Third Bridge专家访谈称世邦魏理仕竞品中戴德梁行数据中心与AI投入受资本约束

[[00:02:16]]
How are you seeing Cushman & Wakefield's market position and demand for its services across leasing, capital markets and valuation?

[[00:02:28]]
Strong. I think that Cushman has done a very good job positioning itself. It started out, obviously, the company, the new Cushman & Wakefield was really launched in 2018 when it went public or went public in 2019. I think Cushman has done an excellent job building the capital markets, valuation advisory, leasing, structured finance and their PDS business. I also think that it's important to look at it in context, which is that the merger for Cushman & Wakefield added a significant amount of debt more so by comparison to its peers to JLL, CBRE, Newmark. It had that debt dynamic. Then, the fact that COVID hit in 2020, so soon after the formation of the new company, it diminished the free cash flow available to invest in critical parts of the business.

[[00:03:47]]
With the past headwinds, do you see Cushman & Wakefield in a better position now to catch up to some of its competitors? How do you see the company catching up, given the kind of headwinds that it saw?

[[00:04:06]]
Yes. I think Cushman's integrated model of capital markets, asset services, PDS is somewhat of a unique dynamic. I had worked at some of the other competitors that weren't as integrated. When clients hear from a team that has all of the perspectives, it's just a better solution that Cushman provides and because of that, they are really strong on the investor side of the business. On the tenant rep side of the business, they have in certain locations, a significant part of the actual transaction volume. In other parts of the country, not as much, and that's dependent on how much good talent they have in that market. Then also, Cushman has a decent book of business, a strong book of business on their portfolio and corporate advisory type of accounts. I was not involved at all in the IFM business so I know that there's just a lot of questions about that, but I'm not going to be able to answer those questions. That's a separate part of the company. I would say capital markets, investor advisory, very strong because it's integrated. They do something a little different than the peers. On the tenant rep, it's based on the value of the individuals in that market, which puts a lot of demand on growing with great talent in markets that it's expensive to buy or grow that great talent.

[[00:06:02]]
How much of a differentiator is Cushman & Wakefield's more integrated model? How do you see the company's ability to leverage it with expanding relationships and expanding the strength across the verticals?

[[00:06:20]]
I think it's very significant. In certain locations throughout the country, if Cushman is asked to present or pitch to a client for a capital markets assignment, in certain locations, even though the seller might have their own asset services or property management department, Cushman will still bring theirs into the pitch because even if they don't ever get hired, the insights that Cushman has creates the value in the overall assignment or create some of the value on how you're operating the business. There's been certainly cases where even though the seller isn't going to hire Asset Services, Asset Services has been positioned very well with the new buyer if the buyer doesn't self-perform. The integrated model works well at Cushman & Wakefield. They don't have all of the deep-rooted, decades-long bureaucratic structure that others might have. That, I think, is one of the secret sauces of Cushman, is to keep it nimble and fresh and integrated because the clients get great value there and really good insight.

[[00:07:44]]
Where do you see Cushman & Wakefield's strengths and weaknesses from a region perspective? Do you see its more integrated model performing better in certain areas than others?

[[00:08:04]]
I do. There are cities that took a really long time to build asset services. I think of Chicago. Chicago always had really good capital markets and strong leasing, and strong leasing in not just office, but in industrial and retail, and they've always had a good strength there. It took Cushman a really long time to find the right solution for an Asset Services leader, and who then went and built an Asset Services team, so then they could get out and get Asset Services business. It didn't work as well in Chicago until they were able to find the right solution and invest the right money in building that. In cities like Miami, it's just much more leaning on the tenant rep business and the capital markets is quite good. Structured finance is quite good, but they don't have the right model yet because of talent, lack of availability. They don't have the right model on asset services, so it doesn't work as well. In cities like DC, which is where I live, it's the absolute poster child for success.

Capital markets sits next to asset services. The carpet is worn out between the two groups. Close by are the tenant reps, you add insight as to if it's an office building or an industrial asset or whatever type of asset it is, lends insight as to how you really create the NOI, what the position of the asset is so that it could be valued correctly. Then, of course, you've got the PDS side, so that if there are capital improvements required to reposition the asset or to just enhance it, take it to a different level, then you have all that insight as well.

