世邦魏理仕2026年第三季度业绩电话会议：核心每股收益增长28%lg...

核心要点

• 世邦魏理仕（CBRE）2026年第三季度营收同比增长13%，核心每股收益（EPS）增长28%。韧性业务与交易型业务均实现两位数增长。
• 受超大规模客户对数据中心解决方案强劲需求以及收购 Pearce 的推动，关键基础设施服务营收飙升80%。
• 管理层维持其2026年核心每股收益指引为7.80美元至7.90美元，按中点计算代表23%的增长。
• 世邦魏理仕继续维持在2027年实现15%核心每股收益增长的目标路径。该前景展望包含了 Onnec 的预期贡献以及未来可能的其他并购。
• 管理层预计，2027年关键基础设施服务营收将接近45亿美元，基础设施服务总营收将达到近70亿美元，比2026年水平高出40%以上。
• 利率处于高位且波动加剧，正给房地产资本市场带来压力。世邦魏理仕预计，资本市场活动在2026年第四季度及2027年上半年将基本持平。

核心财务数据

业务与运营业绩

咨询服务

咨询服务营收增长11%，部门营业利润增长16%。

全球租赁业务营收增长6%。在英国市场的支撑下，欧洲、中东和非洲地区（EMEA）领跑，增长21%。亚太地区（APAC）增长2%，印度和太平洋地区的强劲表现被北亚地区的疲软所抵消。美国租赁营收增长4%；其中工业地产租赁增长16%，办公楼租赁下降2%。

管理层将美国办公楼租赁业绩归因于部分大额交易推迟至第四季度，以及去年同期基数较高。预计全球租赁营收在第四季度将保持低两位数增长，随后在2027年回落至中高单字数增长。

全球物业销售营收增长28%。在工业和零售物业交易推动下，美国营收增长37%。EMEA 增长8%（其中英国增长33%），APAC 在日本带动下增长10%。

抵押贷款发放营收增长1%。私有资本来源的两位数增长被政府机构贷款的下降所抵消。管理层指出，随着长期利率上升，借款人更青睐债务基金和保险公司提供的浮动利率结构。

楼宇运营与体验

楼宇运营与体验业务营收增长17%，部门营业利润增长21%。

受超大规模客户需求及收购 Pearce 推动，关键基础设施服务营收飙升80%。在科技、金融服务及能源客户的支持下，设施管理营收增长13%。美洲地区的本地设施管理增长超过25%，且在亚太地区和西欧保持强劲势头。

世邦魏理仕预计将在年底前完成对 Onnec 的收购。Onnec 将在马来西亚、北欧和澳大利亚等市场扩大其数据中心项目和技术服务业务版图。管理层表示该市场依然较为分散，并看到了在美国及国际市场进一步收购的机会。

项目管理

项目管理营收增长3%，而转嫁成本下降4%。按净营收计算，该业务增长了11%。

部门营业利润增长9%。与某客户违约相关的一笔一次性 APAC 成本使列报的增长率降低了6个百分点；扣除该项目减记后，管理层表示营业利润增长率为15%。

企业房地产资本支出有所放缓，包括部分科技及医疗保健客户。但与基础设施相关的业务增量足以抵消这一疲软。

房地产投资

在数据中心土地销售和其他资产变现的推动下，房地产投资营业利润从7300万美元增至1.66亿美元。

世邦魏理仕控制着20多个潜在可用于数据中心销售的地块。管理层将其描述为一项经常性但高度不均衡的业务，其时间节点在很大程度上取决于超大规模客户的需求、许可获取以及电力供应。

投资管理营业利润下降12%。经常性资产管理费的增长被共同投资收益的下降所抵消。

管理层业绩指引

世邦魏理仕维持其2026年核心每股收益指引为7.80美元至7.90美元。其中点意味着23%的增长。

管理层继续以2027年实现15%的核心每股收益增长为目标。该展望假设基础设施业务继续保持高速增长、Onnec 带来积极贡献以及可能进行额外的并购，同时也考虑到了房地产资本市场业务增长放缓的因素。

