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Actionable news in CBG: CBRE GROUP Inc,

CBRE: 400 South Hope Street Floor

The following excerpt is from the company's SEC filing.

Los Angeles, CA 90071

www.cbre.com

FOR IMMEDIATE RELEASE

For further information:

Steve Iaco

Senior Managing Director

Investor Relations & Corporate Communications

212.984.6535

CBRE GROUP, INC. REPORTS STRONG FINANCIAL

RESULTS FOR FIRST-QUARTER 2016

Revenue up 39% (42% local currency)

Fee Revenue up 25% (28% local currency)

GAAP EPS of $0.24; Adjusted EPS of $0.36

Los Angeles, CA April 28, 2016 CBRE Group, Inc. (NYSE:CBG) today reported strong financial results for the first quarter ended March 31, 2016.

F irst-Quarter 2016 Results

Revenue for the first quarter totaled $2.8 billion, an increase of 39% (42% local currency(1)). Fee revenue(2) increased 25% (28% local currency) to $1.8 billion. The first quarter of 2016 included approximately $654 million of revenue from the acquired Global Workplace Solutions business. Excluding the acquired Global Workplace Solutions business, revenue and fee revenue were both up 7% (10% local currency).

On a U.S. GAAP basis, net income and earnings per diluted share decreased to $82.2 million and $0.24, respectively. GAAP net income for the first quarter of 2016 was affected by $17.0 million of acquisition-related non-cash amortization, $11.6 million of integration costs associated with the Global Workplace Solutions acquisition, as well as $8.8 million incurred in the cost elimination program that the company referenced in its fourth quarter 2015 earnings release.

Adjusted net income(3) rose 14% to $120.8 million, while adjusted earnings per share improved 13% to $0.36.

Foreign currency movement, primarily the impact of marking to market of currency hedges, reduced earnings per diluted share and adjusted earnings per diluted share, by approximately $0.04 as compared to the prior-year first quarter.

EBITDA(4) rose 3% to $252.6 million and Normalized EBITDA(4) increased 15% to $282.7 million. EBITDA and Normalized EBITDA were negatively impacted by $21.1 million and

All percentage changes versus prior-year periods throughout this press release are in U.S. dollars, except where noted.

$22.0 million, respectively, of currency movement, primarily the marking to market of currency hedges in the first quarter of 2016 versus the first quarter of 2015.

Normalized EBITDA margin on fee revenue was 15.6%.

Management Commentary

We started 2016 with very strong performance, said Bob Sulentic, CBREs president and chief executive officer. Our people around the world worked together to again produce double-digit revenue and adjusted earnings per share growth, despite significant negative effects from currency hedges in the quarter. Without this impact, adjusted earnings per share would be up 25%.

Mr. Sulentic added: CBRE continues to achieve market share gains by attracting and developing top talent and enabling them to leverage our powerful platform to provide superb insight and value to our clients. Earlier this month,

Forbes

named CBRE the 15th best employer in America, reflecting the strength of the companys culture.

Revenue growth was strong in each of CBREs three global regions. The Americas, the companys largest business segment, saw revenue increase 29% (30% local currency). In EMEA (Europe, the Middle East & Africa), revenue rose by 72% (79% local currency) with all countries posting gains, highlighted by The Netherlands, Spain and the United Kingdom. In Asia Pacific (APAC), India and Japan were the catalysts for a 48% (54% local currency) increase in revenue.

Global leasing was exceptionally strong during the first quarter as revenue surged 15% (18% local currency). The United States set the pace, with revenue up 20%, driven by a number of large transactions. A broad range of countries also generated strong growth, including Canada, France, India, Italy and Japan. The United Kingdom showed growth of 7% (16% local currency).

The occupier outsourcing business line continued to benefit from strong underlying growth drivers, augmented by contributions from the acquired Global Workplace Solutions business. Excluding contributions from this acquisition, fee revenue improved 11% (17% local currency), with all three regions posting double-digit growth in local currency. (Note: leasing and sales revenue generated by contractual occupier clients is recorded in our leasing and sales revenue categories.)

On a global basis, property sales revenue grew 7% (9% local currency) with notable growth outside the United States. APAC registered the strongest growth with revenue up 12% (18% local currency), paced by Japan. Strong gains in France, The Netherlands and Spain as well as growth in the United Kingdom resulted in a 4% (11% local currency) revenue increase in EMEA. The Americas saw revenue rise 6% (7% local currency). Commercial mortgage services revenue increased 3% (same in local currency), driven by higher loan origination volumes with banks.