[[00:10:11]]
How challenging is it to replicate with Washington DC being the poster child to Miami? Is the main challenge the talent? How do you see Cushman & Wakefield overcoming the challenges in its strategy there?

[[00:10:32]]
It's really hard if you're going to try to organically build it. It takes so much longer and you just can't build enough energy around it if you don't have the right team, you don't have the right people. In a place like Florida, it might have been a good choice to go and acquire an asset services company. This is where the free cash flow issue comes in. Cushman had gone through many iterations of having enough free capital to invest and go buy to having very, very little and then having to create the strategy and the prioritisation about where those investment dollars are going to go. Although Cushman is very smart about knowing its business, although they might have wanted to buy instead of build an asset services team, let's say, in Florida, and they do have asset services. I don't want to, but is it enough to really build the strength? Getting back to it, Cushman may not have prioritised Florida or Miami as a best place for strategic capital, rather maybe build Biotech Life Sciences, PDS or currently, I know they're focused on data centres. It's a decision. It's always a strategic decision. Cushman is really smart, obviously, have fabulous research and fabulous economic forecasting, but they can't always do everything at once just because of restrictions on capital.

[[00:12:36]]
Do you see Cushman & Wakefield's strategic priorities aligned with an optimal strategy? Do you see the cash flow pressures decreasing over time?

[[00:13:03]]
I think they've done a nice job. I do think they've done a really, really nice job dedicating themselves to reducing their debt, and they've done great work over the last three years, but I also think that the cost of running the business are increasing significantly and then balancing that out with recruiting the right talent, which is very expensive. I still think there's a challenge for Cushman to grow the business and invest where it's really going to grow. For example, building a data centre business, very profitable on the tenant rep side, a little bit more restricted on the infrastructure and PDS and development side. Therefore, they can't really invest in buying an electrical company who can advise what it's going to cost to build a data centre or buying the specific talent with the knowledge base needed that enables Cushman to compete against CBRE in that front. It's hard. It's different. Where they've shined is in their capital markets on data centres, but it hasn't translated to an overall enterprise build with all of the service lines benefiting.

You asked me the question via e-mail, whether a 6-8% growth is sustainable for Cushman & Wakefield, I think that with recovery, it is, but the current market conditions have really thrown a wrench in the works. I don't think that Cushman has really built out their practice. I'm not sure what their strategy is anymore on data centres, but they really haven't built out their practice enough to show that contributing to the growth as much. Then on the Biotech Life Sciences, they have through attrition, lost some of their very smart and talented biotech life sciences talent.

[[00:15:34]]
How do you see Cushman & Wakefield positioned there with the talent war across brokerages? How important are the talent and relationships for growing the businesses?

[[00:15:57]]
It's critical. You've got to have the horsepower. It's very difficult to recruit, not just because it's hugely costly, but also because Cushman's corporate advisory business doesn't feed as vigorously the brokers as JLL and CBRE does. They don't have all the accounts and markets, and I don't know that their fee sharing is correct between their corporate advisory teams and in-market brokers in order to be a meaningful part of their business, I mean, the brokers business. If you're trying to recruit a broker from CBRE, I'm making this up, this is hypothetical, if you're trying to recruit a broker from CBRE who accounts for, let's say, USD 200,000 a year of inbound business that they did nothing to create that, obviously, they worked on, spent their expertise and their time, but it was inbound and then that's just their annual view of where their basis starts and everything that they build goes up over and beyond that. If you're trying to recruit a broker from CBRE in that dynamic to come to Cushman, what can you possibly represent as the inbound business? Is it comparative? In many cases, it's not, which means that Cushman & Wakefield will just have to spend more money to recruit that level of broker and so, that's difficult. The reason it's difficult, especially is because the brokers, they get that money, actually, it operates as a loan. It needs to be paid back. It's a time and performance loan.

