Welcome to the Colliers International Fourth Quarter Year-End Investors 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 may be materially different from any future results, performance or achievements contemplated in 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, Wednesday, February 12, 2020. And at this time, for opening remarks and introductions, I would like to turn the call over to the Global Chief Executive Officer and Chairman, Mr. Jay Hennick. Please go ahead, sir..

Thank you, Operator. Good morning, and thanks for joining us. As the operator mentioned, I'm Jay Hennick, Chairman and Chief Executive of the company. With me today is John Friedrichsen, Chief Operating Officer; and Christian Mayer, Chief Financial Officer. Before we begin, I'd like to congratulate both John and Christian on their recent appointments.

They're both well deserved, and they demonstrate, once again, the depth of our leadership team. So congratulations, guys. As always, this conference call is being webcast and available in the Investor Relations section of our website. A presentation deck is also available there to accompany today's call.

Earlier today, Colliers announced another solid year of revenue and earnings growth, with strong results across each of our service segments. For the quarter, revenues were $928 million, up 5% in local currency. Adjusted EBITDA was $144 million, up 10%.

And adjusted earnings per share came in at $2.01, up 14% against the very strong fourth quarter last year. For the full year, revenues topped the $3 billion milestone for the first time, up 10% over the prior year. Adjusted EBITDA was $360 million, up 18%. And adjusted earnings per share came in at $4.67 per share, up $0.14.

In a few minutes, Christian will have more to say about our financial results. Then John will offer his comments on our operating performance, after which we'll take some questions.

Last year, we completed a total of 4 acquisitions, including the strategically important acquisition of Synergy Project Management, the market leader in India, one of the fastest-growing economies in the world.

With this acquisition, we welcomed an exceptional team of professionals with deep institutional relationships that we expect to leverage significantly as we expand our operations in this important and growing market.

During the fourth quarter, we also announced an agreement to acquire Dougherty Financial, a leading debt finance and loan servicing platform in the U.S. The transaction is expected to close in the second quarter. And then in January, we acquired our former affiliate in Austin, Texas, adding another important market to our U.S. business.

Austin is one of the fastest-growing markets in the U.S. And as always, we expect to be able to accelerate its growth as a company-owned operation. As we enter the year, the fifth year and final year of our growth plan, we are well on track to meet or exceed our goal of doubling the size of the business by the end of 2020.

When we initially established this plan 5 years ago, many thought it was ambitious. In my view, growth plans always should be ambitious. At Colliers, we needed a target to provide us with a road map for the future to rally our troops around and to provide milestones against which we could measure our success.

We're currently working on our next 5-year plan, which we hope to announce this coming fall. I have little doubt that our 2025 plan -- our 2025 growth plan, don't know we're going to call it just yet, will be as ambitious as the last one. Going forward, we will continue to pursue internal growth as we have in the past.

And as you have seen, quietly, we have also been setting our sights on new and related growth engines that will strengthen our overall business for the future.

One example of this strategy in action is the acquisition 2 years ago of Harrison Street, which established Colliers as an important player in the real estate investment management business, primarily alternate investments.

Another example will be the acquisition of Dougherty, a company that provides commercial mortgage banking, debt financing and mortgage servicing. Both opened vast new opportunities for growth, and both will grow faster by being part of Colliers than they could have on their own.

And let's not forget something else, both also bring more recurring and contractual revenue streams to our platform, changing the composition and the fundamentals of our company for the future. Last year, Outsourcing, Advisory and Investment Management segment of our business represented about 44% of our overall revenues, up from 41% the prior year.

As we continue to grow our stable revenue streams, Colliers is slowly evolving into a different kind of professional services company. This year, we expect revenues from Outsourcing, Advisory and Investment Management to approach 50% for the first time.

With a higher percentage of stable revenue streams, the Colliers business model is much stronger and more resilient than ever. Our shareholders know that creating value has always been at the forefront of our efforts. That's because our leadership owns more than 40% of the equity in our company, far exceeding any of our publicly traded competitors.

Over the last 25 years, we've delivered compounded annual returns and share price of almost 20%. That record of performance is impressive by any standard and speaks volumes about our ability to continue to maximize the potential of our business in the future.

When you consider our well-known global brand, highly diversified global platform and more stable revenue streams than at any time in the past and you couple that with the massive growth opportunities we have, the significant free cash flow we generate, not to mention the proven track record I just spoke of, it is clear to me that Colliers is significantly undervalued, especially when you compare it to the attributes of other public companies.

