Michelle MacKay: Yeah. This is Michelle. I’m going to let Neil talk you through some of the numbers, and then I’ll address our services strategy.
Neil Johnston: Sure. Hey, Alex. I think the best way to think about our services business is really considering three different things. I should say, the first one is the fact that we had that contract change. That takes the growth from negative 1% to a positive 2%, which is in line with our low to mid but arguably at low end. The second thing is, in the prior year, we saw very strong services growth. In fact, that growth was double digit all the way through the first three quarters of the year. So as we came into this year, we knew we would have slightly tougher comps, and that — you’re seeing that in the numbers that we showed in the third quarter. And then finally, in Asia Pacific, it really was our project management business which was slightly lower than expected.
That business does tend to be fairly lumpy. We did see very strong activity a year ago. And so if one looks on a year-to-date basis, APAC services was actually up around 6%. And so that sort of smooths some of the lumpiness.
Michelle MacKay: And I want to make it clear that while there’s a few unique items this quarter impacting the results, we aren’t satisfied with the low level of organic growth that we reported in our services business. And this business is a big priority for us and a key area to invest in. So there’s a lot of opportunity for us to grow our services businesses organically, and we will be focusing on driving accelerated growth in this business specifically.
Alex Kramm: All right. Fair enough. Thank you. And then maybe secondarily, I don’t know if this is a follow-up to an earlier question on 2024, but obviously, you are looking for a second half recovery next year. But if we stay in this environment here, and I’m not so much focused on expenses but more for the growth outlook, do you still think there’s growth in the business from these kind of levels? I mean, again, you have the — you have a large portion that are kind of like recurring businesses and then I think, again, on the sales side, capital markets side, we’re pretty soft already, hard to see it go a lot lower. And then on the leasing side, I think renewals are actually supposed to be down next year, but maybe you’re still getting market share. So maybe a little bit of an early question about 2024, but in an unchanged environment, do you actually think you can grow from here? Or would there still be some headwinds here?
Michelle MacKay: Okay. So there’s a couple of things to unpack. So let’s just start with leasing, and we’ll give you our experience here. So this year, we’ve got a couple of large leases this quarter for occupiers, but we’re also seeing them holding off on decision-making. How you can translate that is they’re going to have to make a decision eventually. So occupiers have taken a defensive posture this year because of higher cost of capital, right? And they’ve been very careful with expenditures, which obviously impacts their decision-making. But it’s really unusual for leasing to dip ahead of a downturn. Typically, leasing moves in line with GDP and job growth, that’s what you’re getting at. But what we think is happening is perhaps some of the weakness that would have been in 2024 is actually getting pulled forward this year.
So we expect leasing volume to hold through next year and hopefully improve over time. But as you’ve said, if that were not to be the case, we’re well prepared, as Neil has spoken to, in both our cost structure and the fact that we have a services business. When you talk about capital markets, predicting the timing of cap mark, the rebound is really difficult, but we know it’s going to come. And if you look behind on the surface, the preconditions that will lead to the recovery are starting to form in here. Inflation is coming in, right? We’ve got the Fed this week. We think that there’s going to be a pause in there. We’re starting to see some of the shoots around stressed and distressed asset trading, valuations and other indicators in that sector.
