One of the largest owners of commercial real estate is dropping Cushman & Wakefield as the listing agent at many of its office and logistics properties, a blow for the brokerage as it contends with mounting losses amid an industrywide slowdown.

Brookfield fired the Chicago-based firm as its broker after Cushman & Wakefield retreated from a plan to move some of its New York City operations to Brookfield's $400M redevelopment of 660 Fifth Ave., Bloomberg reported.

The breakup could deal a blow to the brokerage’s bottom line. Cushman & Wakefield this week reported a net loss of $33.9M in the third quarter, bringing the firm’s total losses through the first three quarters to $105.2M. Its revenue for the first three months of the year was 7% lower than the year before.

Brookfield has extensive office holdings in some of the country’s highest-profile markets, including 24M SF in New York, 11M SF in Washington, D.C., 10M SF in Houston and 9M SF in Los Angeles, according to its 2022 Sustainability Report. Its logistics portfolio covers 350 facilities across 20 states.

Among the office buildings on which Cushman & Wakefield is listed as Brookfield's broker are 660 Fifth Ave. and Manhattan West in New York, 799 Ninth St. NW and 2001 M Street in Washington, and 75 East Santa Clara St. in San Jose, California.

A Cushman & Wakefield spokesperson said in a statement to Bisnow that the brokerage was stunned by Brookfield’s decision.

“We’re proud of the work and long-standing value our brokerage advisory professionals helped to build into Brookfield’s portfolio,” the spokesperson said. “While completely surprised by this reaction, we consider disciplined management in the best interest of our firm, employees and shareholders.”

A Brookfield spokesperson declined Bisnow’s request for comment.

Cushman & Wakefield CEO Michelle MacKay said during its earnings call Tuesday that the firm was on track to cut $130M from its budget this year to improve its balance sheet and reduce its cost structure.

Cushman & Wakefield has been moving to cut costs throughout the year as it adjusts to a marked slowdown in all types of commercial real estate transactions and makes efforts to pay down debt. MacKay said on this week’s earnings call that it planned to reduce its leverage by about $200M in 2025.

Neil Johnston, the firm’s chief financial officer, said 20% of the firm’s cost savings this year came from “temporary costs” like travel and marketing, cuts that Johnston said could be carried into 2024 as the firm is forecasting “a marked recession.”

“We are always focused on efficiencies,” Johnston said. “There are always additional levers we can pull.”