Jay Hennick - Chairman and Chief Executive Officer John Friedrichsen - Chief Financial Officer.

Brandon Dobell - William Blair Stephen MacLeod - BMO Capital Markets Anthony Zicha - Scotiabank Mitch Germain - JMP Securities Michael Smith - RBC Capital Markets Marc Riddick - Sidoti Frederic Bastien - Raymond James.

Welcome to the Third Quarter Investor Conference Call. Today’s call is being recorded. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties.

Actual results maybe materially different from any future results, performance or achievements contemplated into the forward-looking statements.

Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the company’s annual information form as filed with the Canadian Securities Administrators and in the company’s Annual Report on Form 40-F as filed with the U.S.

Securities and Exchange Commission. As a reminder, today’s call is being recorded. Today is Friday, October 28, 2016. At this time for opening remarks and introductions, I would like to turn the call over to Chairman and Chief Executive Officer, Mr. Jay Hennick. Please go ahead..

Thank you, operator. Good morning, everyone and thanks for joining us for the third quarter conference call. I am Jay Hennick, Chairman and Chief Executive Officer. And with me today is John Friedrichsen, Chief Financial Officer. The conference call is being webcast and is available on the Investor Relations section of our website.

A presentation slide deck is also available there to accompany today’s call. Earlier today, Colliers International reported solid results for the third quarter despite challenging market conditions in the UK and Europe and very strong comparative results in the third quarter of 2015 when revenues were up an exceptional 25% over the prior year.

Revenues for this third quarter were up a further 10% over last year, while adjusted EBITDA was down 13% and adjusted earnings per share was $0.40 compared to $0.52 last year. The difference was very straightforward, significantly lower sales brokerage in the UK and Europe as a result of the slowdown surrounding Brexit as you might have expected.

Putting things into context, year-to-date for the 9-month period ended September 30 our consolidated revenues were up a total of 13% or 16% in local currency over a very strong 2015, while EBITDA was up 10% and earnings per share up 1%.

During the quarter, we completed three acquisitions, two in the Americas, one in the EMA, and immediately after the quarter end, we added a fourth in the UK, where we have remained committed to investing for the future in this important global marketplace.

Although, none were material, each was strategically important strengthening our operations, adding service lines and extending our geographic reach. We also appointed a new board member adding Canada’s former Prime Minister, Stephen Harper.

Prime Minister Harper brings a wealth of experience as a former G7 leader and will add important insights and relationships to Colliers globally. We look forward to the Prime Minister’s contribution in the years to come.

Operationally, during the quarter, the main story as I mentioned was the significant slowdown in lease brokerage in the UK and Europe, as you might have expected as I mentioned earlier. This was largely offset by lower margin outsourcing and advisory, which was still up 15% and lease brokerage was up 8%.

Uncertainty has historically created excellent strategic opportunities for our company and took advantage once again adding significant asset management and advisory services operations in France, with more than $2 billion of assets under management and we doubled the size of our project management and building consultancy practice in the UK.

Both of these strengthened our global platform, especially in the EMEA, a market that we continue to see excellent growth opportunities. In the Americas, growth was relatively flat during the quarter versus a comparative strong quarter in 2015, but we continue to see lots of activity in the marketplace.

Lending remains robust, foreign and institutional interest in real estate assets remain strong and yields on real estate assets continues to exceed other investment vehicles. Most importantly, we remain focused on creating value for Colliers’ shareholders over the long-term. Let’s all remember, one quarter is not a company made.

Our Enterprise 2020 plan is designed to double the size of our business over the next 5 years. We intend to accomplish this by continuing to grow our business annually at about 5% on average per year and augmenting our internal growth with prudent acquisition in an industry that continues to be right for consolidation.

With almost 25% of the equity of our company owned by our senior leadership key professionals, we are highly engaged and committed as a management team and perhaps most importantly have a loss of our own money on the table.

Over the past 12 years, Colliers has been the fastest growing top tier global real estate services company, returning more than 20% annually to our shareholders. Our proven and long-term track record is unique among our peers and it speaks volumes about the ability that we have to execute.

