Ladies and gentlemen, thank you for standing by, and welcome to the CBRE Quarter 1 2013 Earnings Conference Call. At this time, I'd like to turn the conference over to our host, from CBRE, Mr. Nick Kormeluk. Please go ahead.

Thank you, and welcome to CBRE's First Quarter 2013 Earnings Conference Call. About an hour ago, we issued a press release announcing our Q1 financial results. This release is available on the homepage of our website at www.cbre.com. The conference call is being webcast and is available on the Investor Relations section of our website. Also available is a presentation slide deck, which you can use to follow along with our prepared remarks. An archived audio of the webcast and a PDF version of the slide presentation will be posted to the website later today, and a transcript of our call will be posted tomorrow. Please turn to the slide labeled Forward-Looking Statements. This presentation contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our future growth momentum, operations, financial performance and business outlook. These statements should be considered as estimates only, and actual results may ultimately differ from these estimates. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that you may hear today. Please refer to our first quarter earnings report filed on Form 8-K and our current quarterly report on Form 10-K, in particular, any discussion of risk factors or forward-looking statements, which are filed with the SEC and available at the SEC's website, sec.gov, for a full discussion of the risks and other factors that may impact any estimates that you may hear today. We may make certain statements during the course of this presentation, which include references to non-GAAP financial measures, as defined by SEC regulations. As required by these regulations, we have provided reconciliations of these measures to what we believe are the most directly comparable GAAP measures, which are attached hereto within the appendix. Please turn to Slide 3. Participating with me today are Bob Sulentic, our President and Chief Executive Officer; Gil Borok, our Chief Financial Officer; and Jack Durburg, our Global President of Transaction Services business. I'll now turn the call over to Bob.

Thanks, Nick. And please turn to Slide 4. CBRE had a good start to 2013 in what is traditionally our seasonally slowest period of the year. As you have seen from our news release, revenue, earnings and normalized EBITDA grew solidly despite continued sluggish pace to the global economic recovery and a high degree of investor and occupier caution that persists in many parts of the world. In this environment, CBRE continues to be well served by our broad geographic and product line footprint and the effectiveness of our people at working across these markets and business lines to create value for clients. Going forward, we will also benefit significantly from the series of debt refinancing actions undertaken in March, which Gil will describe in detail. These actions will lower our interest expense and increase our capacity to fund strategic initiatives and platform investments, while giving us greater flexibility to navigate market uncertainty. In the first quarter, revenue rose in every one of our global regions and major business lines. It was particularly gratifying to see strong double-digit revenue growth in the EMEA, a notable turnaround from last year's first quarter. This improvement partly reflects our preeminent position in the U.K., which continues to attract a disproportionate share of capital due to its safe haven status, and our ability to take advantage of modestly better market sentiment and activity on the European continent. Asia-Pacific also meaningfully improved on last year's first quarter, with notable gains in Greater China and Japan, while the Americas sustained good growth in all business lines. Looking at our global business lines, capital markets-based businesses again set the pace. Property sales revenue increased 21%, led by rebounds in EMEA and Asia-Pacific. Commercial Mortgage Brokerage revenue improved 16%, fueled by continued strong U.S. investment activity, particularly in…

Thanks, Bob, and please turn to Slide 5. Transaction services consist of 3 core businesses: Leasing representation on behalf of occupiers and investors. We have 4,100 professionals globally providing the service. Included among the occupier they serve are the more than 300 clients on a global corporate services business. Property sales, where we have 1,500 dedicated professionals. In the U.S., this business primarily consists of representing sellers, while in EMEA and Asia-Pacific, we represent both buyers and sellers. Mortgage brokerage, where we source debt for investors or sell loans for lenders, is almost entirely a U.S. business, where we have more than 100 professionals. We believe clients are best served through specialization and teamwork, so we organize the businesses around property type: Office, industrial, retail, multifamily and hotel, as well as geography, with collaboration across disciplines and markets in delivering service. As you can see from the chart, we are, by far, the most active sales and leasing firm, with nearly 190 billion of transaction volume in 2012. Our focus starts with the delivery of consistent, high-quality client service around the world. It is this focus that has led to CBRE's size and strong market position, and that continues to be the catalyst for the growth of our transaction services business. I think it's important to find quality service in the context of our transaction business. Transaction services entails sophisticated client advisory work. It is not just selling. While selling is an important element, it is underpinned by deep market knowledge and research, comprehensive and often complex analysis of alternatives, financial modeling, and thoughtful strategies developed by experienced and skilled professionals. This is all typically coupled with expertise in marketing and negotiations. In almost all cases today, you need collaboration among teams rather than individuals acting alone to deliver these…