Development Services also posted very strong revenue and earnings growth.

Projects in process in this business totaled $7.1 billion, up $1.6 billion from the first quarter of 2015. The pipeline inventory totaled $3.1 billion, down $0.5 billion from a year ago, as development projects converted from pipeline to in-process. In the Global Investment Management business, Assets Under Management totaled $89.7 billion at the end of the first quarter 2016. This represents an increase of $0.7 billion from year-end 2015 or $0.3 billion in local currency.

The first quarter results reflect the ongoing evolution of CBREs business base toward more stable revenue. Contractual fee revenue accounted for 46% of total fee revenue in the current quarter up from 39% in the first quarter of 2015. Contractual fee revenue, plus leasing, rose to 74% of total fee revenue from 70% during the prior-year period.

First-Quarter 2016 Segment Results

The following tables present highlights of CBRE segment performance during the first quarter of 2016 (dollars in thousands):

Asia Pacific

% Change from Q1 2015

Q1 2016

1,583,559

847,498

308,524

1,068,861

447,389

192,689

Fee revenue, excluding GWS

950,809

343,197

158,353

173,338

15,214

10,654

187,387

27,716

12,790

Global Investment Management

Development Services

90,380

16,773

21,536

31,875

22,915

First-quarter 2016 results were impacted by select items including acquisition-related integration expenses and charges associated with cost elimination actions. The company does not normalize for currency movements, including gains or losses from currency hedging. Accordingly, EBITDA and Normalized EBITDA were negatively impacted by foreign currency movements, primarily the marking to market of currency hedging. This reduced the current quarter Normalized EBITDA relative to the first quarter of 2015 as follows: Americas $4.9 million; EMEA $5.4 million; Asia Pacific $7.0 million; and Global Investment Management $4.7 million.

Business Outlook

We are very encouraged by our strong start to 2016, Mr. Sulentic said. As we look ahead, it is important to remember that the first quarter is typically our seasonally lightest quarter for revenue and earnings. As always, we caution against using the first quarter as a barometer of full year performance. However, our business has positive momentum and the macro environment while more cautious than a year ago remains generally supportive, with consensus forecasts calling for continued modest economic growth in the U.S. and globally.

to expect adjusted earnings-per-share in the range of $2.27 to $2.37

for full-year 2016

13% year-on-year growth at the mid-point of the range.

Conference Call Details

The Companys first-quarter earnings conference call will be held today (Thursday, April 28, 2016) at 8:00 a.m. Eastern Time. A webcast, along with an associated slide presentation, will be accessible through the Investor Relations section of the Companys website at www.cbre.com/investorrelations.

The direct dial-in number for the conference call is 877-407-8037 for U.S. callers and 201-689-8037 for international callers. A replay of the call will be available starting at 1 p.m. Eastern Time on April 28, 2016, and ending at midnight Eastern Time on May 5, 2016. The dial-in number for the replay is 877-660-6853 for U.S. callers and 201-612-7415 for international callers. The access code for the

replay is 13633047. A transcript of the call will be available on the Companys Investor Relations website at www.cbre.com/investorrelations.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the worlds largest commercial real estate services and investment firm (in terms of 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.

The information contained in, or accessible through, the Companys website is not incorporated into this press release.

Note: This release

contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our future growth momentum, operations, financial performance (including adjusted earnings per share expectations), market share, and business outlook. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Companys actual results and performance in future periods to be materially different from any future results or performance suggested in forward-looking statements in this release. Any forward-looking statements speak only

as of the date of this release and, except to the extent required by applicable securities laws, the Company expressly disclaims any obligation to update or revise any of them to reflect actual results, any changes in expectations or any change in events. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements.

