Barry Gosin : I mean our opportunity for margin, if you — the incremental margin for every dollar in capital markets is $0.50. So when the market normalizes, we are going to have a disproportionate amount of high margin increase in our earnings in capital markets. So we have a lot of opportunity, a lot of growth in that area. Property management is a relatively reasonably good margin business. Facility management is a lower-margin business. But unless — it usually comes with other aspects of the business: leasing, tenant rep and other kinds of businesses and that corporations need, consulting, workplace, project management. So that’s why I say when it’s a pure facility management play, it’s a very low margin. If it’s a facility management opportunity with a significant amount of brokerage business, that’s where we play.
Companies hire us when they want a much more bespoke innovative, creative, solution-driven representation when it’s a pure commodity facility management on a global — on a fully integrated basis where they’re just looking to outsource it completely, that is not where we are best suited to be hired.
Mike Rispoli : Yeah. I would add to that, as we continue to get better operationally — more operationally efficient, we’ll continue to take costs out of the business, some of the fixed costs. And our expectations are that we can keep margin flat to grow it over time even given the mix changes.
Patrick O’Shaughnessy : Got it. That’s helpful. Thank you. Can you provide the revenue contribution from Gerald Eve in the second quarter?
Mike Rispoli : I think what we’ve announced is it’s around $110 million to $120 million on an annual basis. And a large majority of their business is recurring. So it comes in somewhat evenly. They do have some businesses that are more transactional. For example, they have a really great industrial capital markets business in the UK, which we have a great opportunity to grow over time. So — but generally it comes in evenly throughout the year.
Patrick O’Shaughnessy : Got it. And then last for me, you guys do have the senior notes that are coming due in the fourth quarter. Curious about your current expectations in terms of timing of refinancing that and what coupon you might have to pay.
Mike Rispoli : We expect to refinance it well in advance of the maturity. And if you just look at five-year treasuries from when we initially did the transaction until now, I think they’re up 140 basis points or so. Spreads have probably widened a bit. So the rate will be higher but nothing that we can’t handle within our financial situation.
Patrick O’Shaughnessy : Hey, great. Thank you.
Operator: That will conclude our question-and-answer session for today. I’d like to hand the conference back over to our presenters for any additional or closing comments.
Barry Gosin : I want to thank everybody for joining us today. And I look forward to updating you in the next quarter. Thanks.
Operator: And once again, that does conclude today’s conference. We thank you all for your participation. You may now disconnect.