Looking ahead to the balance of 2016, assuming no material changes in the market and with a strong pipelines we currently have in place, we fully expect to exceed the record results we reported last year in the fourth quarter 2015 and to finish the year well ahead of last year as well.

Let me now turn things over to John to review our financial results for the quarter and we will then open things up for questions.

John?.

Thank you, Jay. As announced in our press release earlier this morning and highlighted by Jay in his opening remarks, Colliers International Group reported solid financial results in our third quarter relative to an exceptionally strong comparative third quarter of 2015, in which consolidated revenue growth and local currencies was up 25%.

I will address our overall consolidated financial results for the quarter, our operating results by region, as well as our capital usage and financial position.

So, for our third quarter 2016, consolidated revenues increased to $462 million, up 11% in local currencies from $421 million – $420 million in the third quarter of 2015 to 1% of our growth generated internally and the balance from acquisitions. Total revenue growth for the quarter in our U.S. dollar reporting currency was 10%.

Adjusted EBITDA for the quarter totaled $37.6 million versus $43 million reported in Q3 last year, a decline of 13%, while margins declined 8.1% compared to 10.2% last year. And adjusted earnings per share came in at $0.40, down from $0.52 in our third quarter of last year.

Our adjustments to GAAP EPS and arriving at adjusted EPS are outlined in our press release issued this morning and are composed primarily of non-cash charges that we view is largely unrelated to our operating results and are consistent with those outlined historically.

Also please note that the year-over-year percentage changes to the following are in reference to local currencies. Turning to our operating results, revenue of $462 million for the quarter was comprised of $134 million sales brokerage versus $129 million last year, up 3%.

While these brokerage revenue came in at $148 million compared to $137 million in Q3 2015, up 9%. Meanwhile, we generated $180 million in revenue from outsourcing and advisory services compared to $154 million last year, up 18%.

The more recurring revenues generated by our outsourcing and advisory services segment represented 39% of our overall revenues, up from 37% in Q3 of last year. Geographically, both revenues and adjusted EBITDA remain well balanced, with 56% of each being generated in the Americas compared to 53% and 51% respectively in Q3 of last year.

Turning to regions, in the Americas, revenues were $257 million, up 15% with all of the increase from acquisitions and a flat internal performance over a tough prior year comparison. Our sales brokerage and lease brokerage revenues were up 19% and 7% attributable to recent acquisitions.

Outsourcing and advisory revenues were up 21% led by a strong internal growth project management in both U.S. and Canada as well as property management, evaluation and appraisal services in the U.S.

Adjusted EBITDA came in at $22.6 million versus $22.8 million last year and a margin of 8.8% versus 10.2% last year negatively impacted by lower productivity and brokerage in the U.S. with smaller average transaction sizes and the shift in revenue mix towards lower margin with more stable outsourcing and advisory revenue.

Moving to EMEA, revenues came in at $107 million, up 4% versus last year with 5% from acquisitions, and a decline of 1% internally. Again, some exceptionally strong comparative quarter, in which revenue growth – in which revenue grew 67%, with 30% of that internally generated. Sales brokerage in our third quarter was down 40%, but our U.S.

sales brokerage operations negatively impacted by uncertainty following the recent Brexit referendum, while our German sales brokerage operations also saw a decline owing to a strong comparative last year and sometime which should reverse as we finished out the year.

Lease brokerage was up 15%, including a more than respectable 11% increase in the UK. Finally, outsourcing and advisory revenues were up 19% and led by strong growth in workplace solutions, primarily in France with solid growth in valuations in the UK and property management in both the Netherlands and UK.

Adjusted EBITDA was $4.5 million, down sharply from $13.2 million generated in Q3 of last year due primarily to the drop in higher margin sales brokerage revenue and a shift in the quarter to the lower margin outsourcing and advisory services revenue. Finally, in our Asia-Pacific region, revenues came in at $99 million, up 9%.

