CBRE Bets on Data Centers as Property Sales Freeze

CBRE Group earned $2.05 of core earnings per share in the third quarter, a 28.1% rise that beat 12.7% revenue growth to $11.517 billion. Chair and CEO Bob Sulentic told investors on October 22 that the firm is still buying data-center work even as higher rates stall property sales.

Two days earlier, CBRE agreed to buy London-based Onnec Group for £460 million in cash, with extra payments that can lift the price to £760 million (about $1.01 billion). That check is how Dallas plans to keep a 15% earnings gain in reach for 2027 if investment sales and mortgage origination stay frozen into late next year.

Core Profit Jumped 28.1% on Slower Sales Growth

The quarter ended September 30. GAAP net income rose 22.0% to $443 million, or $1.52 a share, from $363 million, or $1.21, a year earlier. Core adjusted net income was $599 million, and core EBITDA rose 28.5% to $1.001 billion. Revenue of $11.517 billion missed a $11.77 billion consensus figure, while core EPS of $2.05 topped a $1.96 estimate from 11 analysts. Shares fell 2.53% on October 22.

Q3 2026 VERSUS Q3 2025

Advisory Services, the unit that houses leasing, sales and debt, grew 11.0% to $2.441 billion, and profit in the unit rose 15.9% to $467 million. Global property sales revenue jumped 28%, including 37% in the United States, where industrial and retail led. EMEA sales rose 8%, with the United Kingdom up 33%. APAC sales rose 10%.

Leasing was slower. Global leasing revenue rose 6%, with EMEA up 21% and the United States up 4%. U.S. industrial leasing rose 16%, a third-quarter record, while office leasing fell 2%, a dip Sulentic tied to large deals slipping into the fourth quarter. APAC leasing rose 2%. Mortgage origination inched up 1% as private lenders gained and government agencies lost share. The loan servicing book rose 8% in the quarter to more than $500 billion, though servicing revenue slipped a little when escrow income fell.

CBRE kept full-year core EPS guidance at $7.80 to $7.90, 23% growth at the midpoint. Free cash flow was $927 million in the quarter and $1.8 billion over the trailing 12 months. Cash from operations was $869 million in the quarter and $1.4 billion on the same trailing basis.

A £760 Million Ceiling on the Onnec Deal

Onnec is the Europe and Asia Pacific piece of a bet CBRE started in the United States last year. The firm announced a deal on October 20 for the London company, which designs, installs and maintains network, fiber and data-center kit for large cloud clients. About 800 staff work across the United Kingdom, continental Europe and Asia Pacific. Founded in 1986, Onnec will sit inside Critical Infrastructure Services if regulators clear the deal around the end of 2026.

The cash price is £460 million, about $610 million, plus a multi-year earnout of up to £300 million if growth hurdles are met. CBRE expects Onnec to produce about £370 million of revenue and more than £50 million of core EBITDA in 2027, and it said the deal would lift core EPS from day one. Chief Financial Officer Emma Giamartino told the call that a full earnout would push the total above $1 billion.

That follows Pearce Services. On November 4, 2025, CBRE paid approximately $1.2 billion in cash for the Paso Robles, California, technical-services firm, with up to $115 million more tied to 2027 results. Pearce had more than 4,000 employees in North America and India. CBRE then forecast more than $660 million of Pearce revenue and more than $90 million of EBITDA in 2026, with 34% of 2025 revenue from critical power and cooling, 30% from renewables, 29% from wireless and fiber, and 7% from EV charging.

TWO CHECKS FOR DATA CENTER WORK

Vikram Kohli, CBRE’s chief operating officer, put the strategy in one line: build a global infrastructure-services arm beside the old real-estate business, and buy firms that ride long demand rather than the property cycle. Barry Horgan, Onnec’s chairman, said the firm’s job has been connectivity for clients, some of them for more than 30 years, and that CBRE’s platform lets it widen that work.

CBRE is pursuing an explicit strategy to build a global infrastructure services business to complement our real estate services business. We’ve long believed Onnec is an excellent fit in this strategy.

Vikram Kohli, Chief Operating Officer, CBRE Onnec announcement

Giamartino called Onnec a sample of the companies CBRE wants in the United States and abroad, and she said a “strong pipeline” of deals could land in the fourth quarter or next year.