But of course, I'll leave all of that to you to figure out for yourselves. There are remarkably few companies out there that have the quality and growth potential of a company like Colliers.

With that said and looking forward to the company -- the coming year, provided we have stable -- relatively stable market and geopolitical conditions, we remain confident that we will deliver again solid revenue and earnings growth in 2020. With that, let me turn things over to Christian for his comments.

Christian?.

Thank you, Jay. As announced earlier today, Colliers reported solid fourth quarter and full year financial results. My comments will follow the flow of the slides posted on the Investor Relations section of colliers.com to accompany this call.

Please note that my comments reference non-GAAP measures such as adjusted EBITDA and adjusted EPS, both of which are defined in our press release issued today as well as the accompanying slide presentation. The adjustments are composed primarily of noncash charges that we view largely as unrelated to our operating results.

All references to revenue growth are calculated based on local currency. Fourth quarter revenues were $928 million, up 5% over the prior year, with growth led by Outsourcing, Advisory and Investment Management. Consolidated adjusted EBITDA was $144 million for Q4 compared to $133 million, with our margin at 15.5% versus 15% in the prior year quarter.

Margin growth was led by the Americas and Asia Pac regions, as I will discuss in a moment. Quarterly revenues in the Americas totaled $486 million, up 2%, with internally generated revenues down slightly.

Americas Outsourcing & Advisory revenues were up 15% with continuing robust growth in each of project management, property management and valuations. Sales brokerage revenues were down 6% for the quarter relative to a very strong prior year quarter. Lease brokerage revenue was down 1%, also against a strong prior year quarter.

Adjusted EBITDA was $50 million, up 10% versus last year, with a 10.3% margin, up 70 basis points compared to last year, primarily due to lower costs and operating leverage. In the EMEA region, Q4 revenues were $226 million, up 6%, almost entirely from internal growth.

Outsourcing & Advisory revenues were down 8%, impacted by significantly lower project management revenues in our French workplace solutions business. Sales brokerage revenues, however, were up 18%, with significant contributions from Germany, the Netherlands and Spain.

Lease brokerage revenues were likewise up 18%, aided in part by the closing of transactions that were deferred from Q3 as we indicated on our Q3 conference call. Adjusted EBITDA for the region was $51 million compared to $49 million last year at a 22.7% margin, up 10 basis points from last year.

Asia Pacific region revenues were $172 million, up 11%, with 6% internal growth and the balance from the recent acquisition of Synergy, a leading project management firm in India. Outsourcing & Advisory revenues were up strongly at 18%, sales brokerage revenues were up 3% and lease brokerage revenues were up 9%.

Adjusted EBITDA was $32 million compared to $29 million last year with margins at 18.9%, up 70 basis points due to operating leverage. In our Investment Management operations, revenues were $45 million in Q4, up 15%, all from internal sources. Revenue growth reflected incremental management fees from new capital commitments in all fund products.

Assets under management stood at $32.9 billion as of December 31, 2019, up 25% from 1 year ago. Adjusted EBITDA for the quarter was $17 million versus $18 million in the comparative period and was impacted by investments to establish new fund products in both Europe and the U.S.

in 2020 as well as timing of transaction fee revenue in our legacy European operation. Our net debt position was $496 million as of December 31, 2019, compared to $545 million one year ago.

During the fourth quarter, our debt decreased $94 million as a result of an investment -- I'm sorry, our debt increased $94 million as a result of an investment in real estate assets to seed a new fund in Europe. We expect to transfer these assets off our balance sheet without gain or loss during the second quarter of 2020.

Our financial leverage expressed in terms of net debt-to-EBITDA was 1.4x for the quarter, down from 1.6x reported 1 year ago.

The reduction in leverage is attributable to debt repayment from operating cash flow as well as the proceeds from our accounts receivable facility completed earlier in the year, offset by the temporary increase in debt related to the real estate assets noted above.

In terms of financial capacity, with cash on hand and committed availability under our revolving credit facility, we had more than $700 million of liquidity at year-end, an amount sufficient to fund operations, capital investments and future acquisitions.

In terms of our 2020 outlook, we expect low- to mid-single-digit internal revenue growth in local currency, combined with growth from recent acquisitions for total revenue growth in the high single-digit percentage range.

