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UBS Commercial Real Estate Broker Analysis Summary

This report analyzes the US Real Estate broker sector, focusing on CBRE, Cushman & Wakefield (CWK), and Jones Lang LaSalle (JLL). Key points and conclusions drawn from the analysis are summarized below:

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Market Overview

• Commercial real estate brokers are experiencing a slow recovery following a strong Fiscal Year (FY) 2024.
• Uncertainties, including interest rate volatility, are expected to moderate revenue growth for FY 2025 compared to FY 2024.
• Industry data shows steady rebounds in leasing and capital markets, though transaction volumes are more muted than in cyclical recoveries.

Company-Specific Analysis

**CBRE (Continued Buy / $130 target)"

• EPS and revenue targets lowered due to market uncertainties.
• FY 25 EPS revised to $6.09 (+3% from previous),
• Earnings model forecasts improved growth in Facility & BOE segments, slower leasing revenue growth expected.
• Lower valuation multiple reflects increased market skepticism.

**Cushman & Wakefield (Neutral / $9 target)"."

• FY25 EPS revised down 7.5% to $1.01.
• Revenue growth lowered to 1%, primarily due to lower servicing revenue expectations.
• Outsourcing business continues to show resilience but faces CWK-specific issues.
• Price target reduced to $9, reflecting lower growth expectations.

### Jones Lang LaSalle (Buy / $30 target)

• FY25 EPS increased by 1% to $16.90.
  - Services segment growth moderated, but capital markets remained strong.
  - Price target lowered to $30 due to market risk re-rating.

Key Concerns for All Companies

- Capital markets and leasing growth is expected to decelerate in FY25 due to persistent macroeconomic uncertainty.
- Outsourcing businesses remain resilient, with long-term secular growth supporting growth.

## Valuation and Risk
- Valuation multiples compressed across the sector due to reduced growth expectations.
- Systemic risks include foreign currency exposure, occupier headcount consolidation, and competition for high-performing talent.

## Investment Outlook

• JLL Recommended as Buy, driven by strong capital markets performance.
• CBRE and CWK rated as Neutral, reflecting slower recovery dynamics.
• Investors should focus on service line diversification and resilience amid persisting economic headwinds.

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Key Takeaway

Market sensitivity is heightened due to macroeconomic factors, leading to cautious brokerage sector outlooks. JLL stands as the strongest performer among the three, while CBRE and CWK face pressure on growth assumptions.

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