Revenue growth was all generated internally through contributions across all service lines. With leasing, sales and leasing brokerage revenues up 14% and 5% respectively, while outsourcing and advisory services revenues were up 10%. Adjusted EBITDA was $13.2 million, up from $8.7 million last year with our margin at 13.3% versus 9.8%.

Turning to our capital deployment and balance sheet, in our third quarter, capital expenditures totaled $5.6 million, up from $4.5 million last year bringing our year-to-date CapEx to $16 million flat for the prior period. Our estimated CapEx spend for 2016 is now in the $29 million to $32 million range.

We invested $36 million in acquisition activities during our quarter – during our third quarter, more then double the $16 million last year and bringing our year-to-date investment in acquisitions to $87 million versus $40 million for the 9-month period last year.

Our net debt position stood at $227 million at the end of the quarter and our leverage ratio expressed of net debt to adjusted EBITDA was 1.1x compared to 11.3x at the end of the third quarter last year. Subject to any additional investments and acquisitions of significance, we expect leverage to trend down during the fourth quarter to well below 1x.

First of our financial capacity with cash on hand and committed availability under our revolver, we had over $250 million of liquidity at quarter end, a level ample to fund operations and other capital investments, including acquisitions new to execute our growth strategy.

Looking across our global operations, our pipelines in most markets in which we operate currently reflect solid commercial real estate activity, which we expect to continue into Q4 with some degree about elevator risks, impacting sales brokerage activity and reaching such as the UK and the U.S., where the Brexit, the pending U.S.

Election continues to generate some market level uncertainty. We expect year-over-year FX headwinds to moderate in Q4, with the exception of the pound sterling, which will likely continue to be down 20% versus the prior year.

Despite these factors and a tough comparative based on a very strong Q4 2015, we expect our fourth quarter results to exceed those reported last year. That concludes our prepared remarks. And I would now like to ask our operator to open up the call to questions..

Okay, thank you very much. [Operator Instructions] Our first question comes from Brandon Dobell. Please go ahead..

Thanks. Good morning, guys..

Good morning..

I want to focus on the Americas for a second.

The mix of revenues this quarter versus last year third quarter was a little bit, but not too different, yet the margins came off 140 basis points, which seems like a little much given not much of a change in the mix and revenues, is there something else going on, on the service there investments, maybe not much contribution from acquisitions, but to the expense side of it, just trying to get a feel for why the – why the variance revenue mix versus margins as opposed to EMEA where there was a clear mix shift towards outsourcing so that would explain the margins better I guess?.

Yes, there is a few things happening. We spoke about certainly lower transaction size absent large transactions, which was generally tend to be more profitable, so we sell that during the quarter. We did have a bit of a shift towards more outsourcing and advisory, which is the lower margin as well.

And just in general, lower broker productivity and some elevated expenses on commissions..

Okay.

Are you guys seeing M&A multiples step up or I guess sellers could be a little bit more bold in their expectations for what kind of numbers selling out would generate?.

M&A multiples are very interesting, because there is sort of a level between large deals and smaller deals. And we are finding a bit of tick up on smaller deals, but not materially, but we – what we are seeing is a lot of interest, our pipelines for acquisitions are significant.

But what we are doing is we are structuring our acquisitions a little differently with more back-end downside protection so that we – as we have historically gotten what we paid for.

So, I would say acquisitions in the sub, let’s call it, $50 million revenue range are maybe up a quarter return of EBITDA, not to say that people don’t ask for higher acquisition prices.

But the larger deals are definitely up and especially those that are fully marketed and the expectations there are significantly higher than we have seen historically, but Colliers has never really been a business that has changed that marketplace, maybe we will get there at some point in the future, but we see just countless opportunities globally in the sub $50 million acquisition space.

And so, if we look at our average acquisition multiples say for ‘16 versus ‘15 it might be up a quarter turn..

Okay. And then John, couple of numbers questions.

Just to confirm how you guys are positioning things? You said revenues and profits 4Q would exceed last year as I am assuming that’s on an adjusted EBITDA and adjusted EPS basis, but just want to make sure that we are all in the same page there?.