After the September Hike, Signed Deals Came Back

The sales boom in the third quarter already looked dated by the call. Capital-markets activity cooled in September, executives said, and they expect that softness to run into 2027. Rising cap rates are forcing some contracts to be repriced. Other trades have died. Some planned sales are turning into refinancings instead of closings. The hit, Sulentic said, reaches investment sales, mortgage origination, development and investment management.

The Federal Reserve raised its target range by 25 basis points on September 16, to 3.75% to 4.00%, the first hike since 2023. The 10-year Treasury yield settled at 5.11% on September 23, a level last seen in 2007, and was 5.28% on October 7. Treasury data put the 10-year at 5.13% on October 21. A Colliers capital-markets snapshot for the third quarter put industrial cap rates near 5.1%, with multifamily at 5.4% and office at 7.4%. When the 10-year sits above 5%, that industrial spread is thin.

THE DATES BEHIND THE PAUSE

1. November 4, 2025: Buys Pearce Services for $1.2 billion in cash, plus up to $115 million later.
2. September 16, 2026: The Fed lifts the funds rate 25 basis points, to 3.75% to 4.00%.
3. October 20, 2026: Agrees to buy Onnec for £460 million, plus up to £300 million more.
4. October 22, 2026: Reports Q3 results and says some deals are slipping into 2027.

LightBox counted 1,683 commercial closings in September, down from 1,803 in August, even as listings jumped 24% on the month and stood 32% above September 2025. More owners put buildings on the market. Fewer trades closed. The next Fed meeting is October 27-28, and minutes from the September session said most officials saw another hike as likely by year-end. That is the uncertainty Sulentic keeps naming, not only the level of the rate.

What we really need is for rates to stabilize. The volatility and the uncertainty is what’s driving a pause or hold or even delaying deals to 2027.

Bob Sulentic, Chair and CEO, CBRE Q3 2026 earnings call

He added that part of the problem “isn’t just the interest rate situation, and what interest rates are, but what the uncertainty” around rates is, and that the fog “could settle out in the back half of next year.” Executives said capital markets look roughly flat through the first half of 2027. Global leasing is seen growing at a low double-digit rate in the fourth quarter, then at a mid-to-high single-digit pace in 2027, as delayed office deals close.

Why Corporate Clients Cut Traditional Real Estate Spend

Project Management revenue rose only 2.9% to $2.035 billion, and pass-through costs fell 4.3%. Profit in the unit rose 9.5% to $162 million, and would have risen 15% without a one-time cost from a client default in Asia Pacific, a six-point hit. Infrastructure program-management and cost consulting grew. Corporate spending on ordinary real estate did not.

Sulentic listed a mix. Some companies are simply cautious because the economy feels uneven. Large technology clients have also moved money out of “traditional legacy real estate investment” and into critical infrastructure and data centers. Facilities management still grew 13%, led by technology, financial services and energy accounts, so the same clients have not vanished. They have changed what they will pay for.

Office leasing already fell 2% in the United States. Sulentic said some of that is timing, with large deals booked for the fourth quarter. The deeper shift is budget math. A dollar that used to go to a new workplace now goes to power, cooling and white space inside a data hall. CBRE still leases warehouses, and industrial leasing is the bright line in Advisory. The office side of the same firm is waiting on a rate path it does not control.

Building Operations & Experience, the largest segment, is where that redirected spend lands. Revenue there rose 17.4% to $6.856 billion, and profit rose 20.8% to $349 million. The unit now includes facilities management, property management, flex space and critical infrastructure. CBRE has more than 20 data-center land sites under control for hyperscale clients, and Real Estate Investments booked $166 million of segment operating profit, up from $73 million, on data-center land sales and other asset sales. Embedded gains in the development book are about $800 million after a mark for higher rates. Land sales would sit on top of that sum.

An 80% Jump That Now Has to Carry 2027

Critical infrastructure services revenue jumped 80%, the figure that now has to do the work sales and lending may not do. Giamartino pointed to hyperscaler demand for data-center services and to Pearce, bought in November 2025. Trailing-12-month infrastructure services revenue, the broader mix of critical work plus related jobs in Project Management and Advisory, rose 50% to $4.5 billion. If Onnec had been inside the house for the past year, the narrower Critical Infrastructure Services line would have done at least $3 billion.

