Welcome to the Colliers International First Quarter 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 materially differ from any future results.
Performance of achievements contemplated in forward looking statements. Additional information concerning factors that could cause actual results to materially different from those in the forward looking statements is contained in the company's annual information form as filed the Canadian Securities Administrators and 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 Tuesday, April 28 2020. And at this time, for opening remarks and introductions, I would like to turn the call over to the global chairman and chief executive officer, Mr. Jay Hennick. Please go ahead, sir.
Thank you, operator. Good morning, and thanks for joining us. I'm Jay Hennick, Chairman and Chief Executive Officer of the company, With me today is John Fredriksen, Chief Operating Officer and Christian Mayer, Chief Financial Officer. This conference call is being webcast and is available in the Investor Relations section of our website, a presentation slide deck is also available there to accompany today's call. Colliers began 220 with solid first quarter results, despite the initial impact Given the uncertainty, we expect the balance of the year to be challenging particularly for our brokerage operations.
In a few minutes, Christian will talk about our financial results, provide you with our working assumptions for the balance of the year, and discuss our liquidity
we will open
in local currency, adjusted EBITDA was $55,000,000, up 28% and adjusted earnings per leadership teams at all levels motivated mobilized swiftly and responsibly to protect our people and align our costs while ensuring business continuity for our clients. I'm extremely proud of them and inspired by the work they are doing as we navigate through this unfortunate crisis. For the work It goes without saying that businesses everywhere have been hit by the crisis. For Colliers, about 45% of our revenues and now more than 50% of our EBITDA comes from outsourcing, advisory and investment management, services that are typically more essential recurring and contractual giving us a much more stable business than ever. We have worked diligently over the years to change the nature and composition of our company by increasing revenues that come from more resilient real estate services so that Colliers would have a much more balanced business model, and I'm sure glad we did.
The rest of our revenues and EBITDA come from our highly variable brokerage operations, which we expect will decline sharply, as I mentioned. Across the board, we're making tough, but necessary decisions to adapt. We have already taken steps to adjust our costs including eliminating non essential spending, cutting CapEx and reducing nonrevenue producing support, administrative and legal staff. Furthermore, I have opted similar decisions notwithstanding the additional volume of work required during these difficult times. And our directors, without being asked, also waived directors' fees to show their support.
These are just some of the examples of our unique Colliers culture in action. Fortunately, Colliers also benefits from having globally diverse revenues reads with about 50 5 percent of our revenues coming from the Americas and the balance split almost equally between Europe and Asia Pacific. As markets return to normal, those that recover first will generate increasing revenues sooner as we are seeing to some extent in China right now and will also be able to share best map to return in ways we can't anticipate. However, I'm confident that Everyone knows that Collier's professionals are more enterprising and collaborative in this business. We continue to see countless examples of our enterprising spirit in action every single day and we deliver important insights to our clients Perhaps most importantly, our entrepreneurial culture and way of doing business is reinforced by the fact that our leadership owns about 40% of perfectly aligned with shareholders, we also have serious skin in the game, which is the ultimate motivation when it comes to making the right decisions expeditiously.
I believe in our diversified business model. I believe in our experience leadership decentralized operating structure and enterprising culture. And I'm confident that when this crisis passes our economy and call years will come out better and more unified than ever. Now let me turn things over to Christian.
Christian? Thank you, Jay. As announced earlier today, Colliers reported solid financial results for the seasonally slow first quarter, despite the initial impact of a global COVID-nineteen pandemic. My comments follow the flow of the slide posted on the Investor Relations in section of cliers.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 as largely unrelated to our operating results. All references to revenue growth are calculated based on local currency. 1st quarter revenues were 631,000,000 up 1% over the prior year. Internal revenue declined 1%, primarily due to the initial impact of the pandemic on brokerage up in the Asia Pacific region throughout the quarter and in other regions toward the end of the quarter. 1st quarter consolidated adjusted EBITDA was $54,000,000 compared to 0.6% versus 6.9% as I will discuss in a moment.