We anticipate a full year adjusted EBITDA margin improvement of 50 to 80 basis points compared to 2019, including operating leverage and the favorable impact of the acquisition of Dougherty Financial, which generates higher margins than our consolidated average. We expect mid-teens percentage growth in adjusted EPS when compared to 2019.

This excludes the impact of any future acquisitions that maybe completed between now and the end of the year. Finally, during 2020, we expect to make incremental investments in our global capital markets and occupier services businesses to further expand these important revenue streams.

These costs are expected to be in the $12 million range and will be reported on separately going forward. John will discuss our capital markets and occupier services strategies in more detail shortly. That concludes my prepared remarks, and I'd now like to pass the call over to John..

drive more cross-border collaboration, leveraging our local knowledge and expertise across our global platform to increase the number of clients we serve and the amount of business we do with them.

In the fourth quarter, the size of capital markets transactions was larger than ever, particularly in Europe, as we made further inroads with institutional clients.

Despite the impact of Brexit, Colliers capital markets had a very strong fourth quarter 2019 in EMEA, with over 25 transactions valued at more than EUR 100 million and greater, an all-time high in aggregate investment volumes advised by our company, representing a diverse selection of market types and portfolios across a multitude of markets.

Looking ahead to 2020, we plan to make significant investments in both our global occupier services and our capital markets platforms, as Christian noted earlier.

These investments, which will mostly be made in the form of additional professionals, will deepen our expertise in client service capabilities, adding incrementally to leverage our existing global platforms and significantly increase the amount of revenue and multi-market referrals in the coming years.

These teams will be focused on identifying, servicing and retaining key global clients, providing a seamless interface with our local knowledge experts.

However, consistent with all capital allocation decisions at Colliers, these long-term investments will go through a dynamic and rigorous process to review, analysis and decision-making, to ensure we maintain our discipline and generate acceptable returns for shareholders.

That concludes my prepared remarks, and I would now like to turn the call back to the operator for questions.

Operator?.

[Operator Instructions]. And our first question comes from the line of George Doumet of Scotiabank..

Jay, your previous 2019 outlook called for low single-digit organic growth. For 2020, you guys are calling out low to mid.

So I'm just wondering where the modest incremental bullishness is coming from, maybe by activity or by geography?.

I have a view on internal growth, which I'm going to share with you, which is I don't think it really matters which geography we generate internal growth from a market perspective. Because what you really need to understand is what is the internal growth company-wide.

So I think the outlook that we provided is a good proxy for overall internal growth that we're expecting in 2020. We're hoping that these new investments that John described and Christian described to some degree will help accelerate our internal growth beyond what our expectations are.

But we are also looking forward to driving internal growth in our new growth engines that I talked about. So internal growth is going to be an interesting area for the company, especially in light of our planning for our growth plan 2025. So hopefully, that gives you a little color..

Okay. That's helpful.

And I guess, shifting over to the Investment Management segment, can you maybe quantify the level of investment we made in the quarter and, I guess, the go-forward nature of that investment? And do we expect it to be at that pace for the remainder of 2020 or into 2020, at least?.

George, it's Christian. Good question. We had some elevated costs in the fourth quarter in Investment Management in anticipation of the launch of a couple of fund products. Those fund products are now launched, and we don't expect the impact of those costs to be very significant going forward.

It's more of a step type process when we develop new funds, and this was just another step in the growth of the business..

That's helpful. And just one last one, if I may. On the coronavirus, obviously, pretty topical. Can you maybe help us frame the direct impact in Q1 from China? And maybe some commentary on what extent you expect it to spill over into other operations in the APAC region..

Sure, George. The Chinese business for us generates about $100 million of revenue per annum. Half of that revenue is property management, which is an extremely resilient revenue stream for us.

We are seeing a little bit of timing issues around some of our transactional revenue that could impact the quarterly pacing of what we're -- what we'll generate in China. But like I said, property management is a big part of that business, which is going to be resilient.

In terms of the other parts of Asia, Hong Kong is a small part of our overall business, and we could see some impact there, but it won't be significant in terms of the overall results..

Our next question comes from the line of Stephen MacLeod of BMO Capital Markets..

I just wanted to talk a little bit about the Dougherty business, which is a new -- which, Jay, you highlighted as sort of a new complementary business line.

Can you just talk a little bit about what benefits you expect this to bring to the table? And is there any difference in the underlying seasonality of Dougherty relative to the Americas business overall?.

number one, it has this -- it's called the DUS license, a designated underwriter under government-assisted loans. So we're able to -- we have the power of the pen in certain cases to fund senior housing, multifamily housing loans.