针对2027年，管理层预计关键基础设施服务营收将达到近45亿美元。基础设施服务总营收预计将接近70亿美元，比2026年高出40%以上。开发业务中潜在的数据中心土地销售未计入该营收预测中。

公司预计全年自由现金流转化率将在75%-85%的目标范围内，年底净杠杆率略高于1倍。

风险与关注焦点

• 利率偏高及利率不确定性正导致交易重新定价、推迟、以再融资替代资产出售，并拖累投资销售、抵押贷款发放、开发及投资管理领域的活动。
• 管理层预计，2026年第四季度及2027年上半年资本市场活动将基本持平。对2027年下半年改善的预期取决于利率是否能保持更大程度的稳定性。
• 两项大型企业设施管理合同需要重组，这将对该业务第四季度的收益造成压力。管理层指出，这些问题属于特定合同情况，并不代表更广泛的业务组合。
• 企业的谨慎态度影响了租赁和传统的房地产资本支出。部分科技客户正在将支出转向数据中心及其他关键基础设施。
• 债务成本上升可能会放缓新数据中心的建设。管理层还提及政治环境可能是潜在的制约因素，但预计在现有场地改造和美国以外市场仍将持续迎来机遇。
• 数据中心土地销售利润难以按季度或年份进行预测，可能会导致房地产投资部门的业绩出现大幅波动。

分析师问答环节要点

分析师关注的焦点在于世邦魏理仕2027年增长目标的可持续性。管理层回应称，韧性业务（尤其是数据中心和基础设施服务）可以抵消资本市场活动的放缓。15%的核心每股收益增长路径包含了 Onnec，并且有可能假设了进一步的并购活动。

在并购方面，世邦魏理仕表示其目标回报率至少为15%，并侧重于能立即增厚业绩的交易。如果 Onnec 获得全部基于业绩的对价，对价尾款（earn-out）将略高于10亿美元。管理层表示，要达到这一金额需要实现强劲增长。

世邦魏理仕预计，并购仍将是资本部署的优先事项。在 Onnec 交易完成前，第三季度的股票回购有所放缓；在收购储备项目依然强劲的情况下，预计回购规模将大幅减少。

管理层还澄清说明，企业设施管理业务的疲软源自两项需要重组的大型复杂合同。本地设施管理业务拥有不同的合同结构，并继续受益于工程导向服务及较小型项目带来的机遇。

业绩电话会议完整文字记录

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完整财报电话会议逐字稿

管理层陈述

Operator

Greetings, and welcome to the Third Quarter 2026 CBRE Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chandni Luthra. Thank you. You may begin.

Chandni Luthra

Good morning, everyone, and welcome to CBRE's Third Quarter 2026 Earnings Conference Call. Earlier today, we posted a presentation deck on our website that you can use to follow along with our prepared remarks and an Excel file that contains additional supplemental materials. Today's presentation contains forward-looking statements, including, without limitation, statements concerning our business outlook, business plans, capital allocation strategy as well as our earnings, net leverage and free cash flow outlook. .

These statements involve risks and uncertainties that may cause actual results and trends to differ materially. For a full discussion of the risks and other factors that may impact these statements, please refer to this morning's earnings release and our other SEC filings. We've provided reconciliations of the non-GAAP financial measures discussed on our call to the most directly comparable GAAP measures, together with explanations of these measures in our presentation deck appendix.

Throughout our remarks, when we cite financial performance relative to our expectations, we are referring to actual results against the outlook we provided on our second quarter 2026 earnings call in July, unless otherwise noted. All growth rates we cite are in U.S. dollars, unless otherwise noted. Also, as a reminder, our resilient businesses include facilities management, critical infrastructure services, property management, project management, loan servicing, valuations, other portfolio services and recurring investment management fee. Our transactional businesses are comprised of property sales, leasing, mortgage origination, carried interest and incentive fee in the investment management business and development fees.

I'm joined on today's call by Bob Sulentic, our Chair and CEO; and Emma Giamartino, our Chief Financial Officer. Now please turn to Slide 3 as I turn the call over to Bob.

