CHICAGO--(COMMERCIAL OBSERVER)-- The commercial real estate industry has taken enough punches of late to leave it feeling like it’s just gone 10 rounds with Floyd Mayweather, and brokerages are no exception. Fourth-quarter earnings reports, weighed down by 18 months of beleaguered market conditions at that point, were lackluster across the board.
With market stabilization hopefully on the horizon, several of those firms are busy mapping out blueprints for their next chapters, leaning into growth areas and addressing any trouble spots.
One of those firms is Cushman & Wakefield (CWK).
At its helm is Michelle MacKay, who took the reins as CEO in July 2023. Seven months later, like every other head of a publicly traded company, MacKay addressed her company’s 2023 performance on its fourth-quarter earnings call: the good, the bad and the ugly.
Its $9.5 billion of revenue and $6.5 billion of service-line fee revenue decreased 6 percent and 10 percent, respectively, compared with 2022. Property management, facilities and project management grew 3 percent, but the company saw 12 percent annual declines in its leasing and valuation businesses, and a 41 percent decline in capital markets business revenues.
Outside of the call, the company has faced short selling of its stock, which hovered around $10 a share as Commercial Observer was going to press. In early 2023, the stock price was above $15 a share, and in 2022 it regularly topped $20. Meanwhile, some of the firm’s talent has jumped to rival brokerages, and Brookfield Properties in November dismissed C&W from handling the ownership giant’s office and logistics listings in the U.S.
It’s fair to say it’s been a baptism by fire for MacKay, who — despite the most arduous of market conditions — got straight down to business when she took over the CEO seat in July, starting with one big task up front.
Over the years, C&W was built via the acquisition of numerous companies. But since its initial public offering in 2018, leadership hadn’t stopped to take a holistic view on where the company stood, how the market had shifted, and what had been learned since. And with both a global pandemic and severe market dislocation impacting commercial real estate in a very real way in between, a full review was long overdue, MacKay said.
As such, Manhattan-based MacKay went on what she describes as “an immediate attack” to analyze all the underlying businesses and set up a strategy for them, all while continuing her daily duties as CEO.
The first week of August marked her first earnings call. The following week, C&W refinanced $1.4 billion of debt that was coming due in 2025. Then, MacKay pivoted to focusing on the strategy for the company going forward, which was approved at the beginning of November.
“My immediate focus was getting deep into the business, analyzing it, figuring out the areas that we could explode in — in terms of profitability and growth — and also considering which areas were non-core that we could walk away from,” she said, declining to name the latter areas out of a care for the employees who populate them.
MacKay describes her appointment as CEO as an “awakening and a change in philosophy” for the firm. She also brings a clear new mantra along with her that emphasizes her leadership style: “Better never settles.”