Up 4%. America's outsourcing and advisory management and valuations. Sales and lease brokerage revenues were down 3% impacted by a noticeable slowdown in the month of March attributable to the pandemic. Adjusted EBITDA was $31,000,000, up 19% versus last year, with an 8.4% margin of 110 basis points, primarily due to lower costs and operating leverage in those purchasing and advisory. EMEA region Q1 revenues were $117,000,000, flatrolled to the prior comparative period, quarter.
Adjusted EBITDA for the region was a loss of $4,000,000 compared to a loss of $3,000,000 last year. Asia Pacific Region revenues were $97,000,000, down 9% impacted by sharply reduced brokerage activity in China and other countries in Asia and attributable to the pandemic beginning early in the quarter, partially offset by incremental revenues from the recent acquisition of Synergy Project Management in India, which contributed significantly to the increase in outsourcing and advisory revenues, which were up 16%. Adjusted EBITDA was $5,000,000 compared to $11,000,000 last year on lower revenues and service mix. Investment Management revenues for Q1 were $46,000,000, up 7%. Revenue growth was positively impacted by management fee growth across open and closed end products as well as the timing of certain European transaction fees, offset by a reduction in pass through carried interest.
Assets under management were $35,100,000,000 as of March 31, 2020, up 31% from a year ago. Adjusted EBITDA for the quarter was $18,000,000 versus $10,000,000 in the comparative period, with a decrease attributable to base management fee growth as well as timing of transaction fees. Our consolidated income tax expense for the first quarter included a charge truactively. Absent this charge, our adjusted EPS would have been $0.59, up 16% versus the prior year period. Caller has maintained a conservative financial profile with a net debt to adjusted EBITDA leverage ratio of 1.8 times as of March 31, 2020.
Our leverage includes $91,000,000 of debt drawn under our revolving credit facility attributable to an investment in real estate assets to seed a new investment management fund in Europe. We expect to transfer these assets off our balance sheet without gain or loss during the second quarter of 2020 favorably impacting our leverage ratio. As of March 31, 2020, we had 478,000,000 available under our $1,000,000,000 revolving credit facility maturing in April 2024. And together with cash on hand, We have $580,000,000 of liquidity to fund operations, working capital, capital expenditures, and acquisitions. We recently renewed our $125,000,000 structured accounts receivable facility for another 1 year term extending to April 2021.
We also have outstanding EUR 210,000,000, up 2.23% senior notes maturing in May 2028. The COVID pandemic is having an unprecedented impact on global health and economic output. In light of this uncertainty, we have developed a working assumption for a company that is based on the best available information at this time, but is subject to changes based on numerous ongoing macroeconomic health, social, political, and related factors. Our working assumption for the full year 2020 is a 15% to 25% decline in consolidated revenues and a 25% to 35% decline in consolidated adjusted EBITDA relative to 2019, excluding the impact of acquisitions not yet completed. Brokerage revenues, which have a highly variable cost structure are expected to decline sharply in the second quarter and then gradually improved sequentially in the 3rd and 4th quarters.
Outsourcing and advisory and investment management revenues are expected to remain relatively stable through the remainder of the year with some local variability depending on market conditions. The working assumption includes steps to adjust our cost structure, which John will discuss in a moment Based on our working assumption, we expect to remain onside all financial covenants in our debt agreements. With a weighted average debt maturity of 4 0.7 years and significant available liquidity, we believe we are well positioned to weather, the economic and financial effects of the pandemic. That concludes my prepared remarks. And I would now like to turn the call over to John.
Thank you, Christian. As a COVID 19 pandemic, began to impact our operations around the world, 1st in Asia Pacific, in Europe, and finally in the Americas, Our executive teams moved from a growth mindset to a focus on sustainability, taking decisive action to protect our employees, observed government mandated closures, implement business continuity measures to support our operations and service our clients and reduce our costs to offset the impact of declining revenues due to the pandemic. Through the Colliers' Enterprise approach, This was done swiftly and thoughtfully as conditions warranted. And we will continue to monitor the situation closely, taking further action as Nest Siri. In Q1, we made the difficult decision to reduce the number of employees, our most significant expense.