Thank you, Jack. Please advance to Slide 7. Total revenue was approximately $1.5 billion for the first quarter of 2013, up 10% from last year or 9% excluding discontinued operation. This increase is at the upper end of our expectations for long-term growth and was generally well balanced among service lines, with good growth around the world. Cost of services increased slightly to 58.4% of total revenue in the first quarter of 2013 versus 58.3% in the first quarter of 2012. First quarter 2013 operating expenses were 31.8% of total revenue, down from 32.6% in the first quarter of 2012. It should be noted that $10 million of integration and other costs related to the ING REIM acquisition were included in the first quarter of 2012 versus only $1.5 million in the first quarter of 2013. Excluding integration costs, operating expenses were 31.7% of revenue in the first quarter of 2013, very much in line with the first quarter of 2012 despite incremental investment in our operating platform. Interest expense was relatively flat versus the first quarter of 2012, given that our refinancing activities occurred late in the quarter. The write-off of the first financing cost related to our prior credit facility and certain financing costs incurred for the new credit facility resulted in an expense of $13.6 million, which has been normalized. In addition, $24.8 million of financing costs incurred in connection with the new credit facility were capitalized. Our first quarter 2013 tax rate was approximately 35%, as compared to 42% in the first quarter of 2012. This lower tax rate was largely the result of higher earnings in lower tax rate jurisdictions than in the first quarter of 2012. Our focus on the tax efficiency of our legal entity and operating structure continues, and our full year…

Thanks, Gil. Please turn to Slide 19. With 3 months now in the books, we continue to view the opportunities ahead of us in 2013 favorably. While the macro recovery continues to be slower than previous ones, our leading presence in key global markets, broad high-quality product and service offering and strong flexible capital structure position us well to drive continued top and bottom line growth. We expect to achieve positive operating leverage, while making strategic investments in our people and platform. These investments are vital to further cementing CBRE's place as the global market leader. We believe that CBRE remains on course to achieve full year revenue growth in the mid- to high-single digits. Among our major services business lines, we expect investment sales to continue to grow strongly, fueled by low interest rates, investors continued search for yield and real estate acceptance as an institutional asset class. We expect outsourcing to sustain steady low double-digit growth as adoption continues to grow around the world. And we expect leasing activity to pick up as the year unfolds. Although lower results from our principal businesses in the first quarter, as well as planned increases in headcount in the Americas caused margins to narrow slightly versus the year-earlier period, we continue to expect margin improvement for the full year. We anticipate this will be driven by increased contributions in future quarters from our higher-margin transaction services and principal businesses, as well as our continued focus on calibrating operating expenses with revenue growth. In light of this, for all of 2013 we continued to expect adjusted earnings per share to improve in the range of 15% to 20%, coming in at $1.40 to $1.45 range for the year. Before we end today's call, I want to note that the people of CBRE send our thoughts, prayers and best wishes to our clients, employees and friends in the Boston area. The people of that city have shown remarkable resiliency. CBRE extends its sympathies to the victims of last week's senseless act, and we applaud the first responders and everyone in law enforcement, who assisted with this terrible situation. With that, operator, we'll take questions.

[Operator Instructions] Our first question today comes from the line of Anthony Paolone with JPMorgan Anthony Paolone - JP Morgan Chase & Co, Research Division: On the margin issue, sales, leasing and mortgage brokerage were all kind of up year-over-year and those tend to be sort high incremental margin businesses. So you'd mentioned hiring kind of weighing on things. Can you talk a little bit about the type of hiring, what the timeline is for perhaps the type of hires you made to produce income and just what the impact of that was?

