CBRE Group CBRE Business Risk Report

A. Economic downturn impacting real estate demand: CBRE Group could face reduced demand for commercial real estate services during economic downturns. Such periods often lead to decreased investment in real estate from businesses, impacting CBRE’s revenue sources.

B. Increased competition in the commercial real estate industry: The commercial real estate sector is highly competitive, with numerous firms seeking to increase their market share. CBRE Group competes with both international and local entities, which could pressure pricing and market positioning.

A. Foreign exchange fluctuations affecting revenue from international operations: As a global company, CBRE Group is susceptible to risks associated with currency exchange rate fluctuations. Changes in foreign exchange rates could unfavorably affect the financial results of their international operations.

B. Interest rate volatility impacting financing costs: Interest rate changes can significantly impact CBRE’s financing costs, particularly for their property development and investment activities. Rising rates increase borrowing costs and can dampen the overall growth of the real estate market.

A. Cybersecurity threats leading to data breaches: CBRE Group, utilizing vast amounts of sensitive client data, is at constant risk of cybersecurity threats and potential data breaches, which could undermine client trust and lead to significant financial losses.

B. Regulatory compliance challenges in different global markets: Operating globally, CBRE must comply with diverse regulatory environments, which can vary significantly by region. Non-compliance risks could lead to fines, sanctions, and damage to reputation.

A. Mergers and acquisitions integration risks: CBRE Group’s growth strategy includes mergers and acquisitions, which come with integration risks. These include cultural misalignment and potential disruptions in ongoing operations.

B. Dependence on key clients for a significant portion of revenue: CBRE’s significant reliance on a few large clients could pose a risk if any of these clients choose to reduce their portfolio, potentially leading to substantial revenue loss.

A. Damage to the company’s reputation due to ethical misconduct: Any act of ethical misconduct by CBRE or its employees could lead to severe damage to its reputation, affecting customer trust and potentially leading to a decline in business.

B. Social media backlash impacting brand perception: Negative perceptions disseminated through social media could rapidly damage CBRE’s brand reputation, affecting client relationships and business opportunities.

A. Diversification of service offerings and geographic presence to mitigate market risks: CBRE is diversifying its service offerings and expanding into new geographic areas to reduce dependency on specific markets and enhance resilience against economic fluctuations.

B. Hedging strategies to minimize financial risks from foreign exchange and interest rate fluctuations: CBRE employs hedging strategies to manage risks related to foreign exchange rate and interest rate volatility, helping stabilize financial outcomes.

C. Implementation of robust cybersecurity measures and regular auditing to address operational risks: The company has invested in enhanced cybersecurity infrastructure and conducts regular audits to protect against data breaches and secure client information.

D. Ongoing compliance monitoring and training programs to manage regulatory risks: CBRE has established compliance teams and ongoing training programs to ensure adherence to international and local regulations across its operations.

E. Comprehensive due diligence and integration planning for M&A activities to mitigate strategic risks: CBRE conducts thorough due diligence and detailed integration planning when engaging in mergers and acquisitions to ensure smooth transitions and value realization.

F. Customer diversification and strong management of client relationships to reduce dependency risks: Efforts are underway at CBRE to diversify its customer base and strengthen client relationships to mitigate risks associated with dependency on key clients.

G. Establishment of ethical guidelines and employee training programs to safeguard against reputational risks: CBRE is committed to ethical business practices, backed by strong guidelines and regular employee training aimed at preventing ethical breaches.

H. Proactive social media monitoring and swift response mechanisms to address reputational risks: CBRE proactively monitors social media channels and has established mechanisms to quickly respond to and address any emerging reputational issues.