Some of this began midway through the quarter. In Asia, most of the reductions took place just after quarter end. To date, approximately 10% of our workforce has been furloughed for a period of 2 to 3 months. With health benefits maintained, while another 5% were separated from service. These cost adjustments reflect predominantly nonrevenue producing staff in support, administrative and certain leadership roles.
Not included in these workforce reduction percentages is a much broader based reduction salaries and bonuses across our global workforce, from the global executive team to our regional and local leaders. In addition to reducing our people costs, we have also reduced all nonessential spending for the balance of the year. In the aggregate, we expect these measures to result in annual savings of approximately $150,000,000 in 20 Consistent with most other professional services firms, Colliers continues to service its clients across global platform, though mainly and where possible this is being done remotely. While our offices have reopened in many parts of Asia, are planned to open imminently. Offices in all other regions are either closed or remain open, but operating with minimal staff.
Higher investments in IT systems and applications have served us and our clients well as we are leveraging this investment more than ever before and expect that much of this elevated use technology will continue in the future. Whether it's communicating internally or connecting with clients, our use of technology has never been more important Callyers has delivered valuable insights through surveys, thought leadership, and interactive webinar at at local, regional and global levels developed and delivered through the untiring efforts of our professional and subject matter experts. Webinars that address a world view of dynamics impacting both occupiers and landlords earlier in the month. The more recent presentations focused on surveying remote working and transitioning back to the workplace attracted thousands of registered participants, representing a tenfold increase in the typical size of audience for these types of presentations pre crisis. For those interested, this COVID-nineteen related content is located on our website at callers dot com and available by major market using the drop down menu located in the upper right hand corner of our homepage or the hyperlinks on the operational priorities page of the slide deck accompanying this call.
So these Although there are countless silver linings to this crisis, the callers will benefit from in the years to come. This does not in any way negate significant human and economic costs in the pandemic, and the uncertainty it has created. However, with a near term focus on business continuity combined with a longer term focus on strategically investing for the future We believe that we will emerge from this And I would now like to
turn Our first question comes from the line of George Doumet with Scotiabank. Your line is open.
Maybe looking at the more stable outsourcing advisory part of the business. I'm just wondering if you've seen any pockets there that's been more vulnerable to COVID-nineteen. I mean, just to clarify, do you guys expect that part of the business to be flat or would you expect that that part of the business to be down?
It varies by service investment management has been very resilient. In fact, as you can see from the results up for the quarter, property management is absolutely booming, although they are having trouble, staffing some of the buildings because some of their support staff, particular, in particular, on-site building personnel, which we administer. We're having trouble getting people obviously to attend. So that's been taxing on them. Modestly impacts revenue streams.
But one of the silver linings as John talks about is our phones have been ringing off the hook from others that maybe potentially, were doing their own property management and now want to outsource that to a credible service providers like Colliers. And we're responding, to those to those, requests for proposals. And so we're seeing business pick up. But I think I think for the quarter and even through the 1st month of this quarter, we're seeing substantial increases in our in our property management business so far. Other areas, project management, as an example, have also been very resilient.
We're seeing some pickups in business, depending upon different geographic regions. There is some variability, because in some countries, governments have closed down construction sites, including infrastructure, which is of the lion's share of what we do in project management So we're seeing a little bit of, a little bit of that happening, but generally, pretty much as as resilient as we were hoping it would be going into a crisis like this. I hope that answers your question.
That's helpful. Thanks for that, Jay. Maybe a tougher question. How would you see the eventual recovery in brokerage activity by region? I mean, obviously, Asia it seems like it's recovering, but the other parts of the world, like how do you kind of see that in terms of the recovery?
Well, we're not seeing it in Asia. Just yet. And that's something we're watching daily. We're seeing activity happen, and we're seeing activity virtually in every other market. Our real estate professionals are being asked by clients to help them with leasing extensions, lease deferrals, all kinds of, of, potential adjustment to existing lease relationships, those generally are provided as an advisor, sometimes we get paid.
It's modest when we get paid. In China, we're seeing a lot of that happening right now. There's very little new leasing taking place because, obviously, in many buildings, it's difficult to get access. So I think that, if one were to ask me, are people busy? I would say in many ways they're busier now than they've ever been, But the question is, is that translating into revenue streams near term?
