Colliers International (NASDAQ: CIGI) is one of the handful of commercial real estate brokers and managers with a significant worldwide presence and a well-established record of performance as a publicly held company. The Toronto-based firm's business includes capital markets, corporate solutions, landlord and tenant representation, occupier services, project and real estate management, and valuation and advisory services.
Colliers already is one of the more familiar names in its space. For potential investors, here's a closer look at Colliers International, including details on its past, performance, and plans for the future.
Colliers International company profile
Colliers International was founded in Australia in 1978 and has been operating independently as Colliers International Group Inc. since separating from FirstService Corp. (NASDAQ: FSV) in June 2015. Colliers now is a commercial real estate brokerage with diversified professional services and investment management activities around the world.
"With operations in 68 countries, our more than 15,000 enterprising people work collaboratively to provide expert advice to maximize the value of property for real estate occupiers, owners, and investors," the company says on its website.
Colliers currently makes about 40% of its money from outsourcing and advisory services, 29% from leasing, 25% from capital markets, and 6% from investment management. Now with 2 billion square feet and $36 billion in assets under management, the company has grown both organically and through strategic acquisition intended to build higher recurring and contractual revenue streams that will make the company stronger and more resilient.
There were four acquisitions in 2019, including Colliers Charlotte, Colliers Virginia, Colliers Sweden, and Synergy Project Management, a market leader in India, and the company has a significant stake in Harrison Street Real Estate Capital, a global investment manager specializing in education, healthcare, storage, and social infrastructure.
Then in 2020, Colliers bought controlling interest in the Minneapolis-based Dougherty mortgage funding and insurance operation and New Jersey-based Maser Consulting, a multidiscipline engineering design service firm, and the Colliers Nashville brokerage.
The company also touts its commitment to new property management innovation and technologies -- including through its Proptech Accelerator program -- and provides specialized research and advisory services in a variety of segments and markets. (Check out Colliers' "Insights" page for a sample of reports available to the public.)
Colliers International news
After crossing the $3 billion mark in revenues for the first time in 2019, Colliers, like many others in the commercial real estate market, has had a rough go of it so far in 2020. The company's year-to-date revenue as of the third quarter was down 12% to $1.87 billion compared to the first nine months of 2019 and earnings per share over the same time period were down 11% to $2.35.
Colliers is still turning a profit, just not as much. Adjusted net earnings for the first three quarters of 2020 were $98.8 million, down from $105.9 million in the first three quarters of 2019.
Leasing took the biggest hit, dropping 28% in the first nine months of 2020 from the same period of 2019. A bright spot was Colliers' outsourcing and advisory business, which edged up 4% year-to-date from 2019. At $849.7 million, that was by far the company's biggest line of business for the period, followed by leasing at $471.0 million, capital markets at $423.6 million, and investment management at $128.9 million for the first three quarters of this year.
Chairman/CEO Jay Hennick said results have been better than first expected given the effects of the pandemic. The company also is wrapping up the final year of a five-year growth plan that had doubling its size as the goal. A new five-year plan was promised, but that was before the pandemic. For now, in the third-quarter report, Hennick said, "Looking forward, we see a great opportunity to accelerate our growth by aggressively adding quality talent, expanding our service capabilities, and streamlining our business processes."
Colliers International stock price
Colliers is in a competitive segment, including the three largest publicly traded commercial real estate services brands CBRE Group (NYSE: CBRE) with $7.1 billion in 2019 revenue, Cushman & Wakefield (NYSE: CWK) with $8.8 billion in 2019 revenue, and Jones Lang LaSalle (NYSE: JLL) at $18 billion in 2019 revenue.
For its part, Colliers' high point of just more than $3 billion in revenue in 2019 capped a run of 17% CAGR in that metric since 2004 while at the same time notching adjusted EBITDA growth of 22%.
The company also touts a CAGR of about 20% in total return over the past 25 years while it grew internally by decentralizing operations and investing in "talent, technology, and insight" and externally by acquiring and integrating the results of its more than $2 billion spent on 88 acquisitions in the past 15 years since it split from FirstService (NASDAQ: FSV).
The company's stock hit its highest historically adjusted point ever at $90.76 per share on Feb. 18, 2020, just as COVID-19 was being felt in the United States, and plunged to $33.93 before bouncing back to its 52-week average of about $65 a share in October.But debt doesn't appear to be an issue. Colliers reported $129.2 million in cash on hand on Sept. 30 and total debt of $643.9 million, and a leverage ratio of a conservative 1.5X at that point. It also had $606 million in unused credit under its revolving credit facility maturing in April 2024.
The bottom line on Colliers International
Colliers last declared a dividend of $0.05 a share in May, following up on the same payout in January. That gives it a yield of about 0.14% based on its late October stock prices, but keep in mind, this is not a real estate investment trust (REIT). The company doesn't have to pay out most of its net income to stockholders.
Colliers International is more of a growth stock to consider. The company mentions frequently in its various publications that insiders hold about 40% of its stock, so there's incentive there to build value, and its diverse solutions and global presence give it the ability to capitalize on what it calls "opportunities to diversify into social and other horizontal infrastructure." Just one example is its commitment to engineering, consulting, and design services in real estate, which it calls the largest end market for that sort of work.
As for the pandemic, "With a proven track record, highly diversified and balanced business, strong balance sheet, unique corporate culture, and significant inside ownership, we are confident Colliers will emerge from this crisis stronger and more resilient than ever," CEO Hennick said in the third-quarter earnings report.
The company's history of growth and return lends credence to that confidence for real estate investors considering buying in.