Yes, we can, Anthony. Thanks. This is Bob. We hired people to support our technology platform. We hired people in the area that supports our brokerage business, both of which we had focused on late last year in our comments and thought that it was important to make those investments. It's notable that additional investments we made in people will play out ratably over the year. That's not the case for our revenues, obviously. So the impact of these new hires and these incremental cost are more significant in the first quarter, given the lower revenue, than they will be as the year wears on. Anthony Paolone - JP Morgan Chase & Co, Research Division: But are those folks revenue producers or -- because it sounds like you mentioned a couple of areas of support, or is it just the idea that, that support will allow the producers to do better? I'm just trying to understand that.

Well, we certainly hired new revenue producers. But the people I'm talking about are not revenue producers. They're support folks. Anthony Paolone - JP Morgan Chase & Co, Research Division: Okay. And then on the balance sheet, the financing activity that you guys undertook in March, how did that tie to what you'd included in your guidance originally?

Yes, Anthony, it's Gil. With minimal breakage, so to speak, it pretty much was considered in the guidance. So it obviously didn't play out exactly as we planned it, but bottom line, it is considered in the guidance. Anthony Paolone - JP Morgan Chase & Co, Research Division: Okay. And then last question I had. You mentioned in some of your comments in the press release about the balance sheet moves and the ability to make strategic and operational investments. So just curious if you could comment on what the acquisition pipeline may look like or what you're seeing out there on the deal side and/or whether or not the balance sheet activity and strength has gotten any closer to perhaps considering a buyback or some other use of cash like that?

Yes, Anthony, I'll let Gil comment on the buyback. But in terms of the strategic activity or the M&A activity, as is always the case, we're in the market for infill acquisitions, and we consider that a core competency. We look for those opportunities in all of our business lines, in all of our regions of the world. We'll do that this year, as we always do. In terms of bigger strategic opportunities, those are less frequent. We believe they will still arise from time to time. And I think it's worth remembering, sometimes, people look back and think, wow, there was a lot of these big strategic deals going on at one point, and that isn't the case now. The reality of it is, those big game-changing strategic deals have been coming along about every 5 years. So it was about 2001 that the Insignia acquisition happened. About 2006, 5 years later, the Trammell Crow Company acquisition happened. 2011, late the year before last, the ING acquisition happened. We think those big opportunities will be out there, and we continue to look for them. But on a regular ongoing basis, we have our people around the world and across our business lines looking for infill acquisitions. And we do believe that the balance sheet actions that were taken in the first quarter certainly make it easier to do that.

And then just following on from that, Anthony, I would say that, as I've said many times before, we don't have a menu that excludes any use of cash. Buyback is on the menu. But at the moment, as it has been for some time, it's pretty low down. We would conserve cash and capacity to do the types of things that Bob was talking about, whether that be infill or strategic M&A, whether that be co-investments in our principal businesses and/or whether that be debt pay down before we would consider doing something on the equity side.

Next question today comes from the line of Brandon Dobell representing William Blair. Brandon Burke Dobell - William Blair & Company L.L.C., Research Division: Turning to the Property Services business for a second. How should we think about the puts and takes on square footage growth? It hasn't been that significant for several quarters now. Obviously the revenue growth has been there, but the square footage has been kind of stuck in kind of minimal growth range. Can you get that up to a kind of 5% or 10% number? Or is low single digits the right way to think about it? And then if that is the case, this 10% plus growth rate we're seeing, how are you guys getting to that? Is it just cross-sell or is it more value-added services, or was it pricing?