If, let's say, a broker is recruited on a, I'll make this up, a five-year basis, you move your business from one operation to another, which, in most cases, impacts your business. You've got some downtime there. No problem for the broker. They're still making money at their old organisation because they're still finalising their deals under their old brand. They come to Cushman as the new brand, but they have to perform in this time and performance loan situation. They might lose a lot of time and they might say, "I couldn't really perform as much every year, and I've got a lot of catch-up." Then they have to extend. A lot of times, brokers just don't like that. They don't want to have that debt obligation, if you will. They don't want to have that obligation, and so it makes it a little more challenging to recruit. I bring that up now only because of the strength and the global footprint of the business and what comes into brokers. It's a tough dynamic.

[[00:19:07]]
Do you see talent retention for Cushman & Wakefield averaging in line with larger global brokerages, or are we seeing a shift competitively for talent and retention, both from a talent and client perspective?

[[00:19:32]]
Cushman enjoys a similar benefit, in that brokers… First of all, Cushman is a great company. I honestly can't remember brokers running out of Cushman because there's something wrong with Cushman. That's not why they go. They go because there's a better capital event in front of them in a different brokerage operation. Number one, I'd say, by and large, Cushman brokers are happy at Cushman. Secondly, if they're successful, they've built up a good business with their partners or on their own and then brought other partners in. It's hard to extract yourself, but the issue on retention is that they have feelings, too, and they get displeased if their current company, in this case, Cushman isn't compensating them the same to stay as another competitor is to bring them over, to recruit them. Where it used to be that retention was the cheaper way to go, it's not any longer. The brokers command, demand, and receive really the same capital, we're very close to it to move.

Now the company will say, "You're not going to lose all your business in a transition, but the new company is paying you for the transition." It's like a wash. It's expensive, and it's required. Not everybody gets retained. Those people leave, but it can't be a decision based on the brokers' retention model or recruitment model. It has to be a decision based on how valuable are they to the business and to the overall enterprise. Some people you lose impacts you in a lot of places.

[[00:21:30]]
How much business is converted in a transition? Do you see Cushman & Wakefield above, below or in line with its competitors when it comes to that dynamic?

[[00:21:50]]
You mean like when they lose a broker, is that what you're asking?

[[00:21:53]]
Yes, or gain one. Is there a certain threshold or range where business is brought over or lost in a transition?

[[00:22:04]]
I don't know what the percentage is, but I'll tell you this. All of the brokerages, all of them, including Cushman & Wakefield, are extremely careful about violating conflict of interest. It is very recognised, it's documented and contracted that the new firm does not want the old business, that is the claim of the company that's losing the broker. That is a violation. It could very well be a lawsuit, tortious interference with a client, a client's business, and none of these brokerages will touch it. They are very, very careful, and Cushman is very, very careful. When a broker leaves, that business is fully transacted at their old place of employee. Cushman has that same benefit. Nobody else wants to take Cushman's business. Cushman doesn't want to take anybody else's business in that circumstance.

[[00:23:03]]
With AI, we've seen a lot of growth in the data centre space, and you talked about Cushman & Wakefield being strong on the capital markets side. How are you seeing the company's ability to further lean into the data centre opportunity? Where do you see competitors competing?

[[00:23:31]]
Cushman, I think, stepped in with a new IT group, a new leader and a new IT group who focuses on building AI-generated reporting that's extremely useful. I wasn't there. I had already left, but I'm working on a lot of transactions with some of the Cushman brokers. They report that their new proprietary tool, their AI tool, which is a layered product that provides land values, land assemblage opportunities, power availability, fibre availability, all the list of the sellers if you're aggregating land, it analyses some zoning. It will analyse cost of workforce, cost of talent, if you will. It's a good tool with a lot of layers of information. I know they built that using some AI. I think that, that's a great tool. I also think that the investments that CBRE and JLL have been able to make because of their much more mature platform has enabled them to do a lot and probably a lot more if I were to be very candid about it. A lot of the resource tools that JLL has and CBRE has are really very good, very good.

The other thing about it is that we all know this that recruiting talent, especially the kids, the graduates out of school, having them with great skill on how to leverage and use AI, but also challenge it to make sure that the data is quality and it's correct is critical. I think that it's interesting. I don't know that that's led from the centre of Cushman & Wakefield, and it's up to the individual offices around the world to make sure that their brokers are doing all that correctly. I think that the competitors have a leg up in that regard. Again, I got to compare the maturity of the Cushman Company to the others.