Yes..

Okay, perfect.

And then some of the harder to model items, stock comp, those kinds of things in the tax rate, any commentary about where Q4 may come in relative to Q3 on some of those below the line items?.

I won’t comment specifically on the quarter, but just a general comment, the only thing that maybe slightly elevated versus what would be our tax rate. And just thinking about composition of earnings and obviously, we have been investing heavily in the U.S. with a slightly higher amount of U.S. revenues in our mix and profitability with U.S.

tax rate where it is, it would tend to have potential small increase in our overall tax rate, but maybe 1% over prior year..

Okay, got it, alright. Thanks. I will turn it back..

Okay. Thank you. Our next question comes from Stephen MacLeod. Please go ahead..

Thank you. Good morning..

Good morning Stephen..

Just wanted to – just take a bit of a deeper look at the European margins, can you just talk a little bit about why they were down so much, I know it was related to mix, but is the brokerage business that much more fixed costs relative to the Americas and Asia Pacific, is that the way you interpret that?.

Yes. I mean different model in Europe, so we have a very profitable sales brokerage revenues, which were down as we pointed out. And we do experience significance reverse operating leverage.

And unfortunately, that was kind of that revenue was offset with lower margin outsourcing and advisory revenue, which we expect that to be more profitable as we finish out the year. So it’s combinations of the two..

Okay.

And then as you sort of exit – exited Q3 and entered into Q4, is there any more visibility into what Brexit might hold for kind of the back half of 2016, but more importantly, heading into 2017?.

I don’t know there is more visibility right now. Stephen I would say that, my recent time there in October, I think everybody is continuing to get used with the idea is getting a lot of headlines. But it doesn’t appear to be any real slowdown in activity around general economic conditions, certainly a pause in real estate activity, which we saw.

But we expect that to come back and – but again, the other day, Q4 for us will be very heavily weighted towards the last month and a half, that usually is. So at this point, it’s a little bit early to determine exactly what the outcomes tend to be, but our pipelines reflect solid activity..

I would add a little bit there. Two things, number one, it’s interesting that lease revenues were up nicely in that region as were outsourcing and advisory, but sales brokerage was down.

And it’s down for a couple of reasons; one, the whole uncertainty around Brexit, but I think the currency fluctuation of the pound is having a real big impact on decisioning on buying and/or selling real estate. And so that’s another factor of that. I am not sure we are – we have been clear enough with today.

But I think it will continue to have appearing on the decisions going forward. Two weeks ago, there was a blip in the pound-sterling that impacts the desires for non – principally non-UK investor owners to buy or sell real estate. So, it has been an interesting ride and we will see what happens as UK takes the next step in the process.

But there are a lot of – there is a lot of interest both ways as the currency falls, there is calls coming from around from the world, let’s see what’s available and transactions that where people were considering are not going to generate the same level of U.S. proceeds, they are slowing down their decisioning. So there is uncertainty there for sure.

But it’s nice to see that leasing and outsourcing is strong. But I think there is a lot of pregnant activity in the UK and Europe as a result of Brexit. So we will see over the next two quarters..

Okay, that’s helpful.

And then just finally, on the outlook for 2017, I mean I know you haven’t formally issued sort of expectation or a target for 2017, but can you just comment a little bit about what we currently see today what reasonable starting point expectations are for top line growth, earnings growth, given where we are in the commercial real estate cycle?.

It’s – lot of people ask that same question. It’s very interesting. This year, putting aside the isolated event in relating to Brexit, there is a lot of activity going on virtually everywhere in the world.

It’s just not as strong as it was last year, so internal growth across the board, not just upon real estate – commercial real estate firms, but other firms as well has been relatively flat. We think currently our economists, our market leaders all believe ‘17 will be a growth year.

How much growth versus ‘16, we don’t know, but we are feeling – we are feeling bullish. And we also believe that there continues to be M&A opportunities – significant M&A opportunities out there, which could augment our internal growth.