And we haven't yet seen it and suspect that, that as Christian said, the Q, Q2 will be difficult and hopefully, we'll consistently get better over the balance of the year. So, that'll give you a sense. Buildings themselves, buying, selling, buildings. There's a lot of bottom feeders out there looking for building, looking for buying opportunities. There isn't necessarily debt in the marketplace.
Although most lenders say they're open for business, our Our insight is that they're open for business only for the right business at the right terms, including higher, higher interest rates on existing indebtedness. So, it might be there for their most prominent clients, but it's not as readily available. All of these things, and the interesting thing about commercial real estate is We are active in these times and times of change. It is generally very good for real estate service providers. Whether that translates into revenue streams and when it translates into revenue streams is another question.
Yes, that's helpful. And just one more if I may, soft off Christian's remarks around being on-site for the covenants. I'm just wondering if you guys are maybe looking to extend those, just maybe to give us a little bit of wiggle room for M and A and just wondering how opportunist will be on that front?
George, we're always looking to be opportunistic, as it relates to acquisition opportunities. Those may come later in this year or next year. And we will consider those at that time. Okay.
Thanks.
Remember also, remember also that we are in the process of 2 very significant transactions to companies that we, we think are 1st class, and, we'd like to complete them when the, when conditions are met. And both of those are, further our, our, our game plan of extending more resilient services for Colliers while opening up huge new growth opportunities for us going forward. So we are already, out there in terms of our next phase of growth and, and believe that, once those transactions are completed, we will again accelerate our our growth plan as we
Our next question comes from the line of Matt Logan with RBC Capital Markets. Your line is open.
John, could you give us a little bit of color from an operational perspective, maybe just on how your professionals are adapting to a work from home environment and how this differs by your various service line?
Sure. I think that I referenced silver linings. And there are many actually in the difficult time. And one has been how incredibly enterprising our professionals have been and their ability to quickly transition to working remotely, using technology to communicate and to collaborate both internally and with our clients. Certainly, there are certain things that are more challenging to do during this time, like walking space on a new office layout that you might be considering, things like that.
But those kinds of things have been postponed, but I think the, the greater opportunity of looking how to work through this period and transition to what will be a gradual opening has been top of mind for our professionals. They've adapted extremely well with us and are now dispensing advice, some of which I have indicated already has been publicly made available and has been attended by, literally thousands of people. So I would say across the board, certainly the professionals who are typically in our workplace offices have done extremely well. Many of those are quite used to working remotely as it is. Certainly, our number of our fee owners and advisors are routinely, out of the office.
So perhaps a little bit less of a change for some of them. And then as Jay spoke earlier, we do have certain people that are on-site and have to be on-site at client buildings to the extent that those remain operating and, hosting people. So we've adapted there as well. I'd say all in all, it's been a very pleasant surprise to see how well our professionals across our business and support staff have also adapted to, the new way of working, which, is temporary, but some of which may be with us down the road.
Great color. And maybe just changing gears a little bit. Given your expectations for stable results in outsourcing and advisory and investment management. Can you give us any thoughts on your outlook for potential revenue declines on sales and lease brokerage just maybe what you're seeing to date or if you think those two business lines may be different in any way in terms of the magnitude of the declines?
Matt, we, looked at our pipeline and our developer expectations for the rest of the year, from a bottoms up approach really through with each of our regions, with each of our, management teams around the world. The revenue declines in brokerage, as I said, are going to be very significant. Very significant in in Q2. But really in terms of the overall outlook, we're focused on the year. And it's difficult to predict what Q3 and Q4 are going to look like.
Exactly. And it's difficult for us to what the full year will look like, but we've made our best, assumption and our best, our best guess, with the information we have today to provide the working assumptions, that we've developed, but certainly brokerage will be, will be down sales and lease brokerage, both, to be, we'll be clear, we'll be down. And, we'll develop it more the year progresses.
Appreciate that. And maybe just in terms of the differences between the 2, were you expecting to track very similarly, directionally, or would we expect to see lease brokerage perform better than sales brokerage in 2020?
