- CBRE’s chair and CEO said higher rates and rate uncertainty are causing contracted deals to be repriced, delayed or dropped, and some expected sales are becoming refinancings instead.
- Q3 revenue rose 13% to $11.5B and net income 22% to $443M, with global property sales revenue up 28% and data center infrastructure revenue up 80%.
- Executives expect capital markets weakness to run into next year while corporate real estate spending slows as big tech shifts budgets to data centers, so CBRE keeps pivoting to infrastructure.
Rising interest rates are forcing buyers and sellers to reprice deals, CBRE executives said on the firm’s third-quarter earnings call, CoStar News reports.
Some contracts are being renegotiated, some are dying, and some expected sales are turning into refinancings.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Uncertainty Is the Problem
Bob Sulentic, who chairs and runs CBRE, said the problem goes beyond where rates sit: it is how unsure everyone is about them. He thinks that fog could lift in the second half of 2027, though he admitted no one can say for sure.
Sulentic said the hit reaches investment sales, loan originations, development and fund management. CBRE also saw transaction activity cool in September and expects that softness to linger into 2027.
Stable rates are what the market needs, he said. The swings are making some buyers pause, hold or push closings into 2027.
A Strong Quarter First
The slowdown follows a solid third quarter. Revenue rose 13% to $11.5 billion, and net income attributable to CBRE climbed 22% to $443 million.
Property sales revenue worldwide grew 28%, and U.S. sales revenue jumped 37%, led by industrial and retail. Industrial leasing revenue rose 16% to set a record for a third quarter.
Data Centers Carry the Pivot
Data center infrastructure revenue jumped 80%, helped by big tech demand and last November’s $1.2 billion Pearce Services purchase. This week CBRE added Onnec Group, a deal we covered as CBRE’s Onnec purchase worth up to $1 billion.
By 2027, CBRE projects critical infrastructure services will bring in close to $4.5 billion. The wider infrastructure unit is forecast to near $7 billion, an increase of over 40% from 2026.
The firm kept its full-year core earnings outlook at $7.80 to $7.90 per share. CFO Emma Giamartino said softer capital markets growth will trim infrastructure gains, yet she still sees a route to 15% core EPS growth in 2027.
Corporate Spending Cools
Executives said growth in project management slowed because corporate clients are spending less on real estate. Sulentic pointed to economic uncertainty making those clients more conservative.
He added that some big tech clients have redirected budgets from conventional property into data centers and other critical infrastructure.
Why It Matters
CBRE’s view lines up with what buyers are doing. Earlier this month, buyers were retrading signed deals for price cuts after bond yields rose and the Fed hiked in September.
The firm is also steering toward businesses that depend less on the property cycle, a signal of how much transaction volume now hinges on the rate path. The Fed’s own minutes suggest another hike is possible, so the uncertainty CBRE describes may not clear soon.
What’s Next
Giamartino said CBRE’s acquisition pipeline is deep, with deals possible this quarter or early in 2027. For the market, watch whether rates stabilize in the second half of 2027 as Sulentic hopes.
