CBRE revenue rose 15.5% to $11.2B on 23.5% leasing and 20% property-sales growth, and core EPS rose 30% to $1.56; a $168M UK fire-safety provision cut GAAP EPS 4% to $0.69.
Revenue
$11.2B
+15.5% YoY
Net income
$204M
-5.1% YoY
Diluted EPS
$0.69
-4.2% YoY
Operating margin
3.3%
A one-off UK charge hid a strong quarter
CBRE, the world's largest commercial real estate services firm, grew revenue 15.5% to $11.23 billion in the second quarter of 2026 (the three months to June 30). All four of its business segments raised their segment operating profit by more than 25%. Reported (GAAP) profit still fell. Net income attributable to CBRE dropped 5.1% to $204 million and diluted earnings per share fell from $0.72 to $0.69.
The gap comes from one item. CBRE took a $168 million provision (money set aside for an expected future cost) for fire-safety remediation at UK apartment buildings put up by Telford Homes, a British development subsidiary that is now being wound down. The charge is booked in the Real Estate Investments segment. In the earnings release (8-K Exhibit 99.1), management says that without it, second-quarter GAAP net income would have risen 53% and GAAP EPS 57%. The provision is non-cash for now. Per Note 17 of the 10-Q, it raised the balance-sheet liability for this work to about $456 million, up from $321 million at the end of 2025. The filing says the higher estimate reflects "fire engineer assessments, updated surveys, design evolution, regulatory feedback, the addition of internal fire containment work and incremental direct program costs." This estimate has now risen materially, and the filing says it will be updated again as new information comes in.
Key figures
About 41% of CBRE's revenue is pass-through costs: payments to subcontractors (cleaners, engineers, builders) that clients reimburse dollar for dollar. They make the top line bigger but carry almost no profit. For that reason, the table also shows revenue with those costs removed. We calculated that line from the filing's figures. CBRE does not label it "net revenue" in the 10-Q.
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$11,226M
$9,717M
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How to read the two sets of profit numbers. "Core" EBITDA and core EPS are CBRE's own adjusted measures, not standard accounting figures. EBITDA means earnings before interest, taxes, depreciation and amortization. CBRE's "core" versions also strip out acquisition integration costs, restructuring and transformation spending, amortization of acquired intangible assets, and this quarter's Telford provision. That makes them useful for judging the underlying trend. It also means they leave out costs that are real. In Q2 the gap between the two is unusually wide: core adjusted net income was $459 million against $204 million under GAAP. Of the $255 million difference, $168 million is Telford. The rest is mainly acquisition amortization ($58M), integration costs ($45M) and business-transformation costs ($38M), partly offset by a $76M tax effect of the adjustments.
Operating margin is the share of revenue left after running the business, before interest and tax. It fell from 3.8% to 3.3% on total revenue. Measured against revenue excluding pass-through costs, it fell from 6.6% to 5.5%. The Telford charge explains the decline. It is booked in operating, administrative and other expenses, which rose 20.5%. Adding back the $168 million alone would put Q2 operating income at $533 million (our calculation).
Transaction markets: the recovery is real and led by the U.S.
The 10-Q describes the market this way: "The strong recovery of the commercial real estate market continued in the first half of 2026." It says U.S. leasing "remained strong across all property types, led by industrial and office," and that U.S. investment sales "improved significantly" in the quarter, while growth overseas was "more modest." Management credits "broad capital availability, improved occupancy market fundamentals and narrower bid-ask spreads." The bid-ask spread is the gap between what sellers want and what buyers will pay. When it narrows, more deals close.
Advisory Services, CBRE's brokerage and deal-making arm, shows this directly:
Advisory line
Q2 2026
Q2 2025
YoY Change
Leasing
$1,229M
$995M
+23.5%
Property sales (capital markets)
$551M
$459M
+20.0%
Commercial mortgage origination
$97M
$90M
+7.8%
Valuation
$220M
$196M
+12.2%
Loan servicing
$121M
$122M
-0.8%
Segment revenue
$2,306M
$1,959M
+17.7%
Segment operating profit
$449M
$347M
+29.4%
Leasing grew in every region. Americas revenue rose 23.7% (U.S. +23.5%), EMEA 26.5% and Asia Pacific 18.9%. Office and industrial led, and the 10-Q also names data-center leasing as a driver for the half-year.
Property sales rose 20.0%, "driven primarily by growth in the U.S. across industrial, multifamily, retail and office." Year to date, property sales revenue is up 29.9%.
Mortgage origination is the weakest transactional line. According to the earnings release, strong lending by private capital sources was "partly offset by lower government agency lending." The 10-Q adds an accounting detail. Since Q1 2026, CBRE subtracts amortization on its mortgage servicing rights (the value of the right to collect loan payments for a fee) from origination revenue. That subtraction was $11 million this quarter against $4 million a year ago. The 10-Q says recent loans have "shifted to shorter loan terms in a higher rate environment," so each new loan creates less servicing value, while amortization on the older servicing book stays high.
Margin expansion. Segment operating profit rose 29.4% on 17.7% revenue growth, so the margin went from 17.7% to 19.5% of segment revenue. Overhead (operating, administrative and other) grew only 10.8%. Brokerage profit tends to rise faster than revenue in a recovery because a large share of costs is fixed.
The steadier businesses: data centers are the standout
Building Operations & Experience (BOE) manages and maintains buildings for owners and occupiers. Revenue rose 14.6% to $6,686 million and segment operating profit rose 25.5% to $335 million.
