- JPMorgan analysts cut their Q4 investment sales and mortgage origination revenue forecast for the largest brokerages to flat year over year from 10% growth, after Treasury yields whipsawed in October.
- JLL, Cushman & Wakefield and Colliers see little pipeline damage, while Newmark warns industry volume could fall 20% to 30% in 2027 if rate volatility persists.
- Executives say stability matters more than the rate level, with some deals slipping into Q1 and multifamily seen as the most exposed asset class.
Rate swings have left the largest CRE brokerages expecting a flat fourth quarter in capital markets, Bisnow reported, after the 10-year Treasury topped 5.3% in early October and then slid to about 4.8%.
The timing stings. Q4 has historically delivered about 30% of a year’s capital markets revenue, and December alone about 15%.
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
What the Analysts Expect
According to Bisnow, JPMorgan’s analysts now expect flat year-over-year Q4 revenue from sales and debt placement across CBRE, JLL, Cushman and Colliers. Previously, they had forecast 10% growth. They called some disruption highly likely, but said the expected declines are milder than in past downturns.
Their 2027 outlook is rougher. They project a 20% drop in Q1, narrowing to 10% in Q2. Revenue would then flatten in Q3 before returning to 10% growth in Q4. JPMorgan’s Anthony Paolone said this shock is unusual because leasing and fundamentals are not weakening at the same time. Therefore, a rate-driven disruption could clear faster.
Brokerages Diverge
Year-to-date capital markets revenue through Sept. 30 is up 21% at JLL, 14.5% at Newmark and 10% at Cushman & Wakefield, Bisnow reported.
Christian Ulbrich, who runs JLL, said during its earnings call that most Q4 deals should still close this year. We also reported that higher rates delay deals without killing them. JLL’s guidance implies flat to low-single-digit Q4 growth.
Cushman CEO Michelle MacKay said her pipeline has barely moved. She added that rate-sensitive multifamily accounts for less than 15% of capital markets revenue. Meanwhile, Colliers’ Christian Mayer said pipelines will still grow, just less than planned.
CBRE CEO Bob Sulentic took a harsher tone. He said cap rates are up, contracted deals are being retraded and some expected sales are turning into refinancing. Marcus & Millichap CEO Hessam Nadji said volatility, rather than the higher level of rates, is the bigger problem.
Deals Slide Toward Q1
Lightbox data show listings rose 24% in September from August. However, environmental assessments and appraisals fell. Lightbox’s Dianne Crocker said this suggests deals are entering the pipeline but not advancing through underwriting and financing.
Colliers broker Tyler Ziebel said buyers kept calling, but pauses meant to last weeks stretched on. As a result, some dealmakers concluded that waiting for Q1 made more sense. He called it a math problem rather than a fundamental one.
Newmark Sounds the Alarm
Newmark was the most bearish. CFO Michael Rispoli said on its call that he expects industry volumes to remain lower well into next year, at least through June. He also warned that sustained volatility and higher Treasury yields could cut capital markets activity by 20% to 30%. Still, his base case is a good year.
KBW’s Jade Rahmani called that downside scenario quite stark on the call. He later said multifamily is most exposed because it has the lowest cap rates. By contrast, office has a cushion after its earlier repricing. KBW models low- to mid-single-digit Q4 volume declines, with weakness becoming clearer in Q1 2027.
Why It Matters
Stability, not the level of rates, is what buyers and sellers are asking for. We reported that MetLife says higher rates are prompting re-trading on roughly half of deals under contract.
Heitman’s Gordon Black said he has capital to deploy but is staying selective in what he calls choppy waters. Rahmani added that prolonged volatility could eventually lead to headcount cuts, though he has not seen them at brokerages yet.
What’s Next
More than 80% of traders expect a 25-basis-point Fed hike in December, according to CME Group’s FedWatch tool. Whether Treasury yields settle will determine how many deals close in December and how many wait until Q1.
