CBRE Sees Capital Markets Flat Into 2027 — Infrastructure Services Must Carry The 15% Earnings Path
CBRE's CFO said deal activity slowed in September and will stay flat into early 2027, with infrastructure work offsetting the drag.
CBRE Group, the commercial real estate services giant, said on its third-quarter earnings call Thursday that rising interest rates are slowing its deal-driven businesses, but that fast-growing infrastructure services still leave it a path to 15% core earnings growth in 2027. Chief Financial Officer Emma Giamartino said capital markets should be roughly flat in the fourth quarter and the first half of next year.
Deals retraded, refinancings replace sales
Giamartino said capital markets slowed through the third quarter, "particularly in September." What the company needs, she said, is for rates to stabilize, because volatility is driving buyers and sellers to pause or push deals into 2027.
Chairman and CEO Bob Sulentic described the pressure plainly: "Deals that were under contract are getting retraded." Cap rates have risen, deals that might have gone under contract are not happening, and some expected sales have become refinancings. He said uncertainty about rates, not only their level, is part of the drag, and that it could settle in the back half of next year. "None of us know what's going to happen," he added.
Sulentic said the impact reaches investment sales, mortgage origination, development and investment management. Giamartino added that if stability does not come, results will differ.
Nearly $7 billion of infrastructure revenue
CBRE, which provides commercial real estate services and investment management and owns Turner & Townsend and Trammell Crow Company, has shifted toward steadier, recurring lines to cushion swings in sales and leasing. Management expects critical infrastructure services, a business line housed in its Building Operations & Experience segment, to generate nearly $4.5 billion of revenue in 2027. Counting infrastructure work across the company, total infrastructure services revenue should reach nearly $7 billion, growing more than 40% from this year. Data center land sales in development would come on top.
Critical infrastructure revenue rose 80% in the third quarter on hyperscaler demand for data center services and the Pierce acquisition. Core EPS rose 28% on a 13% revenue increase. CBRE kept its 2026 core EPS guidance at $7.80 to $7.90, which Giamartino said reflects 23% growth at the midpoint.
Asked by a JPMorgan analyst how the 2027 target had changed, Giamartino said advisory will moderate more than the company expected 90 days ago but still grow, while the outlook includes the ONIC acquisition and likely more M&A. Sulentic said CBRE controls more than 20 sites that could be sold as data center land, but called such sales choppy and impossible to forecast by quarter.
Buybacks give way to deals
Giamartino said CBRE slowed repurchases in the third quarter ahead of the ONIC deal and expects that through the fourth. If the M&A pipeline converts in 2027, she said, repurchases should decline "pretty meaningfully." The company expects ONIC to close around the end of the year.
Sulentic also said two enterprise facilities accounts are being restructured, which will weigh on that business's fourth-quarter earnings. He said it is not indicative of the business more broadly.
Giamartino said CBRE expects rate stability in the back half of next year; if it does not arrive, she said, \"the results will be different.\"
Sources
- CBRE (NYSE:CBRE) reports sales below analyst estimates in Q3 2026 earnings — Yahoo Finance
- CBRE Group (CBRE) Q3 Earnings Surpass Estimates — Yahoo Finance
- CBRE (CBRE) Q3 Earnings: What To Expect — Yahoo Finance
- Unveiling CBRE (CBRE) Q3 Outlook: Wall Street Estimates for Key Metrics — Yahoo Finance
- CBRE Non-GAAP EPS of $2.05 beats by $0.10, revenue of $11.5B misses by $400M (CBRE:NYSE) — seekingalpha.com