Robert Sulentic

Thank you, Chandni, and good morning, everyone. CBRE produced another quarter of strong financial results and continued to make strategic gains in targeted areas of our business. Financially, core EPS improved 28% on a 13% revenue increase with both resilient and transactional businesses growing by double digits. Strategically, we continue to advance both our Critical Infrastructure Services business line, which operates as part of the BOE segment as well as the broader infrastructure services work we perform across the company.

As a reminder, our Critical Infrastructure Services business line primarily entails network infrastructure services, MEP projects and facilities management for data centers. Our acquisition of Onnec, which we announced on Tuesday, fits within this line of business. We expect critical infrastructure services to generate nearly $4.5 billion of revenue in 2027. Outside of the Critical Infrastructure Services business line, our infrastructure services work consists primarily of overseeing the construction of transportation and energy assets, along with data centers within Project Management and arranging the sales, leasing and financing of data centers and advisory services.

Taking this work into account, we expect our total infrastructure services revenue to reach nearly $7 billion in 2027, growing more than 40% from this year. Any data center land sales in our development business would be in addition to this revenue. Looking ahead, 2 significant competing dynamics are impacting our business and are offsetting each other. First, we should see continued outsized growth and investment in our infrastructure services businesses. Second, given the interest rate environment, we are expecting downward pressure in our businesses that are driven by the real estate capital markets.

And now I'll turn the call over to Emma.

Emma Giamartino

Thank you, Bob, and good morning, everyone. I will begin by providing detail on our segment results. Overall Advisory Services revenue rose 11%. Global Leasing revenue grew 6% with mixed results across regions. EMEA led leasing revenue with 21% growth where the U.K. was a standout. APAC grew 2% with strength in India and the Pacific, offset by softness in North Asia. In the U.S., leasing revenue rose 4%, supported by industrial up 16%, while office leasing dipped 2%. We have strong pipelines and expect global leasing revenue to grow at a low double-digit rate in the fourth quarter. .

Global property sales revenue increased 28%, led by the U.S., up 37%, driven by accelerated growth in industrial and retail. Outside the U.S., sales revenue grew 8% in EMEA with particularly strong growth in the U.K., up 33% and 10% in Asia Pacific, led by solid growth in Japan. Mortgage origination revenue rose 1% as a double-digit increase from private capital sources was offset by a decline in government agency lending. Private capital activity was driven by debt funds and insurance companies as borrowers preferred floating rate structures in a rising rate environment. The agencies have a hard time competing in a market environment with higher long-term rates.

Advisory SOP grew 16%. Turning to Building Operations and Experience. Revenue increased 17%. Growth continues to be led by Critical Infrastructure Services, where revenue increased 80%. The drivers were strong hyperscaler demand for our data center services solutions as well as contributions from last November's Pearce acquisition. As Bob mentioned, we have agreed to acquire Onnec and expect to close the acquisition around the end of the year. If Onnec were included, the Critical Infrastructure Services business line would have generated approximately at least $3 billion of revenue over the past 12 months.

Facilities Management revenue grew 13%. Enterprise Facilities Management was led by technology, financial services and energy clients, while local facilities management was paced by more than 25% growth in the Americas as well as continued strength in Asia Pacific and Western Europe. BOE SOP grew 21%. In Project Management, revenue grew 3%, while pass-through costs declined 4%. We saw a slowdown in real estate capital spending by corporates. This was significantly offset by strong growth in infrastructure revenue. Project Management SOP grew 9% despite a onetime cost in APAC related to a client default, which lowered the growth rate by 6 percentage points.

In Real Estate Investments, segment operating profit rose to $166 million from $73 million in the prior year quarter. The improved performance was driven by data center land sales as well as the monetization of other assets. We believe the embedded gains in our development portfolio now total about $800 million, adjusting the value for the recent increase in interest rates. Any data center land sales would generate additional profits over and above the $800 million.

