Don't buy the buildings; buy the brokers

When I started my commercial real estate (CRE) career in 1988, it was through a brokerage firm. That was my first job out of college.

I quickly realized that I wanted to strike off on my own as a developer. But even then, I worked with almost all the major brokerage firms along the way.

They were often essential in identifying sites, arranging financing, and negotiating leases. The best of these brokers weren’t just salespeople. They were advisors who understood property development inside and out.

That’s why I’m well aware of how much money one can make in CRE without ever owning the actual buildings.

Now, the industry admittedly looks a lot different today thanks to globalization. Many of these companies that used to rely on investment sales and leasing commissions are now enormous real estate service platforms with institutional clients.

They manage corporate facilities, oversee construction projects, and back data center development. You could even call them CRE toll collectors considering how much they control without actually owning the properties in question.

This definitely seems to apply to CBRE Group (CBRE), Jones Lang LaSalle (JLL), Cushman & Wakefield (CWK), and Newmark Group (NMRK). These publicly traded companies each offer a different investment angle into the CRE world that I find compelling.

Then again, there are risks to consider as well, as I explain further in today’s article down below.

By my evaluation, CBRE Group is the most diversified of these four brokerage companies. It’s involved in everything from leasing to property management, investment management, the capital markets, and critical infrastructure services.

And if CBRE’s third-quarter results are any indication, those many divisions are serving it well.

Normalized earnings beat consensus expectations by about 5%, rising 28.1% year over year to $2.05 per share. And since management maintained its full-year earnings per share (EPS) guidance, it’s expecting around 23% annual earnings growth.

What really caught my attention, however, was CBRE’s expanding data center exposure. That was the driving force behind its Real Estate Investments division generating $166 million in operating income.

That’s up 127.4%!

Revenue at its Critical Infrastructure Services – a division that heavily includes data center considerations – increased 80% year over year. And the company also announced plans to acquire Onnec Group, a data center infrastructure services provider in Europe and Asia-Pacific.

If successful, that bid would expand CBRE's Critical Infrastructure Services revenue from around $2.5 billion to $3 billion on a pro forma trailing basis. I don’t know about you, but I like the sound of that.

Meanwhile, CBRE's balance sheet looks healthy overall. Its net debt to EBITDA (earnings before interest, taxes, depreciation, and amortization) fell from 1.6x to 1.4x in Q3. And it repurchased $218 million worth of shares.

I am, admittedly, concerned about separating CBRE’s recurring infrastructure earnings from its more cyclical data center land sale profits. Those two streams shouldn't necessarily command identical valuation multiples.

However, this global brokerage firm’s scale, client list, and expanding services are all impressive and quite possibly worth buying into – at the right price.

Our next global brokerage firm contender, Jones Lang LaSalle (JLL), operates across over 80 countries on all six habitable continents. And it has quite the impressive current combination of balance sheet strength and earnings growth.

Second-quarter revenue rose 11% to $6.93 billion. Adjusted EBITDA surged 32%, and adjusted EPS rose a whopping 59%, pointing to overall noteworthy operating leverage.

Better still, JLL has a substantial pool of recurring management contracts that supports revenue even when other transaction activity weakens. And I also have to point out the approximately 340 data centers it manages.

Yet its higher-margin advisory businesses are where the company really shines. Its Capital Markets Services and Leasing Advisory divisions both saw Q2 revenue rise at 19% and 24%, respectively.

Then there’s its global office-leasing revenue, which increased 20%. Since the broader competitive market only saw about 2% growth, it seems reasonable to wonder if JLL is capturing more market share here.

All that growth came with declining net leverage from 1.2x in Q2-25 to just 0.7x in Q2-26. And JLL repurchased about $410 million worth of shares in H1-26, up from $61 million in H1-25, which should support further EPS growth from here.

The company’s management services do feature relatively thin operating margins, admittedly. So earnings are sensitive to both leasing and capital markets activity.

However, it’s still an easy contender in this battle of the global brokerage firms. There’s a whole lot to like about JLL.

Next up is Cushman & Wakefield (CWK), which represents a bit of a different investment opportunity.

CBRE and JLL, for their parts, have diversified platforms and relatively strong balance sheets. But Cushman & Wakefield’s biggest upside could come whenever CRE transaction volumes recover.

This isn’t to say it’s not doing well right now. The company's Q2 results included:

Leasing revenue was particularly impressive since it jumped 27% after climbing 19% in Q1. And it actually surged 35% in the Americas thanks to office, industrial, and data center deals.

(As a side note, I’d say that’s proof that companies haven’t stopped making important CRE decisions despite elevated interest rates.)

Revenue from Cushman’s Services department, meanwhile, rose a healthy 8%. That was from recurring facilities management contracts and increased project management activity.

Once again though, it’s data center business is where it really shined. Related revenue has soared 83% year to date as the firm participates in site selection, leasing, construction oversight, and facility operations.

All told, data centers made up around 25% of the firm’s integrated facilities management pipeline.

I’m not so impressed with Cushman’s capital markets business for obvious reasons since Q2 revenue fell 1%. Then again, management has been on a hiring spree in this area, adding about 100 professionals since early 2025.

So a capital markets revenue turnaround could be right around the corner.

Management raised its full-year adjusted EPS growth guidance regardless from 15%–20% to 18%–23%. So the way I see it, the biggest risk here is actually financial leverage.

Since net debt sat at around $2.35 billion last quarter, Cushman & Wakefield is in greater danger if the industry falters. As such, I’m going to take it out of our potential Buy pool and put it on our watchlist instead.

I'll come right out and say that I'm approaching Newmark Group with a healthy dose of caution despite several compelling attributes.

The company does have an impressive global presence across leasing, advisory services, investment sales, and mortgage financing. And it generates significant fee revenue without directly owning the buildings it works with.

That business model is producing results.

Leasing fees rose 17.2% year over year in the company's most recent second quarter, contributing to record quarterly revenue of $888.42 million. Meanwhile, adjusted EBITDA increased more than 20% during the first half, while year-to-date GAAP (generally accepted accounting principles) net income surged approximately 200%.

Management is currently shooting for adjusted EPS to grow 15%–22% for the year. But that could climb higher still if there’s any uptick in CRE investment sales and financing activity.

Plus, this all comes with a modest dividend and a 2%+ forward yield.

However, while Newmark has a BBB- rating from Fitch, S&P has it at BB+, which puts it below the investment-grade threshold. The issues at hand include its higher leverage levels, the seasonality of its earnings…

And the fact that longtime CEO Barry Gosin is likely leaving at year’s end.

With all that in mind, despite the attractive upside we’re seeing, I’m looking for greater clarity before I can make a move on Newmark.