We report both internal growth and acquisitions separately, which is somewhat unlike to some of our peers who report only growth quarter-over-quarter growth, which is both internal growth and acquisitions. So we have a long-term plan.

We are going to continue to strive to hit 5% on average over 5 years internal growth and we will make up the difference through acquisitions 8%, 9% on average. And I think we are in good shape on our long-term growth strategy..

Great. Thank you..

Okay. Thank you. [Operator Instructions] Our next question comes from Anthony Zicha. Please go ahead..

Hi, good morning gentlemen..

Good morning..

Jay, with regard to the quarter’s performance, is there any change in your thinking in terms of capital allocation for growth?.

Yes, there is actually. We want to accelerate our capital allocation for growth..

So that’s – okay.

And you are pretty confident about the pipeline and you will be able to make those accretive acquisitions, you don’t see any change in your roadmap going forward and actually you see it accelerating?.

The – as I just sort of alluded to that, the only change Anthony would be maybe more consolidation, more acquisition is sort of next year, for example than this year to make up for smaller internal growth, but it’s tuck-in, it’s consolidation, its integration.

And if we continued to strengthen our brand, market-by-market, extend our service lines, extend our geographic reach, we just have countless opportunities to do that. So the – internally, around the world for Colliers is, we have to accelerate our M&A activity just a little bit to make up for relatively flat growth in most – most markets..

Okay. And then Jay, do you believe that the weakness in Europe and concerning what’s going on with Brexit, that it did have any impact on the Americas market. And also can you give us a bit of color on the competitive landscape in the U.S.

and are you happy with your market share growth?.

I am sorry, the first question, I didn’t get, Anthony..

Yes. Jay, do you believe that there is any spill over from Europe and from the UK into the American markets kind of pushing it down causing a bit more uncertainty. And the second part to that question is what’s the competitive landscape now in the U.S.

and are you still maintaining your market share growth or are you seeing some acceleration in certain markets in terms of share?.

So, I mean the third quarter was a bit of a wake up call in a sense that there is uncertainty in so many places around the world and you are seeing it in our peers results and you are seeing in the number of other companies in related industries. You have got the U.S. election coming up. We will see what happens there.

There we seem to be something that is impacting overall results and I think it’s making investor all prudent in their investment decisions but because capital is available because international investors are looking for safe havens for their capital because real estate generates a higher return than other investment vehicles, I think it bodes well for the services that we perform for our client.

So yes, I am always worried about it but this is a long game and, always as you know more than most, this has been a long game for us. We are heavily invested in the business, it’s very hard to find a business like a commercial real estate where there is campus opportunities to grow and we see – continue to see campus opportunities to grow.

So I think that’s a healthy answer, wholesome answer to your first question. The second question is we do monitor our peer’s performance to the extent we can market by market. It is a little difficult where when we are showing internal growth, and acquisitions and our peers do not, so it’s very difficult to check apples-to-apples.

But we believe we are increasing our market share by market, some markets better than others.

Other markets we continue to have to work on, those are all opportunities as we see it and it’s being sort of the smaller of the players out there with the greater gaps if you will although we have a presence everywhere, we have just countless opportunities to fill gaps and fill service line, stuff like that.

So it’s a feel more than anything because the others don’t provide us with clarity but I believe we are increasing market share and I feel very good about our business..

Okay, great.

And my last question, in terms of all the M&A activity you plan, how high would you be comfortable in terms of leverage on your balance sheet?.

That’s a John question because he has a veto on that. So John, why don’t you answer that one..

Well we have been f pretty consistent with our perspective on leverage.

We are certainly operating a low leverage right now, which gives us the optionality if something larger was to come along but, you know I think we will be comfortable in taking our leverage in the 2 to 2.5 times range for something that was compelling and of course having visibility at that point and being able to deleverage our balance sheet, so we want to make sure that market conditions for such will be deleveraged and get back into service up to one and half times range where we like to operate generally..

Okay, thank you very much..

Thanks..

Thanks..

Okay, thank you very much. Our next question comes from Mitch Germain. Please go ahead..

