Colliers posted a 22% jump in revenue from increased deal activity for the fourth quarter, but executives are warning that uncertainty surrounding the economic effects of trade tariffs and other global issues could affect the commercial property brokerage’s results this coming year.
The Toronto-based firm said revenue climbed to $1.5 billion for the last three months of last year from the same time in 2023, fueled by jumps in its leasing, engineering and capital markets business. Its quarterly net income rose to $75.1 million from $67.4 million.
Colliers, the first major commercial property brokerage to report quarterly earnings, expects "another solid year of growth” in 2025, albeit with slower-than-expected recovery in capital markets amid uncertainty about the potential effects of trade wars and other macroeconomic issues, CEO Jay Hennick told investors in an earnings call on Thursday. President Donald Trump imposed a 10% tariff on all imports from China this month while suspending plans for a month to institute 25% tariffs on Canada and Mexico.
“Our capital markets business is showing cyclical recovery as interest rates and asset valuations stabilize, albeit slower than we expected,” Hennick said. “While performance hasn’t yet reached the 2021 peak, our significantly larger scale now positions us to deliver even stronger results in the future as the market recovers.”
The outlook for the company, the fourth-largest commercial property brokerage, reflects “foreign exchange rates which are closely tied to international trade uncertainty and are a headwind to our U.S. dollar-reported results,” CFO Christian Mayer added.
“Trade issues that are being raised have resulted in uncertainty among occupiers and investors, particularly industrial occupiers and investors, that relate trading goods across [national] borders,” Mayer said. “We’re also seeing the trade impact on exchange rates, and currency exchange rates are going to impact our growth by 2% to 3% in 2025, with half of our real estate services and engineering revenue generated outside the U.S.”
Deal activity gains
The company expects brokerage and other real estate services revenue to grow at mid-single-digit percentage rates this year, fueled by a 30% increase in engineering revenue. In total, Colliers expects percentage revenue growth in the high single digits to low teens in 2025, Mayer said.
However, the company’s net income is expected to be “flat or modestly down” this year compared to 2024 as Colliers builds out its investment management division. Executives anticipate a boost in investment management activity in the coming year and into 2026 as more investors re-enter the market, Mayer said.
“Deal activity appears to be tracking reasonably well, however these macro things in the economy are creating uncertainty, so we’re trying to take a cautious approach on the full year," Mayer said. "We don’t know how things are going to unwind, but we know we are well positioned in our capital markets business."
Real estate services had 13% revenue growth in the fourth quarter, led by a 25% increase in capital markets driven largely by gains in Europe and the Americas, including sharp increases in office and industrial deal activity. Leasing revenues were up 14%, with global increases in office, industrial and retail.
“Capital markets did nicely in the fourth quarter, but I think we were hoping that it would be doing a little better than it did,” Hennick said. "Clients want to transact. Some are ready, but there’s still a gap between buyers and sellers."
CBRE, the world's largest brokerage, and Newmark are scheduled to report their results for the fourth quarter next week, with Cushman & Wakefield, JLL and Marcus & Millichap slated to follow later this month.