Bob Sulentic: It’s – it could be in some areas, Jade, but we think that what’s going on with office space has kind of settled out, right? Rates have come way down, users of office space have backed off, people that want premium office space for the experience side of things for their employees are going after it and we think they’ll continue to go after it into next year. We think industrial has slowed down for a time being. It will come back to the back half of next year, and I think you commented already, retail’s mixed. But there is a lot of retail activity in the economy now, and there is reason to believe that, that will kind of sustain the way it is now.
Jade Rahmani: And then on GWS. I understand the long-term opportunity and gaining the penetration rate by passing on cost savings to those that don’t currently outsource. But there are friction costs associated with this as well as execution complexity and uncertainty. Would not the macro backdrop create headwinds in GWS as well and thereby put some pressure on the double-digit growth. I mean, if the economy is slowing down, it seems that business’s double-digit growth profile could be at risk. Could you give some reasons why that’s not the case?
Bob Sulentic: Well, when the economy slows down, the company’s focus intensely on cost. And when they focus on cost, they think about having somebody like us, us more than anybody else handle their real estate facilities for them because we save them money. That is an absolute front and center dimension of that business. Where you see things slow down is capital expenditures, which can hit project management, but there is so much momentum around various parts of our project management business related to enhancing the experience for clients in the office space that companies have, which is a big deal for them now, and we think that’s going to continue to be a big deal. We think that will offset the focus on reducing capital expenditures.
Also, that project management business, as you know, does a lot of stuff in the infrastructure, green energy, etcetera, areas. And so we think that there is offsetting factors there that will allow that business to continue to grow to double-digit rates. So the bottom line is, I don’t think what we’re seeing in the economy and the uncertainty in the economy would push that down below being a double-digit grower next year.
Jade Rahmani: Thank you very much. Finally, just on REI, have you changed series underwriting toward the capitalization and acquisition of new projects to account for potentially rates remaining at current levels? And does the outlook for asset sales depend more on timing or a moderation in interest rates in order to refinance those deals and sell at attractive cap rates.
Bob Sulentic: Yes. Our underwriting that we do across our REI business for the acquisition of existing assets and for the investment in the co-investment and development deals is all driven by interest rates that we think will be available to us when we capitalize those projects. It’s – there is great attention paid to that and a lot of study around that by our research people and Chief Economist office, etcetera. So what’s in those underwritings is reflective of that view. What’s going to – we commented a little earlier, what’s going to drive the sale of assets is the stabilization or decline in interest rates and the general view that values have bottomed out. And again, we now think that timing is second half of next year. And we do think prices are going to come down a bit more, maybe as much as 10%.
Jade Rahmani: Thank you for taking the questions.
Bob Sulentic: Thank you.
Operator: Thank you. Our next question comes from the line of Stephen Sheldon with William Blair. Please proceed with your question.
Stephen Sheldon: Hey, good morning, thanks. I wanted to ask another question on the advisory leasing side. Curious how different the revenue trends may look between office versus industrial is one side they are holding up better than the others as we think about growth so far this year and then maybe how you’re thinking about it heading into the next year.
