest of which are the people that run the business day-to-day.

Stephen MacLeod: that is great. Thanks, Jay. Thanks, Christian. Appreciate the color. Thanks.

Operator: We have reached the end of our Q&A session. I will now pass the call back to mister Jay Stewart Hennick for some closing remarks.

Jay Stewart Hennick: Thank you, everyone, for participating. And we look forward to speaking again at the end of the third quarter. So thank you.

Operator: Ladies and gentlemen, this concludes the conference call. Thank you for your participation and have a nice day.