I think that's the common assumption, but, it's difficult to answer the question because leasing up as a bigger component of our business in some regions and less of a component in other regions of our business. And so it's very difficult to give you a breakdown of how they might be, on a global basis or even on a regional basis. So, I think the best guess we've given you is, is a combined, brokerage activity set, for the company across the board.
Well, I appreciate the commentary. That's all for me. I'll turn this turn the call back.
Thank you. Our next question comes from the line of Stephen Sheldon with William Blair.
Good to hear about the inbound activity in the property management business.
So
I was curious what would need to happen for you to be able to close some of those deals? Would that likely only happen in a material way once restrictions on inputs and interactions are lifted? Or is that something that could happen to a certain degree before travel opens up, would clients be comfortable closing deals like this remotely, or do you need to see them in person for that to happen?
We're seeing clients are closing deals on that primarily for 2 reasons. 1, they're dissatisfied with existing service providers that have vacated in some cases or so many of their on-site staff have just not been there to protect the buildings that they have, number 1. And number 2, there really is a big push And rightly, in our view, for those that are both an asset and property manage manager to outsource the property management component of their business. So the turnover is easier in a circumstance like that. They're turning over all of their on-site work.
And in some cases, the entire staff that comes with that to Colliers. And frankly, it's been a little bit of a pressure on our property management operations, who are now looking back at some of their existing chambers that we have to make, make, make availability for some of these larger, opportunities that are that are coming, to 4.
And then I think you gave some detail about property and project management. If you said anything about valuations and advisory, I I guess, what trends are you seeing there in the current environment over the last few months?
So valuation has been, has gone through the roof. It had an amazing first quarter. It continues, although not as not with the same velocity into this quarter. I suspect it will fall off, a little bit going forward, not to the same degree as broker, just an example. And part of that is because debt financing is not as readily available, but offsetting that, a lot of lenders on properties that we would have valued a year ago are asking us the evaluation we did a year ago in light of changing tenant profiles and their ability to pay rents.
So I think the, I think revenue and valuation will be less than it was in the first quarter, but should continue, by and large for the balance of the year.
Okay. And then last one for me. What do you think the current environment does for adoption of technology solutions for CRE Professionals, for operators and users over the medium term. Has there been anything surprising about the way these different parties have used tech solutions over the last few months?
Steven, this is John. Yes, it has been a little bit surprising. I mean, there was already a trend towards more use of technology, but this is really forced many people to adopt, very quickly. And, you know, there's nothing like a situation like this where, the dynamics, cause people to have to operate differently. And technology has been one of the main ways to stay connected with both clients and colleagues.
And we are using it significantly through our business And at the same time, we are continuing to carefully and modestly invest and evaluate those technologies, which we believe are going to continue to facilitate our productivity working remotely and thinking about the future, how we can use this more effectively to communicate and to collaborate with our people. So it has been very, very interesting to watch. And, it's going to the trend will continue has just been accelerated during the last couple of months.
Great. Thank you.
Thank you. Our next question comes from the line of Stephen MacLeod with BMO Capital. Your line is open.
Great. Thank you. Good morning, guys.
Hi, Steve.
Hi. I just was wondering just following up on previous line of questioning around the brokerage business. Can you talk a little bit about kind of what you saw in terms of brokerage trends through the quarter and more specifically kind of what you saw in terms of brokerage trends in March and potentially quarter to date as well.
Brokerage trends, as you could see, we had a very strong first quarter. So brokerage did exceedingly well during the quarter. I would suggest that a lot of those transactions were, transactions that started to culminate in November to December January, and then resulted in, transactions being completed either during the quarter or in fact, during this current quarter, we're seeing, transactions still get completed. And that's That's both in North America and Europe and Asia as well. So I think that, that we're seeing that.
We're seeing pipelines not as buoyant in terms of new buildings for sale, and primarily because the new reality yet has not set in with land owners and even buyers what is the value of the building going to be worth in the future? I have a shopping mall. The shopping mall is a good shopping mall. Except that 40% or less of the tenants paid. I've got high leverage on the shopping mall is now the time to sell.