Brandon, it's Gil. Let me just take the square footage question, which has been -- first of all, when you see the chart, there is rounding. But there has been perhaps less growth than when you look back 4 or 5 years. And I think the crux of the question was how do you tie that to the revenue growth? Well, when we look at the Global Corporate Services business and quote a 12% growth rate globally and 15% in the Americas, that includes the entire business, which I think you'll recall includes transaction management, where we've seen accelerated growth in more recent years. That obviously doesn't translate into square footage. We're also seeing good growth in project management, and that doesn't translate into square footage. So it's really facilities management for occupiers and property management for landlords, that revenue would have a correlation to square footage. And then I remind you that asset services is 2/3 of the $3 billion under management, and that's growing a lot slower. So there isn't -- it's not apples-to-apples. The portion of the business, the facilities management portion of the business, that is growing faster under GCS is correlating better, that subset is correlating better to revenue.

There's additional point there that's worth making, Brandon, and that is, that on the property management or asset services side, we've ramped up very significantly over the last couple of years a premier properties initiative. A lot of the new wins that we've had have been in this premier properties class, which tends to be high-end office buildings around the world, which tends to generate higher revenues per square foot than some of the things that were in our portfolio historically. So that's been a very nice shift in product mix that helps on the revenue and profitability side but doesn't show up in the square footage measures. Brandon Burke Dobell - William Blair & Company L.L.C., Research Division: Okay, that makes sense. Back to the business review day, and a little bit on the fourth quarter call, you talked about kind of linking more the services or the service lines together in a number of ways, just trying to be one-firm face to the client. Has there been any change in terms of how people are compensated based on that goal of trying to get more, I'm going to call it cross-sell, to use a loose term. Has the organization kind of rethought how the compensation models should work or could work as you guys try and integrate things more closely?

We've thought about that, Brandon, and the reality of it is there's so many places with so many clients that you have to connect your people around the world now and across product lines to serve these clients that it would be impossible to come up with a compensation model that are on a rifle-shot basis awarded incremental comp to people who cooperated with each other. And we explicitly addressed that and decided not to do that. We talked to our people about it. So we get at it in 2 ways. Number one, we really aggressively push and preach the notion here that the way you'll be compensated for this is that the whole firm will do better. We'll serve our clients better. We'll land more clients. And in the long run, everybody will benefit. And I think that there's been a lot of buy-in to that notion in our company. The other thing we do that's much more direct and explicit is among our management team, the people that run the business, people that do a better job of generating coordination around the company and collaboration are the people that get promoted. They're the people that get the good assignments, and they're the people that become the bigger leaders in the company. And that's become a very prominent notion within the enterprise. Brandon Burke Dobell - William Blair & Company L.L.C., Research Division: Okay. Gil, in terms of capital spending or any kind of moment on the pension or any kind of accrual things that'll change kind of how they give out the free cash flow this year, anything to think about out of the ordinary?

No, Brandon. I think there's nothing that strikes me as -- that's worth mentioning on that front. Brandon Burke Dobell - William Blair & Company L.L.C., Research Division: And then a final one for me is as we think about headcount additions for the balance of the year, should we think about the same kind of pacing in incremental additions that we saw in the first quarter? Should it slow down, focus more on revenue producers versus support people? Any kind of color would be great.

Well, again, Brandon, I want to -- this is an important point, and I want to stress it because I don't want it to be missed. The kind of quarterly run rate of these incremental investments we've made in the platform, so to speak, the nonproducing part of the business that supports the producing part, that impact in absolute dollars should be roughly the same and, frankly, may even go slightly down on a quarter-to-quarter basis against ever-growing revenues. So the impact you'll see from that will diminish over the course of the year. And in terms of market-facing hires, particularly in our transaction or brokerage businesses, we have very aggressive plans there, and I'm going to let Jack comment on that because he is quarterbacking that for us globally.

Sure. Brandon, as you know we're always looking to bring new talent into the firm, and we do that consistently. So we are increasing the productivity of our producers, and we're bringing in new talent on a regular basis across all 3 regions.

Question comes from the line of David Ridley-Lane with Merrill Lynch. [Operator Instructions]

Sure. Just very impressive growth in the EMEA region this quarter. I'm wondering how sustainable that is, and how optimistic are you about investment sales volumes in that region to the full year?

