Emma Giamartino
Chief Financial Officer at CBRE Group
Thanks, Bob. Before turning to segment performance, please turn to Page six as I provide more insight into our resilient businesses. We've used this term regularly in our earnings calls over the last several quarters and it is now being used broadly in our sector. CBRE defines resilient businesses as those which hold up well in a down market cycle, either because of their noncyclical characteristics or because they benefit from secular tailwinds. For CBRE, those businesses include the entire GWS segment, loan servicing, valuation, property management, and recurring asset management fees. In our investment management business. When we use this term, this is the group of businesses we are referencing.
These resilient businesses in aggregate generated nearly $1.6 billion of SOP in 2023, and are expected to generate $1.8 billion of SOP in 2024. This would represent a sixfold increase from 2011, the first full year of a market recovery following the global financial crisis. We expect 2024 to be the beginning of a market recovery, albeit a more gradual one. For context, our resilient businesses have grown SOP over three times as fast as our transactional businesses since 2011, and they are expected to be nearly double the size of our entire business at a similar point in the last cycle.
Please turn to Page seven as I review our results and outlook for 2024. Across the Advisory segment, net revenue and SOP essentially matched the prior year's Q4. Leasing saw a slight uptick in revenue for the quarter, driven mostly by EMEA and APAC. Globally, higher office leasing offset slightly less industrial activity.
Within property sales, industrial and retail declined less than multifamily and office, supported by healthier fundamentals. Commercial mortgage origination revenue growth was attributable to interest earnings on escrow balances. The rest of our advisory business lines together achieved a 6% net revenue increase.
Turning to Page eight, GWS had another strong quarter. Net revenue and SOP grew by double digits. Facilities management net revenue increased 14% for the quarter and 13% for the year. Most significantly, our sizable GWS local business has been increasing net revenue at or above a mid-teens clip, and is well positioned to sustain this growth rate for the long term.
Project management net revenue grew 11% for the quarter and 14% for the year. This was led by the large scale program management work being done globally by Turner and Townsend. Notably, we had record pipeline conversion to new GWS contracts during Q4, with a balanced mix of new clients and existing client expansions.
Turning to Page nine, SOP and our REI segment increased to $68 million in Q4, up from just $17 million in the prior year Q4. Development exceeded expectations due to the earlier than anticipated monetization of several assets in the US. Investment management operating profit rose significantly in Q4, driven by higher incentive fees and recurring asset management fees. Investment management AUM ended 2023 at $148 billion, up $3 billion for the quarter, largely driven by favorable currency movement and modest net capital inflows, which offset lower private asset values. For the year, AUM was down $2 billion. While asset value declines appear to be slowing, we anticipate values will remain under pressure in early 2024.
Before turning to our 2024 outlook, I'll comment on our capital allocation strategy on Slide 10. We are on track to deploy more than $2 billion of capital for the twelve months ending Q1 2024. This deployment includes M&A, mostly in our resilient businesses and a record level of co-investment commitments in REI. By thoughtfully using our balance sheet, we made targeted, opportunistic investments, while other investors have been largely on the sidelines. These investments have been underwritten at returns well above our cost of capital, and specifically our REI co-investments are projected to generate notably high returns. We also repurchased nearly 8 million shares in 2023 at a time when we believe they have been attractively valued.
Our 2024 capital deployment will be supported by improved free cash flow, which we expect to total at least $1 billion as certain headwinds reverse this year. As we previously discussed, we had several large cash expenses in 2023, mostly timing related items such as cash variable compensation and cash income taxes tied to 2022s record results that did not flex down with last year's lower earnings. We estimate that the reversal of these items alone will drive a $500 million benefit to free cash flow compared with last year. Taking all of this into consideration, we expect to end 2024 with net leverage around one turn.
Now I'll review our 2024 outlook on Slide 11. In the Advisory segment, we expect net revenue to increase by mid-to-high single digits with mid-teens SOP growth. The expected margin improvement reflects fixed cost leverage and the benefit of ongoing cost reduction initiatives. Advisory accounts for about two thirds of the $150 million run rate cost savings initiative announced last quarter, with half of the benefit being realized in 2024. These savings offset cost growth elsewhere in advisory this year, notably from higher expected discretionary compensation tied to improved financial performance.
We anticipate that capital markets revenue will grow by mid single digits. Investor sentiment has improved in the last 90 days, reflecting a better interest rate outlook. Real estate allocations are approaching target levels, and this reflects an easing of the denominator effect as public equity markets have rebounded, while private real estate values are being written down.
We expect leasing to grow modestly in 2024. We are cautiously optimistic that the worst is over for office leasing, particularly for class A properties where we generate approximately two thirds of our leasing revenue. Leading indicators from our data partner BTS indicate U. S. Office demand has been gradually turning up over the last six months. The growing consensus about an economic soft landing, coupled with the apparent stabilization of office utilization rates, may make more employers confident enough to commit to office leases. Additionally, leasing demand should remain relatively strong for industrial deals, particularly for properties under 500,000 square feet. Our remaining advisory business lines together are expected to achieve low double digit net revenue growth.
In the GWS segment, we expect mid-teen SOP growth, including the expected partial year contribution from the J &J acquisition. Continued stronger growth will be driven by broad demand across client sectors and geographies. The local business will lead growth in GWS, expected to generate more than $200 million of operating profit, as we benefit further from our investments in this business.
Our enterprise business is also seeing strong demand from both mature sectors like financial services, as well as newer adopters of outsourcing such as industrial, healthcare and life sciences companies. Within project management, significant growth will be led by Turner and Townsend, which is in the early stages of penetrating the US market. We anticipate seeing most of the revenue, in fact, from our sizable Q4 wins in the second half of 2024 as new clients are onboarded. And even with a record level of conversions in Q4, our GWS pipeline ended 2023 10% higher than the prior year.
Shifting to REI, we expect SOP in 2024 to be slightly below 2023s level. Note that last year's SOP included a single development portfolio sale, which generated more than $100 million of profit in Q1. In investment management, we expect operating profit to increase modestly from 2023 as stabilizing market conditions drive higher promote fees and improved co-investment returns. We expect development operating profit will be subdued this year as the projects we expect to monetize will be sold at higher cap rates than we underwrote at the peak of the prior market cycle.
At current market cap rates, we have hundreds of millions of dollars of operating profit embedded in our in process portfolio and a pipeline of new opportunities with an attractive spread between our cost of development and current market values. On balance, we are cautiously optimistic about 2024. Our expectation of achieving core EPS of $4.25 to $4.65 is contingent on long term interest rates remaining around current levels, the Fed proceeding with the anticipated short term rate cuts, and the US economy avoiding a recession.
This year's earnings are likely to be more heavily weighted than usual to the second half. The third and fourth quarters are expected to account for approximately two thirds of core EPS, while the first quarter will contribute a mid-teens percentage of the annual total. This distribution is similar to what we experienced in 2021, when we all also had a second half recovery.
We continue to see a path to returning to our prior core EPS peak in 2025. That path is supported by continued double digit growth in our resilient businesses and a gradual recovery in our transactional businesses. Importantly, CBRE can reach prior record earnings without our transactional businesses SOP rebounding to 2019 levels.
With that operator, please open the line for questions.