What am I going to do about it? So there's a lot of that and it's happening in office. It's happening even in in the better asset classes of industrial and some of the other areas, people are relooking at real estate the pundits are relooking at the asset classes to determine whether there's actually a change in in, those asset classes that are more, more, desirous than others So I think there's a period of time here where, people are going unless they are financially strapped unable to pay their debts. I think for the most part, there's going to be a period of time when people will wait to see what the new, value levels are of their different real estate assets.
Okay. That's very good color. Thank you, Jay. And maybe just along those lines, you talked a little bit about this new reality has not yet set in. Do you view or do you view any long term changes in how people view real estate.
If you think about just the propensity for people to potentially work from home, does that in your view lead to higher occupancy rates or vacancy rates in the office sector, for example. Are there any long term trends that have begun to emerge or is it still too soon?
Well, John may have his own views on this, but everything you're reading, you've got 3 people that say we're going to have smaller office footprints in the future. Another three people will say they're not going to change for this reason. So I think that it's, again, still too early to make any, pronouncements there. I think there's a lot of people dissecting different asset classes to determine different pricing levels But in general terms, real estate will continue to be a proven and desirous asset real estate, borrowing rates are at historical lows. We'll continue to be at historical lows.
When you compare privately owned real estate to the volatility of the marketplace, it is still a very a very good asset to own. And I believe that, I believe that institutions will continue to at to allocate their capital to real estate in increasing numbers as they have over the past couple of years.
I'll just add briefly to that. I mean, at the end of the day, as Jay said, I think it's probably too early to make any conclusions about what's likely going to happen here. But based on what we've seen now and the talk and the discussion, of course, this can all change. But based on that, there seems to be perhaps some interest in more flexibility around the workplace. Conceivably, there could be some migration to working from home in a limited way.
One would think that that might reduce the amount of, in the case of office, amount of space required, but in the current configurations of many offices, they don't lend themselves to social distancing very well. So it may end up being sort of a net 0 where, if it wasn't for allowing certain people to work from home from time to time, companies would have to expand their footprint or reconfigure it significantly. And if they can simply work with the existing footprint, and then also allow a small part of their workforce to work remotely. They can sort of stay at the same level in terms of workplace and office occupancy. I don't think it's had much of an impact on the industrial market.
In fact, there are secular trends around industrial and logistics, which in some way may continue and have actually accelerated around e commerce and other things that we've seen a lot of, of course, during the crisis. And a lot of that will probably continue. Those are the 2 biggest areas for Colliers. There was a whole other subset around retail, which had its own challenges and which have been more exposed now. It's a small part of our business, but I think there are challenges there around retail and redevelopment and other things that it's going to to get done in that particular asset class.
Jay has already spoken about some of the other areas that were involved in on the Investment Management side, so I won't repeat any of that. But, anyways, there's change here. But in terms of how exactly it's going to end up after we get through all this, nobody really knows.
Right. Okay. That's really helpful. Thanks. Thanks, John.
And then maybe just finally, when you talk about the outsourcing and advisory business, and that may be excluding Investment Management. Is there a way to quantify sort of how recurring the different components are when you think of property management, project management and workplace solutions and valuation and advisory.
Well, it's easy to quantify. Property management is completely recurring revenue. There are components of it that may not be as recurring. So if I, if during the crisis, an owner decides that they want to cut the number of on-site staff down, from previous levels because buildings aren't open. Would reduce the revenue and associated margin with that.
But generally speaking, it's, it's a business that we do I'd say $600,000,000, $700,000,000 a year worldwide, build on a monthly basis, essentially. Project Management is another business. We probably do, 3,000,000 dollars, $400,000,000 a year. In that business on a global basis. It's built on a monthly basis.
It's based on, in large part, staffing of jobs that are, have an average job period of 18 months or so typically, therefore, from, from large institutions or governmental agencies, infrastructure. So their long term, relationships, you know, just using a Canadian example, we've been working on the, on the revitalization of the parliament buildings in Ottawa now for 12 years. And I understand the, the job will be completed in 2032. So there's just an example of, long term project management. Valuations is a little bit less recurring except that once you value a building and in many cases, owners need to have those buildings or lenders need to have buildings reevaluated either quarterly or annually, you build a relationship and you're renewing it on an ongoing basis and earning fees on an ongoing basis.