In Investment Management, operating profit declined 12% as higher recurring asset management fees were offset by lower co-investment returns. We ended the quarter with more than $155 billion of AUM and raised approximately $2 billion of new capital, up from $1.6 billion in the second quarter. Now I'll turn to free cash flow and capital allocation. Free cash flow totaled $1.8 billion on a trailing 12-month basis. For the full year, we remain on track to achieve free cash flow conversion within our target range of 75% to 85% and expect to end the year with slightly above 1 turn of net leverage.

We continue to prioritize M&A in areas benefiting from secular tailwinds with a particular focus on data centers and infrastructure. You've seen this in the Onnec acquisition. Turning to our outlook. We are maintaining our previously stated 2026 core EPS guidance in the range of $7.80 to $7.90, reflecting 23% growth at the midpoint. As Bob indicated, we are seeing competing dynamics in our business. We expect to see continued outsized growth in our infrastructure businesses. This will be somewhat offset by lower growth in our real estate capital markets-driven businesses. As a result, we continue to see a path to 15% core EPS growth in 2027.

With that, operator, we will open the line for questions.

Operator

[Operator Instructions] Our first question comes from the line of Anthony Paolone with JPMorgan.

分析师问答

Anthony Paolone

My first question is with regards to the path to 2027 growth. What do you think most likely gets you there now in comparison to maybe what you thought the components were a few months ago? And can you maybe get into a little bit of the context on what may need to happen or just how at risk is that 15%.

Emma Giamartino

Yes. Thanks, Tony. So as both Bob and I mentioned in our remarks, we are seeing some competing dynamics across our business. Of course, we're seeing pressure on our real estate capital markets business, but that is being offset in a big way by outsized growth in our resilient businesses, notably infrastructure services and data centers. And I want to reiterate a number that we put in our press release around Onnec. Next year in 2027, we're expecting our critical infrastructure services revenue to reach $4.5 billion and our infrastructure revenue to reach $7 billion.

So there's a tremendous amount of growth there. Walking a high level through the segments, starting with the easy segments, BOE and Project Management, we expect them to grow consistently with how they've grown historically. Advisory will moderate somewhat more than what we expected 90 days ago, as you'd expect with slowing capital markets but it will grow next year. And then within REI, our Investment Management business will be roughly flat, and we expect to monetize development assets, including data center land sales, but there is a wide range of outcomes there.

We'll also likely have more M&A. We have a strong pipeline, particularly in the data center space, and we expect to do more in 2027. So if you put that all together, we are confident in our path to 15%. And I do want to say this is a great example of how our business model is working the way we've intended and the way we've shaped it, even in an environment where our capital markets business are slowing, our resilient businesses are able to offset that and deliver double-digit growth.

Anthony Paolone

Got it. And then just my follow-up is on BOE and just the enterprise facilities business there being under a bit of pressure. I guess what's changed? And what are you really seeing there, especially considering how recurring that business seems to be, and it's 3 quarters into the year, I guess, what's changed?

Robert Sulentic

Yes, Tony, what's going on there that's notable is that we have a couple of accounts that are problematic that we've decided to take on and work out and get resolved. That -- and in doing that, it's putting some downward pressure on our earnings, particularly in the fourth quarter in that business. That's happened from time to time over the years. It's a little bit like brokerage recruiting. The market gets frothy, it gets more and more competitive and you end up with some circumstances, you end up with some broker hires or for -- some outsourcing or enterprise accounts that don't have the characteristics you would want.

We have decided to really take that on now and try to change that circumstance going forward. So we're going to in a marketing sense, in particular, in a solutioning sense, we're going to approach it a little differently than we have in the past to try to get that out of our system kind of permanently. We'll never get it totally out of there, but we are to going to be subject to the impact of restructuring a couple of those accounts in the fourth quarter, and that's what you're seeing there.

Operator

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

Stephen Sheldon

First, just on capital markets. Can you just maybe dig into more on what you're seeing out there later in the third quarter and into the last few weeks or kind of early in the fourth quarter. And specifically, are you starting to see any delays or cancellations in transactions. And then maybe tied into last -- I guess, how wide of a range of outcomes could there be for capital markets looking into next year, assuming a somewhat similar environment to the one we're in right now. I guess how are you thinking about that?