Okay, I'm going to comment generally, and then again I'm going to ask Jack to comment on investment sales because he is closest to our transactional business. But in general, we're expecting a better year this year versus last year in EMEA. The growth rates that you saw in the first quarter were pretty strong, and it's always important to caution 2 things. Number one, the first quarter is a small quarter, so relatively small numbers can have big percentage impact. And we saw some really big percentage impact. They did a really, really nice job in the first quarter in EMEA. But those kind of growth numbers, I don't think you can extrapolate throughout the course of the year. We'd love to see them, and we think our team is going to have a nice year in EMEA, but I don't think you can extrapolate those kind of growth numbers across the year because, a, it's one quarter and, b, it's a small quarter. We think it's going to be a better year, though, than last year. Jack, you might want to comment on the expectations for investment sales.

Sure. Thanks, Bob. Well said. We do believe that there's going to be moderate improvement throughout the rest of the year, notwithstanding the difficult environment throughout Europe. There's still a lot of capital, cross-border capital chasing safety and core assets. I think one important point to note around the growth of our -- in our first quarter was the addition of Franc Warwick, who made a significant impact, and that was a recruitment that we made in 2012, the results of which we're seeing in the first quarter. So going forward, cautious optimism around the sale side. Right now most of the activity is still core assets in core markets, really with a flight to safety. Hopefully, as this market stabilizes and moderately improves, we may see then our investors chasing a little bit more yield and moving out of those core markets, but we really haven't seen much of that yet.

Got it. And then on the -- I'll take another cut on the Americas investment. Can you size what Americas EBITDA margin would've been up x the platform investments with this kind of 100 basis points drag or 200 basis points drag, or can you kind of bucket the rough size?

That's hard for me to do off the cuff. I wasn't expecting that question. But I -- the investment on people was in the, call it, in the -- maybe this will be helpful for you, in the $3 million to $5 million range.

Okay, that's great. And then last one for me. Can you talk about the -- I was a little bit surprised to see the Global Investment Management Assets Under Management down. Can you talk about the capital raising plans you have for that segment in 2013?

Yes, David. First of all, it's important to note that the FX impact alone took the Assets Under Management from what would have been slightly positive to negative over the course of the quarter. We also are doing exactly what our clients in that business want us to do and that is we're selling assets because it's a very good time to be selling assets. So the combination of those 2 things is really what accounted for that decline. We expect this to be a very good year in terms of new capital raising and materially better than last year.

Just remind us what you had last year, if you have that number?

In '12, I don't have it.

I think it was net of the securities business, I think it was between $3 billion and $3.5 billion.

Sounds about right, yes.

Mr. Marks, your line is open.

Actually, let's start with Jack. On transactions in -- I guess it was Bob that pointed leasing should pick up for the year off of the 3% first quarter. Why would you think it would -- what makes you -- you have a lot more knowledge than we do, so what gives you that idea?

Sure. Well, obviously, that's a global number that you just stated, right?

Right.

So you really have to look at it region-by-region to answer the question. We do believe that in the Americas, we are moderately improving. And so that's part of the answer. In EMEA, as well as difficult as it is in that environment, we do believe the second half of the year will be better than the first half, and there may be some moderate improvements there as well. In Asia-Pacific, difficult environment. Currently, the multinationals are slow to make decisions. A lot of the activity is from domestic firms, but we do believe that, going through the course of '13, that there'll be some moderate improvement in leasing activity there as well. So when you roll that all up together, the global outlook is moderate improvement.

Will, this is Bob. I think the -- just in a nutshell, we believe business confidence around the world is going to grow somewhat as the year wears on. And when business people are confident in their businesses, they tend to lease space, and when they're nervous, they don't. And leasing decisions can be turned off and on pretty quickly. So if we're wrong about business confidence growing, then we'll be wrong about our enthusiasm for the leasing business growing as the year moves on.

Another question on margin. I'm not going to -- I think you pretty made it clear why there's an upside and why the first quarter was maybe a little weaker than we would have thought. Was there anything -- I guess it's a quick question. First quarter '12, is the number as reported or was there any anomaly in that quarter?