[[00:25:59]]
With the leg-up that you mentioned, do you expect the gap to widen between larger brokerages and some of the smaller, more middle-market ones because of the datasets and the ability to invest? How do you see that evolving?

[[00:26:19]]
A lot of these high-profit businesses, capital markets being one of them, specifically data centres being one of them, medical office being one of them, whether it's a service line or a specific vertical or a location, a lot of these high-margin businesses require more strategic capital. I see CBRE buying technical experts and engineers. Previously, they were hiring architects to help create really good workplace strategy that was free to the brokers. They weren't charging the brokers for it. It wasn't a profit centre for them. It was an ability to win more business. That's a really nice thing to have as a professional in an organisation. On that front, I question whether Cushman is able to build correctly. I want to correct myself. I don't mean build correctly, I mean competitively at the same pace.

[[00:27:37]]
With AI evolving quickly, how do you think about the efficiencies it brings across some of the verticals for Cushman & Wakefield, and potential cost savings and the opportunity to leverage the technology?

[[00:28:00]]
First, I think it's important to say that the clients know a lot now. Everybody's got AI and those who know how to use it have a lot of really good access to information, but it's not market-level specific in a lot of cases. Some cases, it is, but you still need your advisers who have not just the performance information, what just happened in the market, what was paid, how was the deal structured. What led to a big asset management portfolio being acquired or lost. The clients have a lot of information. The operations, the commercial real estate organisation, service companies have to have a lot of information. It's also not just the information, is how is it being packaged and presented and delivered. I think that Cushman is really focused on it. I just don't know how much they're investing vs the competitors. I think that would be a very worthwhile review of it.

Then, I would love to know how much interaction are they getting from the market-level information. It's much easier to analyse that on asset services because AI is very useful in helping maybe reduce maintenance costs or headcount to maintain because you can have all kinds of monitoring driven by AI to understand what the repairs and maintenance should be on a prophylactic basis, preventive maintenance basis vs reactive. You can do a lot with AI on asset services. I think you could do a lot with AI on valuation advisory, a lot, but you still need to have that market-level expert. From the research perspective, as long as the market-level expert is validating or challenging the information correctly, then it's not really worthwhile.

The other thing is that speaking of valuation advisory, the V&A business is pretty critical because the amount of information that's in the data vault. Obviously, the commercial real estate firms are extremely careful about how they tag their data, what's public, what's not public, what could be used. They're all really careful with this. They're going to be very careful not to violate confidentiality with clients, not to provide information that's not theirs, who owns the information. I think there's a couple of ways to cut it. Number one, Cushman has really good data vaults, really good because their V&A is great. Then the question is, "Is Newmark's bigger? Is it more robust?" They have a really good V&A business as well. The question then is, "Does that V&A data help drive and support capital markets differently?" I would say that, "Newmark is great at this. I think Cushman & Wakefield is great at this in certain locations." For example, in Newmark, I would expect that the capital markets brokers in Manhattan are helping feed and use a phenomenal resource by their quite talented V&A team, who formerly was at Cushman & Wakefield. Cushman & Wakefield in many locations have excellent V&A people. Really good expertise that when married with the other service lines is a pretty powerful solution.

[[00:32:22]]
Do you expect to see even more specialisation, given the data vaults and how important they are? Do you expect it to continue to shift in that direction?

[[00:32:42]]
I do because real estate opportunities are shifting. You start to think about some of the interesting things that V&A does. They value automotive facilities and mobile home parks and mobile home pads and airport stuff. When you start to look at maybe mixed-use development or you start to look at mobility information that informs on not just retail, but also on office buildings or even industrial, when you start to think about how it can impact all the parts of your business, it could be really powerful, but you have to have people motivated to do it, that want to do it. It's there if there's a powerful talent in the market, and then you have to have the understanding from the professionals in the market that that's how you're going to deliver your best service and your best advisory to the client when it's including all of the data. The data vaults are pretty valuable.

