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5 Of The 6 Largest CRE Brokerages Posted Losses In Q1

If there were a one-word refrain that rang through the first-quarter earnings calls of the country’s top commercial real estate brokerages, it would be “challenging.”

With steep declines in transaction volumes and leasing and a ballooning sense of economic uncertainty stacked against them, five of six top real estate brokerage firms posted net losses in the first three months of this year.

Many firms voiced expectations that the worst is yet to come, anticipating these troubling conditions and their effects on the industry would persist for longer than previously predicted. 


In his company's earnings call, Colliers Chief Financial Officer Christian Mayer said since providing the firm's initial outlook in February, “a significant banking crisis has occurred, availability of credit has tightened further and the level of uncertainty around asset valuations has increased, causing us to revise our outlook for the year."

That revised outlook anticipates lower volumes in transactional business sticking around for the rest of the year and capital markets volumes falling as much as 40% in the second quarter, Mayer said.

Colliers, Cushman & Wakefield, JLL, Newmark and Marcus & Millichap all posted net losses in the first quarter. 

Colliers reported a net loss attributable to the company of $20.2M in the first quarter. C&W posted a net loss of $76.4M in the same period. JLL reported a net loss attributable to common shareholders of $9.2M in Q1. Marcus & Millichap’s net loss in the first quarter totaled $5.8M, and Newmark reported a net loss available to common stockholders of $10.35M. 

CBRE reported $116.9M in net income attributable to the company in the first quarter, a decrease of more than 68% over $396.3M in Q1 2022.

The results were more or less in line with the expectations that Keefe, Bruyette & Woods Managing Director of Commercial Real Estate Finance Jade Rahmani anticipated. In an interview with Bisnow, Rahmani cited a report he published in March projecting CRE transaction volumes would drop 30%-40% this year. 

Since that report was published, the market has had a few more obstacles thrown in its path, in the form of bank failures and the cumulative impacts of interest rate hikes.

“The outlook has gotten more uncertain,” Rahmani said. 

Some executives said the first three months of 2022 were an exceedingly strong quarter as many rushed to complete deals in anticipation of interest rate increases. But many also noted that certain areas of business, namely capital markets and leasing, have dropped off significantly and, in many cases, are expected to fall even further. 

Executives cited Real Capital Analytics data that showed transaction volumes across all property types were down 56% in Q1 2023, totaling $85B. 

CBRE said its capital markets, property sales and loan origination combined declined 43%, “a slightly greater decline” than it had previously expected. Looking forward, CBRE expects property sales to fall by almost 20%, a more than 25% decline from 2021’s peaks. The company also expects to see leasing activity drop by the “high single-digits.”  

CBRE’s initial outlook for 2023 anticipated a rebound later this year, but “we now expect a delayed recovery due to more constrained debt liquidity and heightened market uncertainties,” CBRE CFO Emma Giamartino said. 

At Marcus & Millichap, brokerage transactions declined by 40% in the first quarter. The results were impacted by a major drop-off in larger sales, executives said.  

Cushman & Wakefield CFO Neil Johnston told investors its Q1 revenue reflected a weakness in the firm’s capital markets business, which was down 50%, and that was a continuation of what it had seen in the final quarter of 2022. Cushman's leasing revenue was also down 19% from the previous year, but that was a robust period in which leasing revenue was up more than 50% over 2021, Johnston said.

Leasing and other commissions revenue at Newmark was down just 2.8% in this quarter compared to the previous one, bringing in $193M. But investment sales dropped 52.7%, going from $152.1M in the beginning of 2022 to $72M in the beginning of this year.  

JLL’s revenue from capital markets was $357.1M in the first quarter, down 41% from $600.6M in Q1 2022. Fee revenue from the markets advisory arm of its business, which includes leasing, declined 15%.

The declines “reflected uncertainty with interest rates and the macroeconomic outlook as transaction volumes fell and the deal-cycle time remained elongated,” a supplemental report from the company noted.