And so the opportunity for us, in part of the Dougherty business, is to be able to take all of the transactions that we currently do that are multifamily and seniors and student housing and affordable housing and provide debt as part of it.

So in addition to getting the brokerage fee on the placement of that debt, we would also earn the fees to originate that debt and then service it for a 20-year period. The beauty of Fannie Mae loans is that they are generally long term, 20-year type terms and so there's long-term servicing capability.

The other pieces of Dougherty that are very interesting is they themselves have a sort of a separate parallel that originates traditional debt on commercial real estate from banks, from institutions, from higher net worth individuals. So they have a number of real estate professionals, mortgage brokers operating across the country.

They're originating debt every day. Now they have an opportunity to access all the transactions that we use at Colliers. And so over the course of the next couple of years, the idea is to really penetrate our existing flow of business and be a debt provider on any transaction that is either bought or sold in any of our offices.

There's also a third piece of the business, which is a broker-dealer, which offers us yet further opportunities, although that's relatively small for us right now and not really worth talking about it until we're able to execute on our plan. But we're quite excited about the growth prospects for Dougherty.

It's not going to be without a lot of hard work to roll this through, to integrate it throughout Colliers, but the opportunity is significant on many fronts. So we're excited about it..

That's helpful.

And I guess, would you expect that the growth in Dougherty would roughly mimic the underlying Americas business?.

No. I think it's going to grow much more rapidly, it's my hope, because in addition to the Colliers business -- first of all, we don't do this today. So this is all net new growth, all -- what I just described is all net new growth. So we're hoping it's going to accelerate our growth by providing additional services and capabilities for our clients.

The other piece of the business, which is very interesting, if you recall, Harrison Street's focus is on seniors and students, and it dovetails beautifully into Dougherty's capabilities, and in particular, their ability to underwrite loans in the Harrison Street funds. So we see a big opportunity to penetrate that as well.

So I think that there's big growth opportunities that we'll experience from Dougherty as it integrates throughout our U.S. business and throughout the Harrison Street portfolios..

That's great. That's very helpful. And then maybe just turning to, John, some of your comments around occupier services and capital markets.

Can you just talk a little bit about what -- where the growth opportunities lie in the investments that you're talking about implementing in 2020? Just -- maybe just some more tangible color around what these investments do for you and provide for you?.

Sure. I mean, at the end of the day, it is very much a people-driven capabilities business. And we have spent, obviously, the last 15-plus years building out this global platform that we have, that we call Colliers. And along the way, obviously, we have local market capabilities and some top-notch professionals.

What we really haven't done to date is captured the collaborative opportunity of really focusing much more significantly on multi-market accounts.

And we certainly have some, as I've mentioned, but the opportunity for us now with some focused attention on this, some additional investment in capabilities, maybe some a little bit of technology, if that can help, is to really ramp up our capabilities. We have -- we're, in some respects, new to this business. And I think we're a breath of fresh air.

I think we came after this thing slightly differently, a lot less rigidly than some of our competitors. And we've been really delighted by the wins that we've generated to date, but we know that there's a lot more down the road.

And all it's going to take a lot of hard work, but some real focus on trying to drive global capabilities, demonstrating this to the market much through the success we've already had, ramping that up in a much more significant way.

And this is on the cusp of the 2025 plan and will really be a critical component of that as we mature our overall business..

Our next question comes from the line of Frederic Bastien of Raymond James..

First question, you've been gradually expanding your global service offering with companies like Harrison Street, Synergy and now Dougherty over the past couple of years.

Having said that, are there any attractive disciplines where you're currently subscale and where you'd like to significantly ramp up over the next few years?.

Well, I think I heard some of that, so I'll try and answer what I think I heard. Are we subscale in any areas? Absolutely. I mean, one of the great things about a global business is you're subscale in virtually every market, including those markets in which you have a dominant market position.

So I would say that we're subscale in debt as we just described in Dougherty. We do debt in Europe -- not in all markets in Europe, but in some of them. All of John's areas, occupier services, capital markets, we do a lot of it today. We have 1,000 professionals.

But as John said, do we -- are we able to take Asia money and allocate it in different geographic regions seamlessly? Our position to our clients would be yes. Has the process and plan been fully developed? I think we've got some work to do there.