[[00:33:55]]
You talked about clients getting smarter. One thing that comes to mind is the potential risk to fees for some of the brokerages because of AI. How are you thinking about the risks, potential disintermediation with AI and the challenges ahead?

[[00:34:22]]
There's definitely risks. There's not a question about it. There's definitely risks because I think I read something about nine months ago, maybe it was six months ago about a seller selling an asset 100% leaning on AI. That one turned out okay. Usually, it might not turn out optimally because the brokers have the relationships with the buyers and the sellers. Things change rapidly. We're evolving quickly. Only the people that are in the market and know the beat and know who's investing what and why and where could really advise. If you're using AI, how do you know that you really got the best information to leverage?

Now, I'll give you an example that could work really well. Let's say, you're a 1,000-square-foot tenant and you want to go lease something. Maybe AI is okay. That is going to be a roadblock for young brokers to come in and build a business. If you think you're going to recruit a broker and they're going to just start and organically grow their business, I don't think so, because I think AI is going to take a chunk of that business, which means that if you're going to build your practice, you've got to have enough capital to pay a broker to join another brokerage team if they're not going to be able to do those small deals.

I don't know about JLL and CBRE, how they look at their business every month, but at Cushman, the business is viewed in many different ways. If you look at the brokerage revenue, it's viewed as transactions that are USD 0-250,000, USD 250,000-500,000, USD 500,000-750,000, USD 1m, above USD 1m to see what's driving your business and to understand, (1) Is the business structured correctly in the market? (2) Is there more opportunity and where would that be? That might inform you, I need to go out and buy a brokerage whose revenue annually averages USD 3m because I have too many of these USD 500,000 guys and gals and they cost you money. You have to have marketing, you have to have financial analytics, you have to have all the centre-led research. If you're not putting enough revenue on top of that cost basis, then you're not operating the right model.

With AI, I think it's going to have to be analysed and probably is already being analysed on, okay, so you're not going to be generating this much revenue and this much EBITDA on transactions that are USD 250,000 and below. How are you making up for it? What's the alternate business plan? Then, the other thing is how much money then do you invest in AI on its own? What do you want it to do for you that's different than the competitors? Cushman started in the capital markets AI tool. I think it's been very useful and successful. I don't know how much, I do not have at all any context to say how much revenue or EBITDA or margin is created.

[[00:37:49]]
With AI, do you see risks on the lower side of transactions revenue? How do you see Cushman & Wakefield focusing on winning the bigger deals and mitigate potential risks?

[[00:38:29]]
Let me confirm that I don't believe that AI is going to displace a broker representing a firm for 50,000ft, 100,000ft, 300,000ft. From the firm's perspective or the company's perspective, it is rather reckless right now because first of all, we all have to challenge it and test it and make sure the information is valid. The only way you have that is by an expert on the ground. Number two, AI, as powerful and wonderful as it is, it doesn't have all the market-level information and data. A lot of that stuff is not public. A lot of the stuff is just known because you're at the firm that transacted the deal or you have a tight circle of people who know they're not violating confidentiality and might share it with you, but don't want it out in the public eye. There's so many components to transacting a deal. You have to make sure you're getting all of the economic development authority support.

If a tenant is moving from different location to a different location or even thinking about it and you want to get some support from the county or the state, I don't know how you do that with AI. I'm sure there's ways to do it. Then, combine that with analysing how are you going to hire your talent? How are you going to compete in that market against your peers? Is there the right state profile and the right talent pool to support your business growth? There's so many components involved in these decisions that it's not just dollars and cents for deals and for tenant improvements. There's just so many components to it. I just think it's going to disintermediate on the lower end, I really do, but I don't see it on the top end.

[[00:40:38]]
How do you think about AI from a vertical perspective with leasing, valuation and advisory? Do you see certain verticals having AI be an accelerant to do double the work, or do you see certain verticals being more at risk?

[[00:41:03]]
If you're not leveraging AI in PDS from your construction scheduling, your acquisition, your procurement rather, your reporting, in these reporting tools and in the management arena, whether it's PDS or asset services or even document creating on proposals back and forth, if you're not using AI, then you're not going to be as productive as your peers. These companies actually have to own it. We're not turning back. AI is in our bloodstream now, so own it and leverage it or fall behind is the way I look at it.