Factors that could cause results to differ materially include, but are not limited to: disruptions in general economic and business conditions, particularly in geographies where our business may be concentrated; volatility and disruption of the securities, capital and credit markets; interest rate increases; the cost and availability of capital for investment in real estate; clients willingness to make real estate or long-term contractual commitments and other factors affecting the value of real estate assets, inside and outside the United States; foreign currency fluctuations;

increases in unemployment and general slowdowns in commercial activity

trends in pricing and risk assumption for commercial real estate services

the effect of significant movements in average cap rates across different property types; a reduction by companies in their reliance on outsourcing for their commercial real estate needs, which would affect our revenues and operating performance; client actions to restrain project spending and reduce outsourced staffing levels; declines in lending activity of Government Sponsored Enterprises, regulatory oversight of such activity and our mortgage servicing revenue from the U.S. commercial real estate mortgage market; our ability to diversify our revenue model to offset cyclical economic trends in the commercial real estate industry; our ability to attract new user and investor clients; our ability to retain major clients and renew related contracts; our ability to leverage our global services platform to maximize and sustain long-term cash flow; our ability to maintain EBITDA margins that enable us to continue investing in our platform and client service offerings;

our ability to control costs relative to revenue growth;

variations in historically customary seasonal patterns that cause our business not to perform as expected; changes in domestic and international law and regulatory environments (including relating to anti-corruption, anti-money laundering, trade sanctions, currency controls and other trade control laws), particularly in Russia, Eastern Europe and the Middle East, due to the rising level of political instability in those regions; our ability to identify, acquire and integrate synergistic and accretive businesses;

costs and potential future capital requirements relating to businesses we may acquire; integration challenges arising out of

companies we may acquire

; our ability to retain and incentivize producers; the ability of our Global Investment Management business to maintain and grow assets under management and achieve desired investment returns for our investors, and any potential related litigation, liabilities or reputational harm possible if we fail to do so; our ability to manage fluctuations in net earnings and cash flow, which could result from poor performance in our investment programs, including our participation as a principal in real estate investments; our leverage under our debt instruments as well as the limited restrictions therein on our ability to incur additional debt, and the potential increased borrowing costs to us from a credit-ratings downgrade;

litigation and its financial and reputational risks to us; the ability of CBRE Capital Markets to periodically amend, or replace, on satisfactory terms, the agreements for its warehouse lines of credit; our exposure to liabilities in connection with real estate advisory and property management activities and our ability to procure sufficient insurance coverage on acceptable terms; liabilities under guarantees, or for construction defects, that we incur in our Development Services business; our ability to compete globally, or in specific geographic markets or business segments that are material to us; our and our employees ability to execute on, and adapt to, information technology strategies and trends; our ability to comply with laws and regulations related to our global operations, including real estate licensure, tax, labor and employment laws and regulations, as well as the anti-corruption laws and trade sanctions of the U.S. and other countries

our ability to maintain our effective tax rate at or below current levels;

and the effect of implementation of new accounting rules and standards.

Additional information concerning factors that may influence the Companys financial information is discussed under Risk Factors, Managements Discussion and Analysis of Financial Condition and Results of Operations, Quantitative and Qualitative Disclosures About Market Risk and Cautionary Note on Forward-Looking Statements in both our Annual Report on Form 10-K for the year ended December 31, 2015, as well as in the Companys press releases and other periodic filings with the Securities and Exchange Commission (the SEC). Such filings are available publicly and may be obtained on the Companys website at

or upon written request from CBREs Investor Relations Department at investorrelations@cbre.com.

Note CBRE has not reconciled the (non-GAAP) adjusted earnings per share guidance included in this release to the most directly comparable GAAP measure because this cannot be done without unreasonable effort.

The terms fee revenue, adjusted net income, adjusted earnings per share (or adjusted EPS), EBITDA and Normalized EBITDA, all of which CBRE uses in this press release, are non-GAAP financial measures under SEC guidelines, and you should refer to the footnotes below as well as the Non-GAAP Financial Measures section in this press release for a further explanation of these measures. We have also included in that section reconciliations of these measures in specific periods to their most directly comparable financial measure calculated and presented in accordance with U.S. GAAP for those periods.

Local currency percentage change is calculated by comparing current-period results at prior-period exchange rates versus prior-period results.

(2) Fee revenue is gross revenue less both client reimbursed costs

largely

associated with employees that are dedicated to client facilities and subcontracted vendor work performed for clients.

Adjusted net income and adjusted earnings per share (or adjusted EPS) include the impact of adjusting the provision for income taxes to a normalized rate as well as exclude the effect of select charges from U.S. GAAP net income and U.S. GAAP earnings per diluted share. Adjustments during the periods presented

included the write-off of financing costs on extinguished debt, amortization expense related to certain intangible assets attributable to acquisitions, integration and other costs related to acquisitions, cost containment expenses and certain carried interest incentive compensation expense (reversal) to align with the timing of associated revenue.