Jay, just curious, you know the deal that you just did in France, I mean, is that something you know a segment that you are really looking to make a bigger push into as a management?.

Sorry the France or did you say the Middle East?.

No, just the French deal, in terms of the signal that maybe that’s a segment that you are really looking to be part [ph] you know more globally?.

Yes, I mean, as you know, we acquired that business two years ago. We have been expanding rapidly throughout Europe. Canada always had a very significant business and we started to grow a U.S. business in workplace solutions.

We see it as a big opportunity for us, France is a leader in that space and that's what attracted us to that business model and we think with the recent acquisition in France, it helps to balance the business a little bit more that’s for us an opportunity in France because the business is so heavily weighted towards workplace solutions, it adds, this recent acquisition adds property management, add asset management we still have a way to go in terms of adding a bigger practice in sales and lease brokerage which is a very small part of its business.

In the UK, we just added a very, very high quality business called Bollingbrook, they virtually doubled the size of our project management and workplace solutions business. They have been around for forever and any of their clients are clients that are pan European but they could really only provide the services in the UK.

So there's a movement upon now to extend services throughout Europe because we had that capability in virtually every market in Western Europe, so, again another opportunity for us to do continue to grow our business.

You know it’s a one step at a time approach but the beauty is multiple different real estate services serving high end and advising high-end client..

Right, I appreciate the commentary and then if I look at your M&A, the deals you’ve closed, you know, I think last 12 months, in your most recent presentation, you know obviously focuses Americas, I think, you know is Asia Pacific, is that just really a market where the growth is going to be through hiring or do you think there will be some M&A opportunities to consolidate that region?.

Well, that’s a very good question, Mitch, because Asia-Pacific has been – let’s not say the Pacific portion, Asia in particular, Australia, New Zealand for us has been right opportunities for acquisition and there's a couple in our pipelines today for example. But Asia has been more of an issue in terms of finding great prospects.

First of all, there is not as many as we would have in more mature markets. Secondly, some of the ones that we have gone down the road with are not of the quality that that we think will help us take our business to the next level. There are some larger ones there that might be – that might the available.

But generally speaking today, our focus and our management teams’ direction is drive internal growth and there is some very interesting opportunities for us to do that. And so until we find the right opportunity in Asia, we are going to just continue to drive internal growth. We had a good quarter this quarter, relative to the quarter last year.

Last year was – there was a little bit of noise around some of the management changes that we made there to strengthen our business, termination, recruiting costs. But you know, it’s nice to see their margins up around 14% and good growth. So the answer in a long way is there are fewer opportunities in Asia of the quality we need..

And when I look at that region for you guys, is it really more of a Australia, New Zealand or you have a really good presence across the Asia aspect as well?.

We have a good presence but it’s never good enough. You know, we got very strong operations in some major market cities.

We have gaps in others and even in the markets where we are generating significant revenue and profitability markets like Shanghai, in Hong Kong and Singapore there is still gaps in the service that we – the service lines that we offer there which means you know further opportunity for us to grow our business.

But you know as you know you followed this industry for so many years, it doesn’t matter whether it’s Asia or the U.S., there is always a market that has been in use where there is always a service line that can be expanded or extended and so, the role we have as managers is to continue to strengthen and strengthen and strengthen..

Great. And last from me, a couple of your peers have mentioned cost of hiring has grown. I know, you mentioned on the M&A side multiples up about a quarter. Is A, is that consistent with what you are seeing and you know B, is it slowing down your hiring effort? Cost of hiring is up and you know we have a very disciplined way of looking at it.

What we have been seeing in the last quarter or two, just don’t pencil in terms of returns. So, we have been relatively quiet there although this year our net recruits, is up materially over last year.

I think in the [indiscernible] will be a record year for us and we are focusing a lot in terms of recruiting around you know the people and is not and should not be about money.

It should be about being on a platform that’s enterprising and different and a platform where somebody does not slow down because of bureaucracy or has to split an important client one way or the other and join a firm like Colliers and have a much more significant role in the growth of a market or a client relationship or both..

Great. That’s it for me. Thank you..