And that's investment management aside. So those business units. And we've worked hard, as you know, Stephen, over the years, to change the nature of our company to focus on real estate services that are much more, resilient. Those are resilient. And we believe, our, new foray into, the mortgage servicing and debt placement area, as well as engineering when those transactions get completed, will just take us to an entirely new level of, of, of the composition of Colliers, which is, in our view, significantly different than the other the other companies in our sector.
So hopefully, that gives you some color.
Yes. That's great. Thanks so much for the color, guys.
Thank you. Our next question comes from the line of Frederick Baston with Raymond James. Your line is open.
Thank you. Jay, you sound pretty committed to the Doherty and Maser acquisitions, but I was hoping to get an update on both. Curious how long you can push potentially push to close of these transaction for?
Well, we're not pushing we're not pushing the extension of either of the transactions. Both of them are subject to, regulatory approval. Both of them are subject to closing adjustments, in the case of Daugherty, obviously, there's been something called a pandemic out there. And that has an impact on, on closing adjustments. So we're looking at that very closely to make sure that, we get what we pay for and we have the appropriate coverages we need.
Maser is, just early days in the regulatory approval process. Both of these transactions are of high quality. Both of these transactions are with people that we are looking forward to working closely with. Both of these transactions are areas in which we think 1 and 1 could make 6. So, we are, we are committed Having said that, we'll only this area.
Okay. Cool. That's helpful. Thanks for the clarification on the and just curious of the $150,000,000 or so in expected cost savings that you highlighted earlier. How much how much of that would relate to your brokerage business?
Most of it.
Yes. I mean, the vast majority would be the brokerage business. I mean, certain support staff may cover multiple areas, but We really did try and become the laser focused on the areas that we felt were most susceptible to the impact of the measures taken to contain the pandemic and that's where we went at. So, yeah, the vast majority would be a transaction related.
All right. Thanks for that, John. That's all for me. Thank you.
Our next question comes from the line of Sam ISIE. Your line is open. She's with CIBC. Thanks.
Good morning. Just one question from me here. Just on Investment Management, it's seeing pretty good growth in AUM since you guys bought the platform. Any early indications of where AUM is headed today and, in your revised outlook, I guess, does that imply AUM staying flat or is there any growth sort of baked in there?
Well, Sumaya, we had AUM growth of about 6% sequentially in Q1. And, would expect that we would have sort of similar AUM growth through the remainder of the year, based on our pipelines of commitments and, for investment, which remain strong, and our deployment of capital has been previously committed. So modest growth through the remainder of the year would be our view. The only thing that I
the only thing I'd add to that is, our Investment Management business now in the mid-30s in terms of AUM with significant operations in the U. S. And in Europe is one of the largest, if not the largest alternate asset, investment management firm 1st class, they won, they won this year. The P. R.
Best investor in, in alternate assets. And, people forget the fact that, that Colliers owns one of the best in this, in this very important segment of the, of the real estate investment management industry. It continues to grow by leaps and bounds. It has an amazing management team. We're very proud of them.
They continue to grow their business beyond just the U. S. And, and, Europe. They're looking at Canada as an example right now. So This is another big area of growth, we think, for Colliers in the years to come.
And, we have a great partnership and astute group of, shareholders at Harrison Street that have, have really done an incredible job over many many, many years.
Okay. So they continue to stay active during the current shutdown, I guess? Yes.
I'm showing no further questions at this time. I would now like to turn the call back over to management for closing remarks.
Thank you very much, operator. You know, we, we, we would normally say we look forward to, having a second quarter conference call, whenever it takes place, it'll be an interesting one, as we'll see how brokerage rolls out for the balance of the year, but we are anticipating a difficult second quarter as it relates to brokerage. But all else is working well at Colliers. And, we, we hope to be able to weather the storm even in brokerage, better than most. So thanks for joining us today.
And, we look forward to speaking to you soon.
Thanks. Ladies and gentlemen this concludes today's conference. Thank you for your participation. You may now disconnect.