As they celebrate another quarter of surging deals, executives with the largest commercial real estate brokerages are sounding notes of caution amid what they say is growing uncertainty over the potential effects of the Trump administration's economic policies.
While optimistic that deal activity will further strengthen this year, executives for CBRE, JLL, Cushman & Wakefield, Colliers International, Newmark and Marcus & Millichap said during their most recent earnings calls that macroeconomic factors linked to the policies of the new administration — including the trajectory of interest rates and inflation, and the potential effect of tariffs and government cuts — are concerning clients and clouding earnings forecasts.
“We are currently in a still very volatile environment,” JLL CEO Christian Ulbrich told investors during the company’s earnings call. “On the one hand, we see some very strong dynamics for the real estate industry and we are probably at the beginning of a longer-term upcycle. But on the other hand, the geopolitical environment, the trade environment is bringing a bit of uncertainty.”
Tariffs and the prospect of trade wars loom over the economy as the administration’s “America First” policies cause some concern and bewilderment for Canada and Mexico after decades of trade cooperation, Anthony Graziano, CEO of Integra Realty Resources, a Denver-based real estate research and advisory firm, said in an interview.
However, “we would do well to remember that [President] Donald Trump loves to negotiate, and the threat of tariffs is likely more powerful than their implementation,” Graziano said. “That said, the prospect of international trade wars is unsettling, and the impact on real estate will be lasting as the fundamental business of our tenants will be challenged by disrupted supply chains and a less predictable economy.”
He added that “grocery prices, gas, housing — all of those costs are still high, which is a drag on the psychology of the economy. And that holds back consumer spending, which moves the needle of real estate demand.”
The administration didn't respond to emails sent Friday and Sunday seeking a response.
Tempered expectations
In the final months of last year, requirements by more companies that employees return to fulltime office work — along with interest rate cuts and lower borrowing costs — helped drive a surge in office leasing and other real estate activity. That prompted brokerage CEOs to predict a stronger earnings recovery in the second half of 2025, especially in property sales and financing revenue.
Now, that recovery path is cloudier as concerns about global trade wars have caused uncertainty and concern among real estate investors and tenants, especially those focused on logistics and other industrial companies that move goods across borders, Colliers Chief Financial Officer Christian Mayer said during an earnings call.
"We're also seeing the trade impact on exchange rates," Mayer said. "As we sit here today, at prevailing exchange rates, our growth is going to be impacted by 2% to 3% in 2025, with half of our revenues in real estate services and engineering being generated outside the U.S."
While some equity analysts who follow the publicly traded brokerage said there's no evidence of a major deal downturn, the economic noise has caused JLL, Colliers and others to dial back their 2025 earnings guidance.
“There remains a good deal of macro uncertainty, particularly around interest rates that could impact transactional businesses quickly,” JPMorgan analyst Anthony Paolone said in an investor note. “We think JLL and its peers have little incentive to come out with robust guidance at this point.”
Investors in the broader financial market seem to be comfortable so far that tariffs will be delayed, muting their economic effects, Citi U.S. Equity Strategist Scott Chronert said in a recent research note.
However, Citi analysts "see more near-intermediate term downside risk to Trump policy effects than upside opportunity," Chronert said.
Concern and optimism
Marcus & Millichap CEO Hessam Nadji said the company's brokers report that concerns over tariffs and persistent inflation has caused sellers to move back to the sidelines.
"Many clients who were preparing to bring inventory to market in the first quarter have returned to a wait-and-see stance," Nadji said. "Investor sentiment has definitely shifted. The election outcome helped investor sentiment. But in the last 30, 45 days, we've seen a little bit more of a pullback — just a wait and see how the new administration's policies start to roll out, and what really happens on the inflation front."
Efforts by billionaire Elon Musk's Department of Government Efficiency, or DOGE, to reduce government spending, including the closing of federal offices, could bring unexpected benefits for CBRE and other brokerages that have operations in the nation's capital and other cities with a large federal presence.
“We did do a lot of leasing in Washington, D.C. and so if there’s churn in that market because of downsizing or exiting spaces to go into smaller spaces, we think it probably will help our business there,” CBRE's Bob Sulentic said during the company’s earnings call.
Newmark CEO Barry Gosin downplayed concerns about the effect of the administration's trade policies on the industrial market.
While "there's always fear in some camps," he said, the reshoring of manufacturing will create jobs that will have a positive effect on U.S. industrial real estate.
"There was a little bit of an oversupply last year of industrial [property] and it was quieter last year, but I think that's going to accelerate" as more companies build manufacturing for computer chips and other advanced technology, Gosin said.