CBRE under pressure: Real estate industry struggles with uncertainty and change

CBRE under pressure: Real estate industry struggles with uncertainty and change

The real estate industry is facing significant challenges, particularly CBRE, the world's largest real estate advisory service provider. The uncertainties in the commercial real estate sector are causing institutional investors to reallocate their investments. Nordea Investment Management reduced its position by 5.0% in the second quarter, which corresponds to a sale of 16,896 shares. Assenagon Asset Management also reduced its exposure by 360,540 shares in September 2025. Conversely, the decision was positive for Brighton Jones LLC, which increased its position by 322.9%, while Wealth Enhancement Advisory Services even increased its position by an impressive 1,079.3%. These opposing strategies reflect the current uncertainty that is shaping the commercial real estate sector.

A particularly critical point is the office market in Dublin, which has a vacancy rate of over 10%, which has doubled in the last six years. Rent peaks in Dublin have fallen by around 11% since 2022. Despite these negative trends, recent data shows that the third quarter of 2025 saw the strongest demand for office space in over a year, and early signs point to a possible recovery in rents. Modern premium properties in particular could benefit from this recovery, while older properties continue to face challenges.

Market developments and quarterly figures

CBRE's upcoming quarterly results, which will be published on October 23, 2025, are highly anticipated. Analysts forecast earnings of $1.49 per share and revenue of $10.1 billion. In the previous quarter, CBRE was able to exceed expectations at $1.19 per share. Eight out of ten analysts recommend buying the stock despite the uncertainties, while two recommended holding. The average price target is $170.78, representing a potential upside of almost 9% from the current price. Morgan Stanley even increased its price target to $180. The upcoming quarterly figures could provide crucial clarity not only for CBRE, but also for the entire commercial real estate market.

In addition, the office property investment market is off to a dynamic start to the year. The office transaction volume in so-called B locations and regional centers rose to 415 million euros, which significantly exceeded the figures from the previous year and the previous quarter. Core and core-plus transactions accounted for 67% of the total volume. In contrast to the top 7 markets, office investment volume fell by 6% compared to the first quarter of 2024. It is noteworthy that transactions outside these top 7 markets are 11% above the same quarter of the previous year and the year-end quarter of 2024 was even exceeded by 246%. Dortmund, Hanover and Bonn are among the strongest markets outside the top 7.

Risks and opportunities in the commercial real estate market

Interest rate trends have a significant impact on the real estate investment market. The European Central Bank could cut key interest rates. Financing interest rates fell by almost 30 basis points, reducing the yield on ten-year federal bonds to below 2.6%. In the first three months of 2025, first-class office properties in top locations in B locations had returns of 5.50%, while the return for office properties outside central areas was 6.30%. These developments indicate a possible continuation of the recovery of the office investment market in B locations and regional centers.

For institutional investors, the commercial real estate market remains attractive due to its diverse uses, ranging from offices to retail stores to manufacturing facilities. Not only do commercial properties offer potentially high returns, but they also offer tax advantages compared to residential leases. Nevertheless, risks remain due to economic uncertainties and the experiences from the Corona crisis.

The coming months are crucial for the real estate industry in order to set the course for a recovery and meet the challenges of the market. Analysts and investors are looking forward to developments that could have a lasting impact on both the market and investors' strategies.

For detailed information on the current trends and developments in the commercial real estate sector, you can download the relevant reports from Stock World, CBRE and Statista see.