(4) EBITDA represents earnings before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization. Amounts shown for Normalized EBITDA further remove (from EBITDA) the impact of certain cash and non-cash charges related to acquisitions, cost containment expenses and certain carried interest incentive compensation expense (reversal) to align with the timing of associated revenue.

OPERATING RESULTS

FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015

(Dollars in thousands, except share data)

Three Months Ended

2,846,734

2,052,503

Costs and expenses:

Cost of services

2,013,613

1,290,777

Operating, administrative and other

635,838

550,184

Losses (gains) on currency hedges

(18,409

Depreciation and amortization

86,994

69,846

Total costs and expenses

2,743,973

1,892,398

Gain on disposition of real estate

Operating income

107,580

160,105

Equity income from unconsolidated subsidiaries(1)

57,301

15,451

Other income

Interest income

Interest expense

34,790

26,214

Write-off of financing costs on extinguished debt

Income before provision for income taxes

134,765

150,041

Provision for income taxes

50,125

56,903

Net income

84,640

93,138

Less: Net income attributable to non-controlling interests

Net income attributable to CBRE Group, Inc.

82,167

92,937

Basic income per share:

Net income per share attributable to CBRE Group, Inc.

Weighted average shares outstanding for basic income per share

333,992,935

331,976,907

Diluted income per share:

Weighted average shares outstanding for diluted income per share

337,506,232

335,698,590

252,617

246,288

Equity income from unconsolidated subsidiaries includes $47.4 million and $11.8 million for the three months ended March 31, 2016 and 2015, respectively, attributable to Development Services but does not include related compensation. Both equity income and related compensation expense are included in EBITDA for that segment.

SEGMENT RESULTS

(Dollars in thousands)

2015(1)

1,227,616

1,099,391

787,117

Operating, administrative and other(2)

317,183

275,421

60,600

42,950

106,385

122,128

170,062

494,024

683,678

362,503

149,315

114,290

15,005

14,792

Operating (loss) income

18,183

Asia Pacific

208,366

230,544

141,157

67,281

52,747

10,616

14,462

Global Investment Management

110,224

72,390

70,753

11,370

31,860

38,045

Development Services

12,273

37,197

18,564

Operating loss

(16,193

(6,938

During 2016, we changed our methodology for allocating certain costs to our reporting segments, including stock compensation, currency hedging and certain intercompany transactions. Prior year amounts have been reclassified to conform with the current year presentation. Such changes had no impact on our consolidated results.

Operating, administrative and other expenses includes gains and losses on currency hedges.

As noted above, the following measures are considered non-GAAP financial measures under SEC guidelines:

Fee revenue

Net income attributable to CBRE Group, Inc., as adjusted (which we also refer to as adjusted net income)

Diluted income per share attributable to CBRE Group, Inc. shareholders, as adjusted (which we also refer to as adjusted earnings per share or adjusted EPS)

EBITDA and EBITDA, as adjusted (the latter of which we also refer to as Normalized EBITDA)

None of these measures is a recognized measurement under U.S. generally accepted accounting principles, or U.S. GAAP, and when analyzing our operating performance, readers should use them in addition to, and not as an alternative for, their most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. Because not all companies use identical calculations, our presentation of these measures may not be comparable to similarly titled measures of other companies.

Our management generally uses these non-GAAP financial measures to evaluate operating performance and for other discretionary purposes, and the Company believes that these measures provide a more complete understanding of ongoing operations, enhance comparability of current results to prior periods and may be useful for investors to analyze our financial performance because they eliminate the impact of selected charges that may obscure trends in the underlying performance of our business. The Company further uses certain of these measures, and believes that they are useful to investors, for purposes described below.

With respect to fee revenue: The Company believes that investors may find this measure useful to analyze the financial performance of our Occupier Outsourcing and Asset Services business lines and our business generally because it excludes costs reimbursable by clients, and as such provides greater visibility into the underlying performance of our business.

