Big Brokerages Are Back In Buying Mode

The commercial real estate market is at an inflection point, with debt getting cheaper and dealmaking picking back up, allowing major brokerages to put money toward growth rather than survival.

For several companies, that means mergers and acquisitions, with billions of dollars flowing into at least six deals since September in the brokerage space alone. These deals offer companies a chance to add new service-focused verticals while bolstering existing business lines at prices they may not see again.

“You always reach that inflection point in the market. You go down, down, down, and somewhere, there’s the bottom. I think a lot of people feel that we've hit bottom,” said Collete English Dixon, who left a 20-year career at PGIM in 2016 to lead the Marshall Bennett Institute of Real Estate at Roosevelt University in Chicago.

Commercial real estate firms were hammered during the pandemic as demand for their services dried up. But they have bounced back with force, with several firms reporting their best earnings since interest rate hikes began in 2022.

CBRE, one of the recent buyers, posted net income of $363M in the third quarter, a 61% increase over the previous year. Newmark, which also completed an acquisition in the last few weeks, more than doubled its net income in Q3 to $46M.

The return of demand across the sector is boosting the valuations of public brokerages, with CBRE and JLL both up more than 20% this year, while the cost of debt is ticking down after the Federal Reserve started easing monetary policy in September.

The combination, coupled with a reset of asset values, has created an environment ripe for M&A. 

The largest was Compass' agreement in September to pay $1.6B to buy Anywhere Real Estate, the parent company of Coldwell Banker, Corcoran and Sotheby’s International Realty.  

The merger will create a $10B brokerage behemoth with more than 330,000 real estate professionals and more than 1 million mostly residential transactions per year. Morgan Stanley provided Compass with $750M in debt for the deal, which is set to close in the back half of 2026.

Not far behind on the commercial side is CBRE’s $1.2B acquisition of Pearce Services, a major engineering and maintenance firm in the data center and infrastructure sectors, announced earlier this month. 

CBRE’s data center business pulled in nearly $700M in Q3 revenue, up 40% from last year. And the addition of Pearce will allow the firm to scale quickly in the sector, CEO Bob Sulentic said. 

“This acquisition complements our large and growing presence in digital and power infrastructure,” he said in a statement. “It also opens sizable new growth avenues for CBRE in markets where the need for Pearce’s services is growing rapidly.”

The string of recent deals could be mistaken for a boom, but English Dixon said it was more like a return to the mean after deal volume dried up during the pandemic. Commercial real estate M&A activity ticked up in 2024 from the prior year but remained near a seven-year low, Deloitte reported. 

A Bisnow analysis tracked more than two dozen acquisitions since the start of September from brokerages, banks, private funds and other real estate operators.

The 12 deals where the purchase price was disclosed total at least $32B, and BlackRock’s reported negotiations to buy Aligned Data Centers for $40B would more than double that. 

Cresa made the biggest acquisition in its three-decade history last month when it bought its main rival in the tenant-advisory-only space, Dallas-based Fischer, for an undisclosed sum. 

The acquisition bolstered Cresa’s portfolio business, CEO Tod Lickerman told Bisnow last month, diversifying its client base to be split roughly evenly between individual transactions and the portfolio deals that were Fischer’s specialty. 

More acquisitions are coming, including two that are set to close before year-end, although none are at the same scale as Fischer, Cresa co-founder and Vice Chairman Tom Birnbach told Bisnow this week. 

Cresa’s privately owned status can be a selling point for some firms that don’t want to be beholden to stock market swings, but most of the publicly traded brokerages are also closing deals and exploring the market for more acquisitions.

Newmark paid an undisclosed sum in October for RealFoundations, a Dallas-based professional services firm with more than 500 employees and 600 clients.

RealFoundations executives stayed on in the deal and will continue to lead the newly named Newmark RF, the revenue of which will be rolled into Newmark’s larger balance sheet.  

It’s a common setup for services M&A today. Many sellers aren’t looking to cash out and move on so much as they want to get paid while continuing to scale their business. The smaller firms are frequently looking to tap into the global brokerage’s reach to expand their own client base. 

“I wouldn't say we were the top bidder for some of the M&A that we've done, but I think that what we bring to the table is an opportunity to come in and really make a mark within a midsized, entrepreneurial, privately held firm,” Birnbach said.

Newmark’s acquisition filled in gaps where the firm didn’t already have a presence, helping to broaden its service offerings in a bid to attract large investment firms that are looking for a one-stop shop, CEO Barry Gosin said on the firm’s third-quarter earnings call. 

RealFoundations, which focuses on consulting and technology integration and implementation, also has solutions that Newmark plans to leverage to unlock operational efficiencies in its occupier services segment.  

“All of those pieces fit neatly together and bridge the gaps between a holistic solution — becoming the go-to firm when a fund is thinking about how they want to operate,” Gosin said.

Colliers has also been filling in gaps with a burst of acquisitions focused on service providers, especially outside the U.S. Earlier this month, it purchased Greenhill Engineers, an Australian engineering and consultancy firm with 65 staff.

Colliers has increased its engineering revenue by 54% over the last year, pulling in $488M in the third quarter, or roughly 33% of all revenue.

The engineering growth has been fueled by seven acquisitions that Colliers has made in the sector this year, CEO Jay Hennick said on the firm’s third-quarter earnings call. Colliers also moved to beef up its presence in U.S. investment management in September with the acquisition of Greystar’s multifamily investment sales firm. 

Colliers is targeting M&A in infrastructure-related sectors like transportation, energy and communications, where it sees governments around the world helping fuel growth through investment. 

“When we look for acquisitions, we target businesses operating in these sectors, where there are long-term tailwinds for growth in this highly fragmented industry,” Hennick said. 

M&A activity is expected to continue to roll into next year, regardless of macroeconomic conditions. The commercial real estate services sector remains profoundly fragmented and has long been seen as ripe for consolidation, English Dixon said. 

Explosive growth from data centers, the reframing of office space’s purpose, billions of dollars in dry powder that has been sidelined, and a host of other tailwinds are pushing M&A activity ahead. 

The potential for a recession — UBS put the risk of a U.S. downturn at 93% in September, although most other analysts put the odds lower — hasn’t slowed M&A momentum. And if one does hit markets, takeovers are likely to continue. 

“In down markets, you know, there’s opportunity,” Birnbach said.