INFRASTRUCTURE TARGETS FOR 2027

• Critical infrastructure line: Nearly $4.5 billion of revenue, including Onnec, for network work, mechanical and electrical projects, and data-center facilities management.
• Other infrastructure work: Almost $2.5 billion from Project Management and Advisory on transport, energy and data-center assets, plus sales, leasing and financing of those assets.
• Combined 2027 target: Nearly $7.0 billion, more than 40% above 2026, and not counting periodic data-center land sales.
• Onnec’s slice: About £370 million of revenue and more than £50 million of core EBITDA, counted inside the $4.5 billion critical line.

Those 2027 figures are a plan, not a run rate. The $4.5 billion trailing number and the $4.5 billion 2027 critical-line target are different piles: one is last year’s mixed infrastructure work, the other is next year’s dedicated line after Onnec closes. Sulentic warned that higher debt costs could yet slow data-center building around the world. The services CBRE is buying still get paid to pull fiber and keep cooling plants up even when a developer’s exit yield looks worse than the model. Shells underwritten off cheap debt now have to clear borrowing costs near the same level as an unlevered yield in the high single digits, which is why the money that still spends freely is going to cabling, power and cooling rather than the next office tower.

Investment management did not help. Operating profit there fell 12% as higher recurring fees were offset by weaker co-investment returns. Assets under management ended above $155 billion after about $2 billion of new capital, up from $1.6 billion in the second quarter. The Real Estate Investments story in the quarter was the land and the asset sales, not the funds.

A Smaller Buyback as the Deal Pipeline Fills

CBRE spent nearly $1.2 billion buying its own shares this year, then slowed in the third quarter so it could pay for Onnec. Management said buybacks will drop again in the fourth quarter as deals take priority. Net leverage was 1.36 times core EBITDA at quarter-end, with $5 billion of liquidity. The firm still aims to convert 75% to 85% of earnings into free cash flow this year and to finish 2026 a little above one turn of leverage.

HOW THE PIVOT GETS PAID FOR

• Buybacks: Nearly $1.2 billion year to date, now being cut so cash can fund deals.
• Onnec cash: £460 million at close, with up to £300 million later if growth holds.
• Balance sheet: 1.36 times net leverage and $5 billion of liquidity at quarter-end.
• Cash engine: $1.8 billion of trailing-12-month free cash flow, with a 75% to 85% conversion target for the year.

Giamartino said the Onnec template is the kind of company CBRE wants more of, in the United States and overseas. The fourth quarter and 2027 are the window she named. Building Operations will take a fourth-quarter hit from the restructuring of a couple of accounts, Sulentic said, a cost he described as specific to those contracts rather than a sign the wider unit is breaking. Advisory profit growth is expected to cool. The Project Management profit outlook stayed in the mid-teens. The BOE profit outlook was lowered.

The 15% Target Hinges on Rates Settling Next Year

Giamartino laid the 2027 math out as two forces that cancel. Infrastructure keeps growing. Capital-markets businesses grow less, or not at all, until rates stop jumping around. Out of that mix she still sees “a path to 15% core earnings-per-share growth in 2027.” The path is not a guarantee. It assumes the Onnec close, more of the same kind of deals, and a rate market that, in Sulentic’s words, settles in the back half of next year.

We expect to see continued growth in our infrastructure business. This will be somewhat offset by lower growth in our real estate capital markets drive businesses. As a result, we continue to see a path to 15% core earnings-per-share growth in 2027.

Emma Giamartino, Chief Financial Officer, CBRE Q3 2026 earnings call

CBRE employs more than 155,000 people in more than 100 countries and is still, on 2025 revenue, the world’s largest commercial real-estate services firm. The P&L is no longer only leases and sales. Critical infrastructure is being asked to fund a 15% earnings climb while the old engine idles, and the stock still fell 2.53% on the day of the beat because that warning landed louder than the 28.1% rise in core EPS. The Onnec close is due around the end of 2026. Until rates stop moving, the firm’s own guidance says investment sales and originations wait.

Disclaimer: This article is news reporting and analysis of CBRE Group’s third-quarter 2026 results, its Onnec and Pearce transactions, and related market figures. It is for information only and is not investment advice, a recommendation to buy or sell any security, or a forecast of CBRE’s share price, earnings or deal outcomes. Readers should consult a licensed financial adviser or other qualified professional before making any investment decision. Figures, ratings, deal terms and statuses reflect the company releases, earnings call and market data cited here and may change as the Onnec close, Federal Reserve policy and commercial property trading develop.