With respect to adjusted net income, adjusted EPS, EBITDA and Normalized EBITDA: The Company believes that investors may find these measures useful in evaluating our operating performance compared to that of other companies in our industry because their calculations generally eliminate the accounting effects of acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitionsand in the case of EBITDA and Normalized EBITDAthe effects of financings and income tax and the accounting effects of capital spending. All of these measures may vary for different companies for reasons unrelated to overall operating performance. In the case of EBITDA and Normalized EBITDA, these measures are not intended to be measures of free cash flow for our managements discretionary use because they do not consider cash requirements such as tax and debt service payments. The EBITDA and Normalized EBITDA measures calculated herein may also differ from the amounts calculated under similarly titled definitions in our credit facilities and debt instruments, which amounts are further adjusted to reflect certain other cash and non-cash charges and are used by us to determine compliance with financial covenants therein and our ability to engage in certain activities, such as incurring additional debt and making certain restricted payments. The Company also uses Normalized EBITDA and adjusted EPS as significant components when measuring our operating performance under our employee incentive compensation programs.

Fee revenue, which excludes from revenue client reimbursed pass through costs largely associated with employees that are dedicated to client facilities and subcontracted vendor work performed for clients, is calculated as follows (dollars in thousands):

Consolidated

Less: Pass through costs also recognized as revenue

1,030,642

597,363

1,816,092

1,455,140

Occupier Outsourcing

Revenue(1)

1,413,294

694,863

897,300

461,535

Fee revenue(1)

515,994

233,328

Property Mangement

250,674

252,459

133,342

135,828

117,332

116,631

(1) Excludes associated leasing and sales revenue.

514,698

369,361

858,255

400,109

170,119

323,905

115,835

57,883

150,483

Net income attributable to CBRE Group, Inc., as adjusted (or adjusted net income), and diluted income per share attributable to CBRE Group, Inc. shareholders, as adjusted (or adjusted EPS), are calculated as follows (dollars in thousands, except per share data):

Plus / minus:

Amortization expense related to certain intangible assets attributable to acquisitions, net of tax

17,016

11,109

Integration and other costs related to acquisitions, net of tax

11,643

Cost containment expenses, net of tax

Adjustment of taxes during the year to normalized rate

Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue, net of tax

(1,691

Write-off of financing costs on extinguished debt, net of tax

Net income attributable to CBRE Group, Inc. shareholders, as adjusted

120,845

105,953

Diluted income per share attributable to CBRE Group, Inc. shareholders, as adjusted

EBITDA and EBITDA, as adjusted (or Normalized EBITDA), are calculated as follows (dollars in thousands):

Adjustments:

Integration and other acquisition related costs

17,173

12,403

(2,772

EBITDA, as adjusted

282,683

246,729

EBITDA and EBITDA, as adjusted (or Normalized EBITDA), for segments are calculated as follows (dollars in thousands):

71,518

83,135

Interest expense, net

20,926

Royalty and management service income

(6,768

(5,084

27,062

42,830

10,691

173,275

Net loss attributable to CBRE Group, Inc.

(12,135

(10,288

11,447

Royalty and management service (income) expense

Net (loss) income attributable to CBRE Group, Inc.

(2,570

Royalty and management service expense

13,873

(Benefit of) provision for income taxes

(1,201

35,273

Net income attributable to CBRE Group, Inc.

18,070

12,936

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

Assets:

Cash and cash equivalents(1)

489,229

540,403

Restricted cash

63,372

72,764

Receivables, net

2,344,825

2,471,740

Warehouse receivables(2)

724,508

1,767,107

Property and equipment, net

528,350

529,823

Goodwill and other intangibles, net

4,550,202

4,536,466

Investments in and advances to unconsolidated subsidiaries

220,533

217,943

Other assets, net

914,116

881,697

Total assets

9,835,135

11,017,943

Liabilities:

Current liabilities, excluding those related to long-term debt

2,661,965

3,208,932

Warehouse lines of credit(2)

714,377

1,750,781

Revolving credit facility

280,000

Senior term loans, net

872,916

877,899

5.00% senior notes, net

789,453

789,144

4.875% senior notes, net

590,650

590,469

5.25% senior notes, net

422,017

421,964

Other debt

Other long-term liabilities

636,972

619,605

Total liabilities

6,968,437

8,258,873

Equity:

CBRE Group, Inc. stockholders equity

2,817,595

2,712,652

Non-controlling interests

49,103

46,418

Total equity

2,866,698

2,759,070

Total liabilities and equity

Includes $64.0 million and $70.2 million of cash in consolidated funds and other entities not available for Company use as of March 31, 2016 and December 31, 2015, respectively.

Represents loan receivables, the majority of which are offset by borrowings under related warehouse line of credit facilities.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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