Critical infrastructure revenue rose 67.7% to $676 million. The 10-Q attributes this to "expansion of CBRE's work for data centers, as well as contribution from the recent Pearce acquisition." CBRE bought Pearce Services, a technical-services provider for digital and power infrastructure, in November 2025 for total consideration of $1,186 million. That includes a $115 million deferred payment due November 3, 2026 and an earn-out of up to $115 million. Part of the 67.7% therefore comes from the acquisition, not only from existing operations. The filing does not break out Pearce's contribution.
Facilities management is the largest single line at $5,311 million, up 11.0%. Growth came mainly from local facilities management in the Americas and from technology, media and telecom clients.
BOE's depreciation and amortization rose 77.0% to $108 million, which the 10-Q attributes to intangible assets from acquisitions such as Pearce. Segment operating profit adds this back. GAAP operating income does not, which is one reason BOE's GAAP operating income grew only 13.5% ($178M to $202M).
The earnings release says BOE's operating leverage "was aided by the reclassification of certain amortization costs." In plain terms, some of the margin improvement comes from how the costs are presented.
Project Management revenue rose 19.1% to $2,045 million and segment operating profit rose 27.8% to $147 million. The 10-Q cites "strong infrastructure activity in the United Kingdom, Europe and the Middle East" and real estate projects in North America and Asia.
Real Estate Investments revenue fell 10.2% to $193 million. Development fees dropped from $70 million to $44 million, while investment management fees rose from $145 million to $149 million. Segment operating profit still rose from $25 million to $42 million, because it excludes the Telford provision. On a GAAP basis the segment had an operating loss of $137 million. Assets under management ended June at $154.8 billion, compared with $155.2 billion at March 31. Outflows of $4.2 billion, mostly from separate accounts, exceeded inflows of $3.4 billion.
First half: GAAP flattered by property sales
For the six months to June 30:
Revenue: $21,753M vs. $18,592M (+17.0%; foreign currency added 2.6 points)
Net income attributable to CBRE: $522M vs. $378M (+38.1%)
Diluted EPS: $1.77 vs. $1.25 (+41.6%)
Core EBITDA: $1,667M vs. $1,144M (+45.7%)
Core EPS (per earnings release): $3.17 vs. $2.09 (+51.7%)
The first-half GAAP growth is flattered too, in the opposite direction from Q2. It includes a $306 million gain on disposition of real estate, against $19 million a year earlier. Almost all of it came in Q1, mostly from REI selling development assets. Most of that gain offsets the Telford charge. Neither item says much about how CBRE's services businesses are performing.
Cash, debt and buybacks
Cash flow: operating activities used $687 million in the first half, compared with $489 million a year earlier. The 10-Q attributes the outflow to working capital, "largely due to higher accounts receivable due to revenue growth and the timing of cash collections." CBRE's cash generation is usually weighted to the second half. The earnings release puts trailing-12-month free cash flow at nearly $1.7 billion.
Buybacks: in Q2, CBRE repurchased 3.10 million shares for $414 million at an average of $133.94. First-half repurchases totaled $945 million, and $988 million by July 27. $3.9 billion of authorization remains. Diluted share count fell 2.0% year on year to 293.9 million, which lifts per-share figures.
Debt: CBRE issued $750 million of 5.250% senior notes due 2036 in May and used the proceeds to repay commercial paper (short-term corporate borrowing). Commercial paper outstanding was $1.6 billion at June 30, up from $852 million at year-end. That borrowing, together with cash on hand, funded the buybacks. The earnings release puts net leverage at 1.60x trailing core EBITDA. Leverage here means net debt divided by a year's core EBITDA.
Net interest expense was roughly flat at $60 million. The effective tax rate rose to 21.6% from 20.3%.
Takeaway: Two numbers from the same quarter point in opposite directions: GAAP EPS fell 4% while core EPS rose 30%. The core figure better reflects the operating businesses. Leasing grew 23.5%, property sales 20.0% and data-center services 67.7%, and each segment's profit grew faster than its revenue. The GAAP figure carries a real warning, though. The Telford liability has grown to about $456 million and could keep growing. Critical infrastructure growth also includes an acquired business, and first-half cash flow was negative $687 million. Core EPS leaves out all three of these points.
Outlook
The 10-Q does not include earnings guidance. In the Q2 earnings release (8-K Exhibit 99.1, July 29, 2026), CBRE raised its 2026 core EPS outlook to $7.80–$7.90 from $7.60–$7.80, which it describes as 23% growth at the midpoint. Core EPS was $3.17 in the first half, so hitting the midpoint would require about $4.68 in the second half. That fits CBRE's usual pattern of earning more in the second half, especially in the fourth quarter, but it is a large step up. CBRE did not reconcile the guidance to GAAP EPS, citing "variability and low visibility" in acquisition, carried-interest and financing items.
What to watch in Q3:
Whether U.S. property sales keep growing at about 20% while overseas markets lag. The 10-Q calls overseas growth "more modest" and notes slower fundraising from Middle East capital sources during the regional conflict.
Any further increase in the Telford remediation estimate.
Critical infrastructure growth: Q3 still includes Pearce as an addition, so the cleaner test of organic data-center demand comes once Pearce is in the prior-year comparison, from November 2026.
Whether operating cash flow turns positive in the second half, since buybacks are currently funded partly with short-term debt.