Thank you. Our next question comes from Michael Smith. Please go ahead..

Thank you and good morning..

Good morning..

I was just wondering on sales brokerage, are you seeing any delays in closings because of the U.S.

election in the month of October, are there any issues with regards to that?.

It’s hard to measure it specifically against the U.S. election. I did make a comment that we have some larger transaction – we didn’t have a lot of large transaction to close in the third quarter. Our pipelines do have some and you know whether it’s, you know, specifically related to U.S.

election or certain tone or whether it’s other factors, we don’t really know. But you know I think that the uncertainty that M&A is from something like what we are going through a U.S. election year particularly one that has been as closely followed by the media is this one doesn’t really help the market conditions.

I think that you know once things were done and we all know November 8 or 9 or whatever the date is that will take out at least some of the uncertainty and then we will deal with whatever the outcome is, whoever the winner is whatever policies they have and so forth. But I think the backdrop remains notwithstanding the noise a very healthy U.S.

economy and I think that that order is well for transaction activity and I think all the factors tend to drive real estate activity where some in sales side or leasing side are intact..

So basically if there is any uncertainty would be or any delays, it’s more of a – the macro backdrop is there, maybe some delays but you are not expecting any changes in the level of business?.

Right, right..

So maybe I could just switch to the UK and Europe, and you know again on sales brokerage, so as I understand in July, I mean July was an okay month and August is a quiet month and I guess things sort of fell off in September and I think you referred to your pipeline as being pretty full.

Your pipelines are full, so I am just wondering, do you have, what level of –are you confident that the pipeline will translate into revenue, are deal starting to close?.

I think we are confident, I think, we are seeing some activity in October. The two-four activity tends to be heavily weighted from kind of mid-November on to the end of the year.

So we don’t have a lot of visibility right now around the bottom of transaction, but we are seeing some activity and you know, I think, if market conditions are generally stable and there is some type of aberration that comes out of these ongoing discussions around Brexit negotiation build for, we would expect those transactions to close.

So it’s not [indiscernible], UK as well and we did indicate in my comments about Germany which obviously very strong market for us and now we have a very strong pipeline serving us well which we would expect would be less impacted by either Brexit document that could be a beneficiary but I don’t think that….

So what happened in let’s say Q3, is that more of a – are the deals gone away or they just delayed if you had sort of put it in the majority of them in that bucket?.

Yes, based on our market intelligence, very, very few of them got away. Maybe you could count them on one hand. Certainly many transactions have Brexit clauses in them and you know, we see no block that if they use that just to extend the – extend our time for closing transaction. .

Okay, thank you. Very helpful..

You’re welcome..

Thank you. Our next question comes from Marc Riddick. Please go ahead..

Hi good morning..

Good morning..

I just wanted to touch on maybe some of the other sort of the general factors that could end up playing into the timing, the uncertainty in timing and want to get a sense of if some of the more traditional transactions that might take place in the very end of the fourth quarter, by the end of sort of flowing into early next year and whether or not you are getting any feedback or greater level of concerns around interest rates or whether or not there is any then maybe a lot of follow-up after that but why don’t we start there?.

I don’t believe that we are giving any – achieving any concern around the increased interest rates. I think that we are generally in a deflationary environment with the exception of the U.S. and the U.S.

federal reserves perhaps moving contrary to the rest of the world generally around interest rates albeit if there isn’t a increase, I think everybody anticipates that it will be very, very slow. I think that’s reflected in the market. I think that’s baked in and that is reflective of current activity levels.

So don’t expect that to have any – you can see the impact on velocity around transactions as we finish the year..

Okay. And wanted to get a sense of some of the safe haven transactions if you will, coming into the U.S. and Canada that we saw so clearly in the second quarter.

I wanted to get a sense of if you are getting any early indications as to what that type of mix might look like if you are getting sort of an early indications that that might continue going into early next year?.

I think it’s a little bit too early to tell where that’s sustainable or whether it’s kind of a bit of a knee jerk reaction to what was happening, maybe bit of risk management around those, our international investors looking to have an alternative safe haven, I don’t know whether that trend is going to continue or not.

