Data Centers Fuel Brokerage Profits — And the Wider Economy

UBS projects $375B in data center spending this year alone, and brokerages are cashing in with high-margin services.

Jordan B.
August 28, 2025

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Good morning. Data centers are no longer a niche asset class. They’re the backbone of brokerage revenues and one of the few bright spots in today’s economy.

Today’s issue is brought to you by Aspen Funds—direct investment in cash-flowing energy assets.

We’re tracking whether CRE investors are leaning in or pulling back—across multifamily, industrial, retail, and office. Take the Q3 Fear & Greed Survey.

Market Snapshot

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FTSE NAREIT

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10Y Treasury

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SOFR

30-DAY AVERAGE

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*Data as of 08/26/2025 market close.

Profit Engine

Data Centers Fuel Brokerage Profits — And the Wider Economy

Soaring demand for A.I. computing power has turned data centers into the hottest asset class in CRE, and the ripple effects are boosting the broader economy.

Brokerages pivot: Big firms like CBRE, JLL, Newmark, Colliers, and Cushman & Wakefield are leaning into data center services—financing, project management, and advisory—to offset slowing office revenues. CBRE grew its data center profit share from 3% in 2021 to 10% in 2024 and now manages more than 700 sites.

Trillions in new investment: UBS estimates $375B in global data center spending this year, rising to $500B in 2026. Brookfield Asset Management pegs the next decade’s A.I. infrastructure tab at $7T. In the US, data center construction has already surpassed office construction.

Boosting the economy: The buildout is driving growth well beyond real estate:

Construction giant Skanska expects 13% annual growth in data center construction through 2029.
A million metric tons of cement will be needed, according to industry forecasts.
Trades from electricians to engineers are benefitting, even as housing and warehouse projects stall.

Some warn of a bubble: Most A.I. tools aren’t profitable yet, and Sam Altman warns the industry may be “overexcited.” Still, long leases and near-zero vacancies cushion risk. The bigger challenge is resources — data centers devour power, water, and materials — and local pushback is growing, with some communities imposing moratoriums.

➥ THE TAKEAWAY

Big picture: Data centers are reshaping both CRE business models and the broader economy. Brokerages see steady margins, builders see a growth engine, and tech firms see necessity. But power constraints and profitability questions could test just how long the boom lasts.

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✍️ Editor’s Picks

AI-Powered Deal Flow: Institutional investors, family offices, and HNW individuals use Agrippa to access vetted CRE opportunities spanning all asset classes nationwide. Join today to find your next strategic partnership. (sponsored)
Loan reckoning: Trepp reviewed $133.2B in maturing CMBS loans, revealing repayment trends and fallout across the CRE landscape.
Bidding rebounds: JLL’s Global Bid Intensity Index ticked up in July 2025 for the first time in months, signaling a return of competitive investor activity.
Market shift: CRE activity is stirring in 2Q 2025 as cap rates stabilize and originations rise, despite high interest rates.
REIT resilience: Despite market headwinds, US public equity REITs posted solid NOI growth in Q2, with over 60% reporting YoY gains.
Northern edge: Canada’s CRE market is outpacing the US due to faster population growth and lower interest rates, per Colliers.
Spread shrinks: Mortgage spreads have dropped to a 3-year low, helping lower rates for buyers and refinancers, even without a Fed rate cut.
Banker boom: Wall Street banks ramped up hiring in 2025 as dealmaking rebounded after tariff-related delays.

🏘️ MULTIFAMILY

EQR steady: Equity Residential posted solid Q2 results with 3% blended rent growth and strong urban performance.
Portfolio power: PGIM provided $619M in fixed-rate financing for HHHunt’s 15-property multifamily portfolio across the Southeast.
Rent revolt: Tenants at five Rogers Park buildings are forming a union and weighing a rent strike after a new owner hiked rents by up to $500.
Passive power: Alloy raised $535M to build One Third Avenue in Brooklyn, set to be the world’s tallest passive house with 153 affordable units and mixed-use space.

🏭 Industrial

Robotics ramp-up: Hyundai is increasing its U.S. investment to $26B through 2028, with plans for a major robotics facility and a new steel mill.
Industrial upswing: Smaller industrial deals hit $5.9B in Q2, helping the sector claim 24% of all CRE sales as e-commerce demand, led by Amazon, continues to drive warehouse activity.
Texas bet: BKM Capital bought $90M in Texas industrial assets, targeting value-add returns amid tight small-bay supply and strong NOI upside.
Suburban surge: Developers are targeting Vernon and nearby suburbs for new data centers, attracted by surplus power and rising demand for AI-ready infrastructure.

🏬 RETAIL

Theft drop: New York’s organized retail theft is down 12% amid stronger enforcement and policy reforms.
Retail rebound: LA retail demand improved sharply in Q2, with net absorption losses narrowing by over two-thirds and sales volume jumping to $540M.
Tweens targeted: Claire’s has reduced its planned store closures to 291 locations after a $140M acquisition deal.
Blue law battle: Paramus is suing the American Dream mall for allegedly violating Sunday retail bans, reigniting a legal clash over Bergen County’s centuries-old blue laws.

🏢 OFFICE

Sale slump: Rising vacancies, high interest rates, and maturing loans are pushing down U.S. office sale prices, with nearly half of recent transactions closing below prior values.
Loan collapse: Brookfield has lost two suburban office properties from a 12-asset portfolio amid foreclosure proceedings following a 2023 loan default.
Lease renewal: The SEC will remain at One Penn Center in Philadelphia after reversing plans to terminate its lease.
HQ auction: The former Zendesk headquarters in San Francisco is headed for foreclosure after losing nearly 80% of its value.

🏨 HOSPITALITY

Boutique reboot: The Royal Beach Palace reopens in October as The Garden Hotel & Resort, following a full renovation and rebrand.
Discount deal: The Sheraton San Jose sold for $20M—20% below its 2023 price—marking Silicon Valley’s largest hotel trade this year.

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📈 CHART OF THE DAY

Distress in U.S. commercial real estate shifts into lower gear

U.S. CRE distress slowed in Q2 as more troubled loans were resolved than added, though over $100B in unresolved distress—especially in offices—keeps risks high.