Robert Sulentic

Yes, Stephen, this is Bob. I'll comment and then I'll let Emma comment. So we're seeing exactly what you would expect to see. The cap rates have gone up, deals that were under contract are getting retraded, deals that might have otherwise gone under contract aren't happening. We're seeing refinancings in some places that we thought would we'd see sales. All of the stuff you typically see when the capital markets are both uncertain and interest rates go up. Our view is that part of what's going on here isn't just the interest rate situation and what interest rates are, but what the uncertainty around interest rates.

It's our view that, that could settle out in the back half of next year and be helpful. Of course, none of us know what's going to happen. As a result, though, in investment sales, mortgage origination, development, investment management, we're seeing an impact, and that's baked into what Emma described in terms of our outlook for the business for the rest of this year and into next year. And Emma, you may want to add on to that.

Emma Giamartino

Yes. I'll just add that throughout the third quarter, as you'd expect, we saw a slowdown in our Capital Markets business, particularly in September. And going into Q4, we expect Capital Markets overall to be roughly flat and that to extend into, as Bob said, the first half of next year. What we really need is for rates to stabilize. The volatility and the uncertainty is what's driving a pause or a hold or even delaying deals to 2027. And we expect that stability to come in the back half of next year. And then, of course, if that doesn't come or things change, the results will be different.

Stephen Sheldon

Got it. That's really helpful. And then on project management, and I apologize if I missed some detail on this, but I think you called out in the presentation that the growth was tempered by weaker corporate capital spending. Just I guess, any detail on where you're seeing that and kind of maybe timing-wise when that started to slow down a little bit? Just any detail there.

Robert Sulentic

Yes. I think it's been a little slower throughout the year. You have all kinds of things going on. You do have some uncertainty in the economy, which causes corporates to be a little more conservative. You have some -- we have -- we do a lot of work for, as you know, big tech clients that have moved their spending away from kind of traditional legacy real estate type investment into infrastructure, critical infrastructure, data centers, I think you're seeing some of that. We saw I think a little bit of concentration and slowdown in health care. So it was a mixture of things. And I think we weren't that surprised by that. Emma, do you have something you want to add to that?

Emma Giamartino

Yes. I just want to add and reinforce that on a net revenue basis, our project management business grew 11% and our SOP, if you take out that one project that we wrote down was 15% growth. So it is doing what we expect it to do, and we expect that to continue through the year. So all of that growth in infrastructure, which is a very large part of our Project Management business is more than offsetting the slowdown in real estate.

Operator

Our next question comes from the line of Steve Sakwa with Evercore ISI.

Steve Sakwa

I was wondering if you could just comment a little bit more about the office leasing being down 2%. I don't know maybe -- I mean, you made some comments around region. That seems to be a little bit counter to maybe what we're seeing out of the REIT portfolios just from an activity level. So any color on U.S. office leasing would be great.

Robert Sulentic

Yes. I think, Steve, it is a little counter to broadly what we see going on in leasing. It had a couple of situations for us in Q3. We had some big deals that are going to slip into Q4, which is why we have confidence, in part why we have confidence that we'll see double-digit growth in leasing in Q4.

We also had a pretty tough compare last year. I will say that we're prominent in the bigger markets around the U.S. And I think everybody knows, if you go back to the comments you made on the REITs, if you look at the REITs and their best assets in the biggest markets, we're running out of space to lease, and that's having an impact on the business as well. It's good for the value of those assets, but that's having an impact as well. We think that, as I said, we're going to see double-digit growth in leasing in Q4, and then we think we're going to settle out in the mid- to high single digits next year in leasing.

Steve Sakwa

Great. And maybe just a follow-up on the Onnec's acquisition. Could you maybe just talk about kind of pricing. I think if we did the math right, it was about 9x EBITDA. How are you thinking about pricing? And how did you think about maybe change in pricing given just the overall capital markets environment and how do you size that up?