[[00:41:55]]
We talked about some of the debt and free cash flow hurdles for Cushman & Wakefield, and its FY26 and FY28 targets, the company noted 60-80% free cash flow conversion and 2x 2028 net debt leverage in Q1 2026. With competition in AI continuing to accelerate, how do you see the company's ability to execute there?

[[00:42:35]]
The free cash flow and the strategic capital that they invest in building more AI for all these tools is going to take away from that free cash flow that recruits bigger, more meaningful talent or enter into a new service line, I shouldn't say service line, but a different aspect of a service line or provide more services to a client. That's the difference between the maturity cycle of Cushman and the rest of the firms. That free cash flow, I don't know that the free cash flow at Cushman has improved that much. They have definitely lowered their debt, there's no question, and that is much to their credit, but their expenses have gone up. It's more of an expensive business model to manage.

Now, I think some of the triggers that they've activated have been, let's change the compensation model for the brokers where the house keeps more of it. Then, the brokers don't like it, but then the brokers will say, "Okay, I'm getting more tools." Are they getting more tools? They better, because that's the other thing that displeases your talent. Do I have the same tools that I need to build my business more robustly than I have been? Cushman really has to make sure that they invest in those AI tools, and that reporting and the people that can help them walk into a client and educate the client and demonstrate value from the minute they walk in the room, so the client says, "Yes, I'm going to hire that team." It's not just the broker, it's a big team. I don't really see the validation that Cushman has built more yet, but then again, I don't know how much they're marketing, how much they're spending in it.

[[00:44:56]]
From a capital structure perspective, do you think it might be more optimal to look to raise money – whether through credit or equity markets – to try to keep up with larger brokerages, and maybe not worry as much, as the net debt, given how capital-intensive the talent war is making it, the investments in AI require? Cushman & Wakefield has USD 647m of senior secured notes in 2028. In 2030, the company has roughly USD 1.6bn of term loans and an undrawn revolving credit facility. What do you view as its optimal strategy to win and compete?

[[00:46:13]]
Michelle MacKay, this is her superpower, is restructuring all this debt and repositioning. That's her superpower. She's done a really good job. It's her experience, it's her background. She's got a lot of good context to execute on this. I think that Cushman is spending a lot of time figuring out how to create more free cash flow. Renegotiating that debt and those credit facilities and expanding them so that they can expand their business is, I think, critical. The strategy should be reinvesting more where it matters. The question that I would be asking if I was an analyst on the call is what exactly do you think matters to your business right now, the where, the what, the why and not because data centres are on every front page newspaper every day, but where you've been talking about it for a couple of years, how much revenue have you really grown there, where? I don't mean physically where, but is it in PDS? Is it in tenant rep? Is it in power acquisition?

Cushman should have a power group. They really should have a power group. I spent so much of my time right now in power. The power group that they have is embedded in the capital markets team, and they are really good, but they serve the capital markets team. I think that could be a centre-like thing and it would return a lot. That would have a high… My question would be, if I were on the quarterly earnings calls, I would ask about where is that investment? How much has it returned now? Why is it going to be different than the returns you've gotten so far?

[[00:48:06]]
Do you see power being one of Cushman & Wakefield's strategies? Does anything else maybe come to mind?

[[00:48:19]]
I look at the competitors and I see them buying engineering companies. Engineering companies have a lot to do with the cost to operate buildings, the talent that helps the clients plan on how are you going to maintain your building, your business better. It is on its own a revenue source. These smaller developers would really appreciate not having that as a cost centre. The engineering is a cost centre, so you could engineer, you could even do it white label. I think that if you were to build more of that type of talent and create a profit centre out of it and have somebody really run it well, it would be really good. They do have really good engineers, and it's more in their corporate advisory services, but do they have the bandwidth to go out and make that in their own profit centre? They don't. They're pretty busy, these guys and gals. The clients depend on them. Could you build more around that? I would be focusing on what's really going to bring your business further along and better.

