- CBRE, JLL, Cushman & Wakefield, Colliers, and Newmark all posted strong Q2 results and raised 2025 guidance, the first such collective move since the pandemic began.
- Demand for prime “trophy” office space is spilling into well-located second-tier buildings, fueled by return-to-office mandates from major employers.
- While leasing activity is rebounding faster than sales, headwinds like high interest rates, tariffs, and slowing job growth remain potential obstacles.
CoStar reports that after years of volatility and uncertainty, the commercial real estate sector is showing clear signs of sustained momentum. The five largest property services firms — CBRE, JLL, Cushman & Wakefield, Colliers, and Newmark — all raised their full-year financial outlooks in the same quarter for the first time since 2020. Boosted by strong leasing activity, property sales, and management fees, these companies are reporting some of their best earnings in years.
A First in Years
The synchronized upgrade in guidance reflects renewed dealmaking activity across office, industrial, and multifamily sectors. Industry leaders say buyers, sellers, and tenants are making concessions to close deals, reversing the cautious approach that defined much of the past three years.
The Details
- CBRE’s global leasing revenue hit a second-quarter record, driven by office demand.
- JLL’s Q2 profit climbed 33% to $112.3M, marking its fifth consecutive quarter of double-digit revenue growth.
- Cushman & Wakefield reported a strong deal pipeline heading into the second half of the year.
- Smaller brokerages like Stream Realty Partners and Coldwell Banker Commercial are also seeing marked upticks in activity.
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Leasing Momentum
The flight-to-quality trend remains strong, with demand concentrated in high-end buildings in prime locations. In Chicago’s West Loop and similar markets, tenants priced out of “trophy” properties are increasingly turning to competitive second-tier spaces. Return-to-office mandates from companies like JPMorgan Chase, Amazon, and federal agencies are also pushing more long-term leasing decisions.
Why It Matters
Industry analysts say leasing activity is recovering more quickly than investment sales, which are still weighed down by elevated interest rates. Nonetheless, REITs like Piedmont Realty Trust and Hudson Pacific Properties are reporting their strongest leasing years since before the pandemic. The uptick suggests the sector is in the “early innings of a strong capital markets recovery.”
What’s Next
Executives expect the recovery to continue into 2026, barring major economic disruptions. While high vacancy rates — currently at a record 14% — remain a concern, market confidence is the highest it’s been in years. As political and economic uncertainty persists, more companies are choosing to move forward rather than wait on the sidelines.