Robert Sulentic

Yes. Well, I'm going to make some comments on it, and then I'm going to let Emma comment. Emma was more involved in the pricing. So first of all, what Onnec does, they do outside the U.S. in some really important markets in Malaysia, in the Nordics, in Australia, and that rounds out our business, and that is a very valuable business, both to us and to other people that would want to acquire that business because of the position that we've put ourselves in on M&A in general, but specifically on M&A for these smaller data center type businesses, we're able to bring these companies on board, create an environment for them where they could be more successful with us than they could outside of us. And so we make an upfront payment that's reasonable, but then we give them the chance to have a substantial earn-out downstream. I think if they fully achieve their earn-out, the multiple will actually go up a little, but the outcome for us will be spectacular.

And Emma, you may want to comment on that.

Emma Giamartino

Yes. For -- if they earn the entirety of the earn-out, that would be a little over $1 billion. And as Bob said, we use that to incentivize to continue to generate really strong growth. These are businesses that have experienced rapid growth over the past 2 years, just as we've seen in our direct line business. So it's difficult to put a multiple on an upfront earnings number. And so if they earn the earn-out, and we're very confident that they will, we're going to have extraordinary growth in this business. .

Operator

Our next question comes from the line of Brendan Lynch with Barclays.

Annabelle Ayer

This is Annabelle on for Brendan. Maybe just a follow-up on Onnec. Are there any capabilities or geographies for critical infrastructure that are kind of still missing? And how much more M&A do you think is needed to fully build out this business?

Robert Sulentic

So Annabelle, we have a good global footprint now. This is something we were really after. We managed a lot of data centers overseas, but we didn't have the project capability built out the way we wanted to have it there, the white space technical services work. This does build that footprint out. But there is a lot of room to go in terms of the magnitude of our business around the world. This is a super fragmented business. .

We've now become very large relative to most players in this segment, but still very small relative to the size of the opportunity. And we do believe there'll be considerable M&A targets, both here in the U.S. and around the world that we can go after to continue to build this business. And we are an attractive home for those companies. We're getting inbound requests to talk to us about people selling their businesses to us. So we think that the kind of the perimeters of the footprint geographically are well built out, but there's a lot of infill to be done.

Operator

Our next question comes from the line of Jade Rahmani with KBW.

Jade Rahmani

Are you seeing any spillover effects from higher interest rates into other areas of the business beyond Capital Markets? For example, in office leasing, is there any reduction in confidence in other areas such as BOE, enterprise facilities management, any slowdown, any pause. And in Project Management, corporates, any pause on CapEx?

Robert Sulentic

Yes. I think in reality, Jade, it's all impacted by that, right? When companies are nervous about the economic outlook, they're a little more cautious. So it's hard to quantify, but there probably has been some pressure in leasing from that economic uncertainty. For sure, one thing we're anticipating is that there could be some impact on the data center build around the world because of the cost of debt.

If you look at our business, one of the things we really loved about Onnec is that if things slow down here for data centers in the U.S., either because of the interest rate environment or because of the political environment, et cetera, we think the growth is going to accelerate outside the U.S. And Onnec puts us in a great position to take care of that. We think that in data centers, you're going to see potentially some pressure on the amount of new build, which is crazy right now, as everybody knows. There will be a lot of pressure on that and still have it be enormous. And then what's happening, and we're already seeing it is a lot of refit of existing data centers, which a big chunk of our business is in that area now. So you're going to see -- when you have higher interest rates, economic uncertainty, you're going to see impacts all across the business.

Jade Rahmani

And your comments on data center potential slowdown actually addressed a second question I had. Just wanted to ask about the data center land site sales. Just in quantum, could you give any context as to how much is remaining? And in terms of activities, are you replenishing those? Is the plan to have that be a recurring business? Or is there sort of a set pipeline, and once it's monetized, that will be it?

Robert Sulentic

It's a recurring business, Jade, but it is not a ratable business, right? We can't sit here and say so much is going to happen every quarter. We could have 6 or 9 months where nothing happened and then in 1 quarter, we could have a lot happen. It's driven by the underlying demand mostly of hyperscalers, our businesses. We've got more than 20 sites that we have under control that could end up being sold as data center sites. We're active.

