Economic uncertainty related to the war in Iran, concerns over rising interest rates and the impacts of AI have slowed some commercial real estate service companies’ business, but executives remain confident as their customers continue to seek out high-quality facilities and look to facilities management services to add value to their operations, top executives said during their companies’ third-quarter earnings calls.
While the uncertainty mostly affected the firms’ capital markets segments, it also led to a shaking out of some leasing and facilities management deals, according to executives at CBRE, JLL and Cushman & Wakefield.
“That’s happened from time to time over the years,” CBRE CEO Bob Sulentic said. “The market gets frothy, it gets more and more competitive and you … end up with some broker hires or outsourcing or enterprise accounts that don’t have the characteristics you would want.”
The volatility “is what’s driving a pause or a hold or even delaying deals to 2027,” CBRE CFO Emma Giamartino said. “We expect that stability to come in the back half of next year…. Of course, if that doesn’t come or things change, the results will be different.”
Going into the final quarter of the year, the strong majority of transactions are still progressing and closing, but there are some deals in which timelines are stretching out, JLL CEO Christian Ulbrich said.
The executives affirmed that, despite the concerns people have expressed over data centers, the sector remains economic engines for their companies. “When [people understand] what’s available to them and how it can really allow them to build the schools, pay the teachers and the cops and the firefighters, and build out world-class facilities ... I think you’ll find that these things will get built,” said Emcor CEO Tony Guzzi. Emcor provides electrical and mechanical contracting as well as facilities management services.
Facilities Dive’s coverage of the third-quarter earnings reports of CBRE, JLL, Cushman & Wakefield, ISS and Emcor is compiled here:
