- CBRE posted better-than-expected earnings in Q4, driven by a 28% surge in US office leasing revenue and strong property sales.
- Office leasing showed sustained growth for two quarters straight, particularly in gateways like New York, San Francisco, and Los Angeles.
- The company continues to expand its data centers, flexible workspaces, and property management, with higher global property sales.
- CBRE remains cautious but expects continued growth, with projected earnings per share of $5.80–$6.10 for 2025.
CBRE Group (CBRE), the world’s largest commercial real estate services firm, reported better-than-expected Q4 earnings.
The Dallas-based company saw a strong surge in office leasing activity, with US revenue rising 28% compared to Q3, as reported by CoStar.
Notably, this marks a shift from years of sluggish leasing and suggests optimism heading into 2025.
Office Leasing Leads
For the second consecutive quarter, CBRE saw robust office leasing growth, with US revenues rising. CFO Emma Giamartino highlighted that New York led the recovery, but other gateway markets like San Francisco, Los Angeles, Chicago, DC, and Boston also saw significant improvements.
Notably, secondary markets like Dallas, Atlanta, and Seattle also outpaced the national trend. This broad-based recovery across major and secondary cities has given CBRE confidence that office leasing will continue to rebound in 2025.
The company’s performance is particularly notable given the long-standing uncertainties in the US office market, fueled by hybrid work trends and fluctuating demand. However, CBRE’s latest results suggest more companies are committing to larger and longer leases.
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Growing in All Directions
In addition to strong office leasing, CBRE also reported 35% higher global property sales revenue, with US sales activity up 37%. The firm is optimistic about continued growth, with an early 20% bump in US sales activity through the first six weeks of the year.
However, despite these numbers, CBRE is still cautious and mindful of potential changes in interest rates and market conditions, which could be black swan events.
To ensure long-term growth, CBRE has been diversifying its business. In Q4, revenue from its property management and valuation services segment shot up 16%, contributing to its best quarter on record for core earnings and free cash flow.
The company has also been expanding its footprint in the fast-growing data center and coworking sectors. CBRE’s recent $400M acquisition of a controlling stake in the flexible workspace company Industrious is part of a broader strategy to integrate coworking spaces into its operations.
Meanwhile, CBRE is also expanding its project management division through a partnership with Turner & Townsend, strengthening its position in the rapidly growing data center market.
Cautious Optimism
Looking ahead, CBRE has issued a forecast of $5.80 to $6.10 earnings per share for 2025.
While deal activity remains muted compared to previous cycles, the company remains very optimistic about future demand in its diversified business lines, particularly in data centers, flexible office spaces, and property management services.