[[00:49:49]]
Is there a way to contextualise the amount of investment required to further leverage a power group or buy engineering teams? Is it in the millions or hundreds of millions?

[[00:50:04]]
It's definitely in the hundreds of millions. On a smaller scale, could it be USD 50m? Yes. Then you've got a buy-and-build strategy, not just to buy, because then you got to grow around that, which might be their better strategy. The other thing that I'm going to mention is multifamily. That has not gone well for Cushman & Wakefield at all. They've lost a lot of their talent. They lost their very talented leader. They have not found the right solution with Greystone on the sourcing and servicing of agency debt, and because of that, they can't really recruit great brokers from CBRE or Newmark, all who have their own platform for servicing and sourcing debt.

A lot of the multifamily brokers actually have very good… Remember when I talked about having a basis of business that comes in every year, for the multifamily brokers and these other organisations, they actually get some of the servicing strips. Cushman won't share their servicing strip. They can't. They can't make sense out of the numbers. The brokers are, "Why would I go to Cushman if I'm already giving up USD 100,000-200,000, I don't know, out of the servicing strip? Do I have the wealth of talent in every market needed in order to collaborate and trade across the client base and build that client base?" That has not gone well for Cushman. It has gone well for Newmark. It has gone well for JLL. It has gone well for CBRE, but it hasn't gone well for Cushman. I don't really think that in this market, you can have enough growth without multifamily.

[[00:52:09]]
Do you expect such challenges to continue? How do you see Cushman & Wakefield's ability?

[[00:52:22]]
They have to fix the agency debt situation. They have to fix it. It's very difficult to operate in the structure that was created with Greystone. I think Greystone has made money. I don't know that Cushman has really with the investment that they made. It's certainly not viewed as a terrific asset by the Cushman brokers.

[[00:52:55]]
How would you fix it?

[[00:53:01]]
It's going to take so many millions of dollars. You can't get a DUS licence. It's impossible to get a DUS licence. You got to buy a company and Cushman thought, now I got to just be very careful about what I say. Cushman studied this deeply over a very long period of time. They studied it deeply over a long period of time. The bottom line is they invested too late and they didn't have that many opportunities and so the structure of their investment didn't work well for them. How do they fix it? They need hundreds of millions of dollars for that. I don't think that's where they're going to be focusing their free cash flow.

[[00:53:58]]
What's your overall outlook for Cushman & Wakefield over the next 1-2 years?

[[00:54:04]]
Let me think about this for a second. I think that Cushman is a super strong company, and really what makes it strong, I have to be really careful about how I say this, what makes it strong is the talent in all the service lines. We talked about leasing, PDS, asset services, V&A, capital markets. That's what's making it so strong. I think that the leadership has to be studied. They were bragging about getting a lot of leaders out of place, but I think maybe they lost some of the good leadership that they needed about where the business should be going. I don't know. I think that the outlook for Cushman is terrific as long as they retain all their good talent in the markets and in the verticals that are required. My outlook is appropriately positive. Can I say to you with conviction they're going to meet their 8% growth? I can't say it with conviction. I certainly can't say it with conviction this year.

[[00:55:36]]
Is anything else worth noting about Cushman & Wakefield that we haven't talked about today?

[[00:55:44]]
We talked about multifamily. I would also look at retail. Is the retail business actually growing? It feels as if they've abandoned retail, but for the very strong brokers in high street, retail capital markets, they've got several good people around the country. I don't know about the globe, but around the US, they do. I would really want to study, out of that 8%, does retail contribute to any of that growth? If so, where is it, because I don't see a lot coming out on that side of it. The other thing is that I would, on the very positive side, look at the industrial business. It is very good for Cushman. They have fantastic talent all throughout the country. They have fantastic talent on the leasing. They have fantastic talent on the industrial capital markets. I think Cushman is a force to be reckoned with on industrial. They are really good. I put them up against anybody.

[[00:57:09]]
I think we can wrap the call up. Let me close by saying thank you for taking the time, and have a good rest of your day.

[[00:57:24]]
It was my pleasure, and thank you. I appreciate the opportunity to speak with you.

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