So across-the-board, we have multiple opportunities to expand share, to develop additional services once we -- project management is another great example. We started in Canada. We have a $40 million, $50 million business in the U.S. out of nowhere. We just added Synergy, almost a $100 million business, in India.

In Asia, we now do something like $25 million or $30 million worth of project management, all from the example that was set initially in Canada.

So taking existing service lines where we operate well and transferring them to other geographic regions where there is a market for the services, that there's an opportunity to sell them and cross-sell them to our clients, all are part of the ethos that we're trying to create at Colliers..

Thanks for that very detailed answer.

On Dougherty, is the expertise portable to other global regions? Or would you need to acquire that expertise through M&A?.

It's probably more local. There's expertise, but there's all kinds of licensing. That's -- Fred, that's sort of part of the delay of the transaction. Not only there's multiple regulators that have to approve the transfer, including the U.S. government among other regulators. And so it's not as transferable as you would otherwise hope.

You need to be separately licensed in Canada, for example, and in other markets. But that doesn't mean to say that a tuck-in acquisition in other geographic regions that have the same types of qualities as Dougherty, which will be rebranded as Colliers mortgage, are all viable opportunities for us.

And so when I talk about the vast opportunities, it is mind-boggling in many ways that we just have so many opportunities for growth. The key for us is to be disciplined and apply great rigor to the moves that we make over the next few years. But if we're -- if we continue to manage our business one step at a time, I think there's lots we can do..

All right. Last question for me. Christian, you responded earlier to a question about the investment you made in your Investment Management platform, but I don't believe you quantified it.

Was it $1 million, $10 million or somewhere in between?.

In the range of $1 million, can be a bit more. And of course, we also had some timing in investment management fees in our European business. So that was the other driver of the variance in the quarter..

Our next question comes from the line of Stephen Sheldon of William Blair..

This is actually Josh sitting in for Stephen. And congrats as well to Christian and John. First, just wanted to ask....

Thanks, Josh..

Yes. You noted in your prepared remarks that you're benefiting from some strong operating leverage in the outsourcing business.

So I'm wondering if it's a specific service line within that segment? And what's the potential for that operating leverage to carry forward?.

property management, project management and evaluations consulting business. Will that continue? I think we have more room to go there, and we're pleased to see what we saw in 2019..

Good. And then within the Americas, I know that you did quite a bit of hiring in late 2018, early 2019.

So I'm wondering if you're still expecting to see some good productivity gains in the first half of this year from those producer hires? And then just generally speaking, wondering how sales pipelines look to start this year versus the beginning of last year?.

Yes. Definitely, we did some significant recruiting over the past couple of years. We started to see traction with that in Q3 and 4, and we definitely expect to see productivity gains as we roll into 2020..

Got you. Okay. And then I guess, last for me. Just curious where your comfort level sits right now with trailing leverage at 1.4 turns? Are you comfortable with that? I know you're balancing a few things right now.

And I guess, what's the expectation for capital allocation in the year ahead beyond some of the investments that you noted, of course?.

Yes. Jay can speak to the acquisition strategy going forward. But certainly, we're comfortable with 1.4x leverage, and we will generate significant free cash flow in 2020. We will naturally delever. And really, the driver will be our future deployment of capital into accretive acquisitions..

We always want to have sufficient dry powder. That's the way we've managed this business for all these years. We always want to have capital available if, as and when others run into trouble. But as Christian said, from our perspective, we're at relatively low leverage rate right now.

And -- but if we start to add to some of the acquisitions from our pipelines, we might look at doing some equity, but it all -- it's all predicated on opportunities that present themselves and so forth. So we'll always maintain a prudent leverage ratio. I'm sure John and Christian both come from a more prudent leverage ratio than I would.

But it's -- the Colliers' strategy has worked well for many years. So I don't think we're going to change much going forward..

Our next question comes from the line of Matt Logan of RBC Capital Markets..

Jay, you mentioned that the recurring revenues from Outsourcing & Advisory as well as Investment Management could reach 50% this year.

Can you tell us what that would be as a percentage of EBITDA? And maybe your thoughts on where you see that -- those percentages trending over the next 2 or 3 years?.

Well, that's a great question. I -- there's a real chance that the EBIT -- although revenues would be 50-50, that EBITDA might be 55%, 60% of the recurring revenues. We -- you're on a very interesting point that we discussed internally here quite a bit.

We actually generate more EBITDA from our recurring revenue streams than we do from -- I don't know how to describe this right.