We have considerable skill at identifying and entitling and getting power to new sites. So we are in the market looking for new sites. And we think that, that will be an ongoing part of our business. But if you were to ask us to lay out exactly what's going to harvest quarter-by-quarter, or even year-by-year, we wouldn't be able to do that. And that's why when we talk about the profits and the revenues in our infrastructure-related businesses, we separate out data centers and comment that, that's in addition to the revenues that we're highlighting for you. When we talk about the profits embedded in our development business, we give you a number for that and then separate out data centers and suggest it'd be in addition to that. I can't remember over the years anything that we were involved in that had real promise that was also simultaneously more choppy than data center land sales are.

Operator

Our next question comes from the line of Seth Bergey with Citi.

Seth Bergey

I just wanted to kind of go back to the 2027 outlook and just understand how much of that kind of 15%, the path to 15%, does that include any benefit from Onnec that may not have been kind of in the outlook as of the second quarter call in the future M&A.

Emma Giamartino

Yes. It includes the benefit from Onnec, and it likely includes additional M&A on top of that. .

Seth Bergey

And then I guess just kind of on the additional M&A comment. Is that kind of how do you think about pricing? And should we kind of expect that to be -- what kind of size of the companies are you looking to acquire? Is there a size range or just kind of general comments you can make about what you're looking to underwrite?

Emma Giamartino

I think Onnec is a really good example of the types of deals that we're looking at in terms of size, multiple return. We look at all of our deals and are targeting a strong return at least 15%. And as you've seen with all of our recent deals, they're all highly accretive and immediately accretive. So we're focusing on delivering a strong return. We're creating value over the long term. So I think looking at something like Onnec is a good example. .

Operator

Our next question comes from the line of Ronald Kamdem with Morgan Stanley.

Ronald Kamdem

Two quick ones. Just going back to BOE and the enterprise facilities management. Can you just talk about what sort of catalyzed the change in -- that you mentioned with some of the tenants there? Was it rates? Was it something else? And how does that dynamic compare to what's happening with the sort of locals business? Is there any sort of correlations there?

Robert Sulentic

Yes. Ronald, this was 2 specific deals that -- the contracts and what we have to deliver under those contracts just doesn't work the way it's structured now. So we're having to restructure them. That work is underway. It's not indicative of the business more broadly. We are going to learn from it and change some things going forward. But those -- it's -- the thing to know about those contracts relative to the local business, those are very big, very complex contracts. They typically involve assets that are geographically spread maybe around the world, certainly over large geographies within parts of the world, many, many assets, sometimes multiple services, sometimes not. .

Local is very different. It can be a single asset. When it's a single asset, it can be quite big and quite complex or a group of assets within a specific geography. That business is very engineering-led, very small project led. We upsell a small projects. So it's very sales-led. It's not an RFP-driven sale process. It's a proactive driven sale process where we engage in the marketplace. So the characteristics around the way contracts are landed, the complexity of contracts, the work we do subject to those contracts is very different in those 2 businesses.

Ronald Kamdem

Great. That's helpful. And then just a second on just the capital allocation. I think you talked about sort of potential more M&A. How should we think about where you're comfortable running leverage? And does that probably sideline the buybacks from here?

Emma Giamartino

Yes. So we're always continuing to prioritize M&A. You saw that with Onnec. And you saw in Q3 that we did slow down our buyback somewhat in anticipation of this deal. And you should expect that to continue through the fourth quarter. We have a really strong pipeline of deals. I know I always say it's difficult to predict what will convert, but we have a great pipeline, and we do expect some of that to convert in 2027. So you should expect to see repurchases as long as that remains the same, repurchases decline pretty meaningfully. .

Operator

And we have reached the end of the question-and-answer session. I would like to turn the floor back to CEO, Bob Sulentic, for closing remarks.

Robert Sulentic

Thanks, everyone, for being with us, and we look forward to speaking with you again when we report our full year results.

Operator

Thank you. And this concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.

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