So, Will, on the normalized basis, it's apples-to-apples. But I think we didn't -- it hasn't been as highlighted in the Q&A, but certainly in our prepared remarks, we did talk about the principal businesses also having an impact on margin. That was normal activity, and I'm talking about normalized margin. So we had higher equity earnings in the prior year in the development business than we had co-investment returns in the investment management business that will hire to the tune of $3 million to $4 million. And that's the other reason that we've got margin compression. And again, in the first 90 days of the year, that type of amount makes an impact, a bigger impact on margin dealing with a smaller base.

Okay, great. That's very helpful. And then just a couple of below the line, below the EBITDA line questions that you're usually okay answering. On interest expense for the full year, you may have given this and I missed it on the call, but can you give us some sense of what the full year number should look like?

Yes, I can. And it's going to change quarter-by-quarter, obviously going down each quarter, particularly after we call the 11.625% notes in June. So the full year number is going to be around $145 million, but it's not going to be ratable. It'll still be around $40 million in Q2 and then around $30 million in each of 3 and 4.

Okay. And then just my last question. D&A, is the first quarter a run rate?

Yes, it is a run rate. You're looking on the P&L, on the press release, you're seeing $46 million. The normalized equivalent is around $40 million, both of which is indicative of the year. So it's $46 million GAAP per quarter, $40 million normalized per quarter.

We have a follow-up from Anthony Paolone with JPMorgan. Anthony Paolone - JP Morgan Chase & Co, Research Division: Just, Gil, on that principal business comment. Putting aside the first quarter, do you also expect that to be up year-over-year from last year for the full year?

Well, in answer that question, let me split the Development Services business from Global Investment Management. We said, or we have said, that Development Services would not be as strong as it was in 2012. We had a few large sales in '12 that aren't going to recur, and that has a lot to do with starts and when -- the downturn in '08 and '09, we've been harvesting certain projects that were held for a little while, but the stocks have been down in more recent years. It's going to take a little while for that business to get back to normal activity. So bifurcating that from Global Investment Management on the other hand, where we see moderate improvement, you've got to remember that '12 was obviously a significant improvement, when we added in ING REIM for the full year. We don't have that going for us this year. We do have some tension in Europe with regard to the situation there. That is impacting the business. On the other, we've got more robust activity in the U.S. So all in all, moderate improvement in that business, development clearly will be down. Anthony Paolone - JP Morgan Chase & Co, Research Division: Okay. And then just a couple of other ones. You'd mentioned in your opening remarks about some of the growth in Leasing came by way of share. Can you give us a sense as to what just the market, I guess, like, commission pot, for maybe a lack of a better term, what that change was year-over-year?

Sure. Well, as you know, tracking leasing is not quite as transparent as tracking sales, right? So it's not as much of an exact science. We do the best we can. There are firms out there like a CoStar, as an example, that I would say that the market actually was down significantly quarter-over-quarter. We believe that it was down slightly, and yet we were able to grow our revenues there by picking up share. One of the reasons for that, of course, I think is the change in buyer behavior, actually. Our clients now are buying in a more consolidated manner as opposed to a one-off manner. And we are well positioned to win that business and to service that business. And so we are taking share, as a result, from some of our competitors. Anthony Paolone - JP Morgan Chase & Co, Research Division: Okay, got it. And then just one last question. I think and maybe this was in the press release. I think you mentioned that in facilities some project management activity and perhaps Europe maybe helped there. And I was just curious what the magnitude of something like that is. Do you see -- is revenue like that that's project-managed, and does it tend to have as much duration or is it more or less recurring than sort of the rest of facilities business? Like we should think about any adjustments that we should make there?

The project management revenue is less recurring than the facilities management revenue, and probably roughly comparably recurring with the transaction management revenue that we do for our Global Corporate Services customers. And I don't think that I would try to read too much into what might go on for the rest of the year relative to that project management work in Europe. First of all, it's not a dominant number. It's material to first quarter when it happens. But if the same thing happened in the third or fourth quarter, it wouldn't have a comparable effect on our numbers.

There are no other questions at this time.

Okay. Thanks, everyone, and we'll talk to you again at the end of the second quarter.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and using the AT&T Executive Teleconference. You may now disconnect.