From a percentage basis, when you look at the revenue percentage, because some of the recurring revenue streams, Investment Management, Dougherty, et cetera, have a higher EBITDA percentage margin than we actually generate more from our recurring pieces of our business than we do from the transactional side of our business.

So I hope that gives you a little color..

It certainly does.

And I guess, with Dougherty being a big part of your growth plan as well as Harrison Street, could we see that going from 55% to 60% up to maybe 70% or 75% in the near term? Or is that maybe part of the 2025 plan down the road?.

I think it's the 2025 plan. Look, we have a very viable and profitable transaction business globally, but it is becoming less as a percentage. But I think, over time, my goal, for sure, is to transform Colliers into a different type of professional services firm, as I mentioned in my prepared remarks.

I've been doing this for a long time and it is hard to find companies that have the same growth prospects that we do with the same percentage of recurring revenue, and this is one of them.

And sooner or later, the light will go on for some people and realize that the composition of our business, and frankly, some of our peers as well, are significantly undervalued relative to other companies that we analyze up there..

And maybe just lastly, in terms of the 2025 plan being just as ambitious as your last one, should we take that to mean that you plan to double the size of the business again by 2025?.

I wouldn't take it as that because, of course, we're a lot bigger today than we were then. But we might be able to double the profitability of the business over the next 5 years. But we still have a lot of work to do to get there.

But just if you run the profitability numbers out over that period of time, and I'm not committing to that, it's a huge, huge opportunity. And this company is global. This is global. And so there's opportunities with exceptional management teams in so many different parts of the world.

And as we look forward to 2025, there's lots of opportunities for us to add shareholder value..

Our next question comes from the line of Sumayya Syed of CIBC..

Just I wanted to touch on the leasing side. There was some deal timing impact that pushed some Q3 deals into Q4.

So did those come into our Q4 as you were expecting? Or are there any spillovers into Q1?.

Well, the transactions that we expected in Q4 closed in Q4. Of course, there's always a spillover and there were some transactions that would have been nice to close in Q4 that will happen in Q1. But to your question, the transactions that we had expected on our Q3 call, certainly, all that closed in Q4..

Okay. Great.

And then just sticking to leasing, just what are you seeing in terms of trends for office absorption maybe from a year ago? And how do you see that impacting the segment this year?.

It's John here. Look, I think it's a relatively healthy leasing market. I mean, certainly, there's challenges, but they're isolated. Calgary is an example of one that is challenging with the oversupply there. But I think, in most other markets, the balance between demand for space and that that's coming on is pretty much in check.

So we expect there to continue to be a relatively solid stream of leasing activity that we are going to benefit from an adviser clients on going into 2020..

Okay. Sounds good.

And then just moving on to the outlook for sales brokerage, obviously, comping against a very strong 2018, how do you see this segment shaping out in 2020?.

Sorry, you're talking specifically about sales brokerage?.

Yes, correct..

Look, I mean, again, prefaced on market conditions remaining consistent with where they are today. And as Christian indicated earlier, there's going to be situations, perhaps in Asia, where coronavirus is going to have a dampening impact, I think, probably short term, but certainly could impact parts of 2020 and delay some of the activity.

But I think if you look fundamentally at the demand for real estate and the amount of capital that's interested in being deployed into this asset class, which we've talked about before, and a secular trend around institutional ownership around real estate, we think we're in a good spot to continue to see activity.

And it may be a little bit lumpy from quarter-to-quarter, but I think the long-term trend remains intact. And that's one of the reasons that we're focused on building out this business for Colliers..

Okay. Just lastly from me.

Just on the CapEx expectation of $65 million plus higher than previous years, is that just tied to the greater focus on occupier services going forward? Or just where are those investment being mostly allocated?.

The main driver for the elevated CapEx is really a few significant investments in new office space and, in particular, in New York City in 2020. Some of that expenditure will be landlord funded, so it -- the CapEx we show there is the gross number.

But it's -- on a net basis, it's not much different than what we would have -- what we spent in 2019, which is around the $44 million mark..

There are no further questions in the queue. I'll turn it back over to management for closing remarks..

Well, there's no closing remarks other than to thank everyone for participating, and we look forward to speaking again at the -- at our first quarter. So thanks, everyone, for participating, and we'll speak to you soon..

Ladies and gentlemen, this concludes the quarterly investors conference call. Thank you for your participation, and have a nice day..