The world’s largest real estate brokerage has found its next growth engine in the cloud.

Data centers will account for roughly 10% of CBRE’s earnings this year and be an even larger part of its business in the years ahead, CEO Bob Sulentic said on the firm’s third-quarter earnings call Thursday morning.

The rapid expansion of the asset class comes as the office and industrial sectors also bounce back from a lull, which helped CBRE beat forecasts from analysts and its own internal expectations.

The nearly $700M in data center-related revenue CBRE pulled in during the third quarter was up 40% from the prior year, Sulentic said, and the firm has multiple deals lined up for data center parcels in the land bank that will help drive revenue higher in the near term.

“In addition to enjoying the benefit of the current pop in activity, we are building businesses that we believe will be sustainable as the cycle with data centers unfold,” Sulentic said. “Inevitably, it's going to be a big build cycle over the next five years, maybe longer. And then beyond that, it's going to be a big operating cycle.”

CBRE reported overall revenue at $10.3B in the third quarter, up 14% year-over-year, and a 34% increase in its core earnings per share.

U.S. and global leasing were both up 18% compared to last year, with domestic activity driven not only by data centers but also by industrial and office deals. U.S. sales increased by 32%, with data centers joined by office buildings as the most active asset classes after a year of frozen dealmaking.

“What we were surprised by in the third quarter was the resurgence, on a relative basis, of the gateway markets. They were really strong — New York in particular, San Francisco in particular,” Sulentic said.

Revenue in CBRE’s building operations and experiences segment, which includes property management, grew 11% year-over-year, driven by new contracts with hyperscalers.

CBRE’s stock jumped in premarket trading Thursday after the firm released its results, but it gave back some of those gains through the day. The stock is flat over the last 30 days but up more than 30% in the last six months.

The earnings beat and positive outlook on the earnings call were well received by analysts Thursday.

“The momentum in 3Q is better than we expected, and there was no indication on the call that something all-of-a-sudden changed in recent weeks,” JPMorgan Chase analysts wrote in a note.

CBRE is taking a less holistic approach to data center land sales than some of its competitors in the sector, which all see the artificial intelligence boom as a major growth driver.

Unlike development giants like Prologis, its strategy doesn’t include power procurement, though Sulentic acknowledged that power was the primary constraint for any operator in the segment. It focuses on securing entitlements and development rights along with executing some land improvements before bringing sites to market.

After spending more than $663M buying back stock in the first half of the year, CBRE didn’t repurchase any of its shares in the third quarter.

Chief Financial Officer Emma Giamartino told analysts on the earnings call that CBRE's leadership still saw the stock as underpriced and that the pause in buybacks was to free cash flow for other potential uses, hinting at possible acquisitions.

“I can't comment on particulars of what we're targeting, but we continue to focus on the areas of our business that are resilient, that can benefit from secular tailwinds,” she said.

CBRE's overall free cash flow was $779M in the third quarter, and it continued to push down its debt leverage. Its total liquidity was $5.2B, up $500M from the prior quarter.

The strong balance sheet and trends across its business lines led CBRE to modestly boost its year-end guidance for the second time this year.

Sulentic also noted a shift in office demand in the third quarter, with the concentration of activity at the top of the market starting to trickle down as well-appointed space becomes harder to find.

High-quality buildings in secondary and tertiary markets are drawing tenants that are willing to trade quality for location, while owners are pouring money into improvements for properties with availability in high-demand markets like Manhattan, Sulentic said.

Developers are also once again considering putting shovels in the ground for new offices. Sulentic said it is in talks to sell a Dallas parcel from its land bank for a deal that could add 500K SF of new office inventory to the market.

“We now have a couple of large users, high-credit users, that are very interested in that site,” he said.