CBRE Q3 Deep Dive: Data Center Momentum and Global Leasing Drive Growth

Commercial real estate firm CBRE (NYSE:CBRE) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 13.5% year on year to $10.26 billion. Its non-GAAP profit of $1.61 per share was 10.2% above analysts’ consensus estimates.

Is now the time to buy CBRE? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

CBRE delivered a robust performance in Q3, surpassing Wall Street’s revenue and profit expectations. Management credited the company’s broad exposure across asset classes, with CEO Robert Sulentic highlighting the company’s “nearly $700 million of revenue from data centers in the third quarter, 40% more than in 2024’s third quarter.” Resilient performance in global leasing, especially in the U.S. and key markets like Japan and India, also contributed to the quarter’s results. The operating margin remained steady, as double-digit gains in both resilient and transactional businesses offset incentive compensation increases tied to overachievement.

Looking ahead, management’s guidance is shaped by strong data center and leasing pipelines, ongoing integration of recent acquisitions, and anticipated monetization of development assets. CFO Emma Giamartino stated the company’s raised EPS outlook depends on “transaction activity continuing as we’re seeing right now and at these development sites that we have a high confidence we’ll monetize this year.” Management expects continued secular demand for data centers, further market share gains, and incremental cost synergies from integrating Turner & Townsend to support margin expansion into next year.

Key Insights from Management’s Remarks

CBRE’s management attributed third quarter outperformance to accelerating data center demand, broad-based leasing growth, and margin discipline, with key segments and regions contributing to results.

• Data center revenue surge: Management highlighted a 40% year-over-year increase in data center revenue, with this segment now representing about 10% of total EBITDA. Growth was fueled both by transactional activity and recurring management contracts, and management expects this trend to persist due to sustained digital infrastructure demand.
• Global leasing strength: U.S. leasing reached an all-time Q3 high, up 18%, with particular strength in industrial and a resurgence in gateway office markets like New York and San Francisco. Internationally, Japan and India delivered over 30% combined revenue growth, driven by continued urbanization and demand for modern workspaces.
• Integration of Turner & Townsend: The Project Management segment showed double-digit growth, with the Turner & Townsend integration enabling CBRE to secure larger, more complex projects and win new cost consultancy mandates. Management expects further operational synergies as financial and HR platforms are unified.
• Advisory and sales pipeline: Advisory segment revenue rose sharply, led by increased leasing, sales, and mortgage origination, with management noting a closing gap between buyer and seller expectations. This has led to a “strong, steady recovery” in transaction volumes, supported by pent-up demand on both sides of the market.
• Operating leverage and cost control: Despite higher incentive compensation due to outperformance, operating leverage was achieved across segments through cost efficiencies and technology investments. Management cited further opportunities for synergy capture, especially from scale in facilities and project management.

Drivers of Future Performance

CBRE’s outlook is underpinned by sustained data center demand, strong transaction pipelines, and operational improvements driving incremental margin expansion next year.

• Data center cycle expansion: Management expects data centers to make up a larger share of profits in coming years, driven by a build cycle followed by an extended operating phase. The company is investing in land acquisition, project management, and digital infrastructure services to capture value across this asset’s lifecycle.
• Integrated services and cross-sell: Recent acquisitions, such as Turner & Townsend and Industrious, are enabling CBRE to offer bundled solutions to large occupiers, which management believes will deepen client relationships and grow wallet share. This integrated approach is expected to drive incremental revenue and margin expansion.
• Margin improvement from synergies: CFO Emma Giamartino indicated that cost synergies from ongoing integration, especially in the Building Operations & Experience and Project Management segments, should continue to support margin expansion into next year, even as comparison periods become more challenging. Potential risks include delayed asset monetization and macroeconomic shifts affecting transaction volumes.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) the pace and scale of data center project monetizations and recurring management wins, (2) progress on integration and synergy realization from Turner & Townsend and Industrious, and (3) sustained growth in leasing and advisory pipelines, especially in key international markets. Execution in these areas will be key to maintaining momentum as comparables become more demanding.

CBRE currently trades at $164.20, in line with $163.85 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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