CRE Brokers See Flat Q4 After Rate Spike

For commercial brokers, December is the Super Bowl, and the 10-year Treasury just fumbled the kickoff. JPMorgan analysts now see fourth-quarter capital markets revenue at CBRE, JLL, Cushman & Wakefield and Colliers flat with a year ago, down from a forecast of 10% growth, Bisnow reported ^[1].

Bisnow said the 10-year yield broke above 5.3% at the start of October, then slid back near 4.8%, a swing that froze many year-end deals ^[1].

How we got here

• The fourth quarter has delivered about 30% of brokers' full-year capital markets revenue, and December roughly 15% of annual activity, per JPMorgan ^[1].
• Through Sept. 30, JLL's capital markets revenue was up 21%, Cushman's 10% and Newmark's 14.5% ^[1].
• Cushman's third-quarter capital markets revenue grew 18% to $241.3 million, led by 24% growth in the Americas ^[2].
• Lightbox data showed daily property listings up 24% in September from August, but appraisals fell ^[1].

But the pain may land later. JPMorgan models 2027 capital markets revenue down 20% in the first quarter and 10% in the second before recovering ^[1]. CBRE CEO Bob Sulentic said on his October call that some deals under contract are being retraded as cap rates rise ^[1].

What it means for you

If you are selling a property, a stalled market means fewer bidders and more retrades, so build extra time into closing. KBW's Jade Rahmani told Bisnow apartments are most exposed to rate-driven value swings because they trade at the lowest cap rates ^[1]. By our math, a $1 million apartment building yielding 5% earns $50,000 a year; if buyers demand 5.5%, the same income supports a price of about $909,000.

Zoom out

Leasing is holding up, which separates this slowdown from past ones: Cushman's leasing revenue rose 15% last quarter ^[2]. Over 80% of traders expect a 25 basis point Fed hike in December, according to CME FedWatch data cited by Bisnow ^[1].