At this point, it’s too early to indicate, we don’t have good intelligence on that..

Okay. And as far as the revenue pipeline, I was wondering if you could share what your views were as to focus an interest on the major markets versus maybe secondary markets, if you can give some color on there and whether that’s changed at all over the last few months? Thank you..

Well I think we have, we’ve seen an increased interest in the secondary market. I think to some extent, our results are a reflective of value, tend to have somewhat more transaction done in secondary markets. However, as we know, particularly in the U.S. secondary markets are huge when people segregate [indiscernible]..

Right..

And I think it’s indicative of the state of the U.S. economy and maybe some of the major markets where prices go a little bit extended, cap rates got depressed, I think some of that may be coming back in favor of you know better returns for investors.

So, I would say that that trend has persisted through 2016 and I think it’s indicative of the overall health of the U.S. economy..

Okay, great. Thank you very much..

Welcome..

Thank you. Our next question comes from Frederic Bastien. Please go ahead..

Thanks, guys. Just a bit on the last question and the comments you provided.

Are you suggesting that demand for your brokerage services in the Americas is generally a strong in the tier 1 markets as it is in medium and smaller sized markets?.

I would say that our demand for services is similar in each of these markets. I don’t think that we are differentiating our market position and in specific markets difference, market to market, but I don’t know if you could make a real delineation between sort of the largest of the markets and more secondary markets in terms of demand and services..

You know the only thing I would add there is, John, sort of commented about in a couple of times, the average size of the transaction is lower in the U.S.

this year than it was last year, which means that there are fewer bulk sales of portfolios and/or there are fewer large buildings that are being traded, so which would suggest that the larger – the more major markets, New York, for example, the more trophy properties have already traded and what’s happening now is the secondary properties, whether in major markets or in secondary markets are now trading at a different velocity.

So, we don’t report these numbers, but the number of transacts is actually up for us. It’s just the average size of those transactions. So, we are working harder to complete more transactions, but there is still good volume out there..

Thanks. Yes, that’s where I was getting at.

And what’s – I mean what do you expect the related impact on margins to be on a go-forward basis? I mean, if you are working harder, obviously, spending more resources should that put a bit of pressure on your margins in the Americas?.

I guess, all these being equal, one would say yes, but I think if we are looking at – looking at a change in an activity around deal size and other things. It’s up to us to try and figure out how to be more productive and trying to streamline and adjust our cost base that you recognized.

So, I think there is potentially some slight impact, but it wouldn’t be material..

Okay, thank you. That’s all I have..

Thank you. Our next question comes from Brandon Dobell. Please go ahead..

Yes, thanks guys. Just a quick follow-up, the acquisition in France, you talked about an asset management advisory firm and I know the industry kind of uses asset management in a variety of ways.

So, is this asset management like you are managing the actual facilities, the buildings or is it asset management in terms of what we would think of is obvious as company goes out and raises funds from institutions and then deploy those into buying buildings or maybe it’s the debt side of investment management, just a little more color there would be helpful?.

Yes, it’s the latter and it’s a company that acquires real estate for institutional investors and manages them during the light of the ownership. Sometimes it’s one institutional investor that will own a property.

Sometimes, it’s three or four that own the property, but we will buy the property and we will manage it, not property management, it’s interesting in brands. We can’t property managed, so it’s entirely asset managed. So, we originated the transaction. We can’t do leasing on it.

So, there is a leverage opportunity there for us, but a loss in France total asset to property managed a building that were asset managed..

Got it. Okay, that’s helpful. Thank you..

Okay, thank you. We have no more questions in the queue for now. [Operator Instructions] Thank you..

Okay. Well, if there is no further questions, I want to thank everyone for joining us on the third quarter conference call. And we are looking forward to a strong quarter – fourth quarter and finish to the year. So, we will speak to that. Thank you..

Ladies and gentlemen, this concludes the third quarter investor conference call. Thank you for your participation and have a nice day..