CBRE Group Inc., the world's largest real estate brokerage, said it has $5.5 billion it's looking to spend on acquisitions as some companies seek buyers in a slowing economy that contributed to its first quarter-earnings falling 70% from a year-earlier record.

The Dallas-based firm plans to deploy more than double the capital it spent in the past year as it chases some acquisition opportunities and seeks to reinvest in its business, executives said in discussing the firm's first-quarter earnings on Thursday.

"The current environment is an attractive time to deploy capital," said CBRE Chief Financial Officer Emma Giamartino. "Our M&A pipeline is strong with multiple attractive opportunities, some large, that could transform CBRE's existing offerings."

CBRE reduced its share repurchases in the quarter as it continues to evaluate these opportunities, Giamartino said, adding that "if we are unable to convert our larger pursuits, we will accelerate our share repurchase activity."

The company is the first brokerage to report its first-quarter earnings and the results provide an indication of what other major publicly traded brokerages could report in the coming weeks. CBRE said its first-quarter revenue rose 1% to $7.4 billion from the year-earlier quarter while its earnings exceeded analyst expectations, though still falling to $116.9 million from $392.3 million. The stock closed up 8.9% Thursday.

The brokerage was helped in the quarter by loan servicing, property management, valuations and asset management fees, as well as cost management efforts. CBRE told investors in October it planned to cut $400 million in costs over the following six months as the economy and lending slowed with the Federal Reserve increasing interest rates to get inflation under control.

"Current conditions are difficult for capital markets and getting more difficult for leasing," CBRE's CEO and President Bob Sulentic said. "There are three major reasons for these difficulties, first, inflation, elevated interest rates and the likelihood of a recession, second, banking system stress and, third, issues specific to the return to office and office utilization."

CBRE declined to comment beyond the earnings call for more information about potential M&A deals.

The company spent more than $2 billion last year on mergers and acquisitions. The purchase of United Kingdom-based Turner & Townsend that was completed in November 2021 was noted as helping boost CBRE's bottom line in the first quarter this year. CBRE has mentioned its success with its $350 million investment in Industrious.

This month, CBRE named a new senior executive, Croft Young, to oversee the firm's M&A activity. Young is a former managing director at Morgan Stanley where he worked for nearly 14 years.

When it comes to acquisitions, Sulentic told analysts that "we have become a more interesting buyer to a good number of companies than we have been historically. There are companies out there in our sector or directly adjacent to our sector that believe by becoming part of our business or having financial sponsorship from our business will help perform better than they can perform on their own."

He added that "this is not a circumstance that's going on in the same way with other companies in our sector. We think we have a distinct advantage there and that's going to be of a more a materially part of our future than you would've heard from us in the past."

Sulentic said the Dallas-based firm is aligned with the consensus the economy will tip into recession this year. CBRE is prepared for a moderate recession with an eventual easing of the Federal Reserve's monetary policy leading to a rebound of economic activity next year, he added.

"The high-profile regional bank failures last month have further constrained lending, however, we are not in another global financial crisis," Sulentic said. "Regional banks are still lending to commercial real estate, but on a much more selective basis. We expect the regional bank pullback to be partly offset by other capital sources, including debt funds and private capital sources."

The office market remains a challenged part of the commercial real estate industry.

"We estimate it will take this asset class twice as long to recover the lost value as it did in the aftermath of the global financial crisis," Sulentic told investors. "This reflects the formidable challenges facing office assets driven by both the slow progress of employees returning to the office and the shedding of jobs in tech and other sectors."

One of those tech companies, Facebook's parent Meta, is looking to slash its real estate portfolio throughout the world. The company is ending its leases and incurring expenses to do so. Other tech companies, including Amazon and Microsoft, are also in cost-cutting mode.

"Ultimately, we believe that office portfolios will shrink meaningfully from where they were prior to the pandemic, making office a smaller, but still very large commercial real estate asset class," Sulentic said.

CBRE has become "much less dependent" on office properties, he added. Offices accounted just for 14% of the firm's property sales revenue in 2022. Other asset classes, like industrial and multifamily where CBRE has a large portion of its business will be more resilient, he said.

"It is in our view that debt costs and cap rates are likely near their peak and should gradually improve later this year, driving a turnaround that will significantly impact 2024 performance," Sulentic added.

Capital markets revenue declined 43% as investors continue to wait for lower borrowing costs and clarity on asset valuations, CBRE said. Global leasing revenue declined 8%, with non-Americas business outperforming in this category. In all, total advisory net revenue declined 18%.