The commercial real estate services industry is making significant investments in data centers, driven by the rapid expansion of artificial intelligence and cloud computing. Major firms are seeing substantial revenue growth from managing the entire lifecycle of these critical digital infrastructure projects.
Key Takeaways
- CBRE acquired Pearce Services for $1.2 billion, signaling a major push into data center support.
- Data centers are becoming a fifth major property sector, alongside office, industrial, multifamily, and retail.
- Real estate service firms are involved in all stages, from site selection and financing to construction and operations.
- Concerns about a potential 'bubble' in data center overbuilding are being addressed by long project lead times.
- Firms like JLL, Cushman & Wakefield, Colliers, and Newmark are actively expanding their data center services.
Real Estate Giants Bet Big on Digital Infrastructure
Commercial real estate services companies are placing large bets on the data center market. This sector is rapidly expanding due to the increasing demand for artificial intelligence (AI) and cloud storage. Dallas-based CBRE, the largest property services firm globally, made a major move in November by acquiring Pearce Services. The cash deal, valued at $1.2 billion, brought in a technical support provider for digital and power systems with 4,000 employees across the United States and India.
This acquisition positions CBRE ahead of its competitors in capitalizing on the growing need for data center support. Global companies are investing hundreds of billions of dollars into AI networks, creating a massive demand for specialized services.
Fact Check
- CBRE's Pearce Acquisition: $1.2 billion cash deal.
- Pearce Services Employees: 4,000 in the US and India.
- CBRE's 2026 Earnings Forecast: Data center services to account for about 10% of total EBITDA.
A New Pillar for Property Services
Industry experts now suggest that data centers are evolving into a fifth primary property sector. This stands alongside traditional categories like office, industrial, multifamily, and retail. This shift reflects the sector's growing importance and revenue potential for global brokerages.
Major real estate service firms, including JLL, Cushman & Wakefield, Colliers, and Newmark, have all highlighted data centers as a significant and growing source of revenue in their recent earnings reports. They are actively collaborating with data center developers, technology giants, and power companies to meet this demand.
"We build them, we operate them and run them, these very mission-critical facilities," said Ali Greenwood, Executive Director in Cushman & Wakefield's global data center advisory group. "Several service lines touch the data centers and the requirements of our clients across the entire lifecycle."
Comprehensive Support Across the Lifecycle
These firms offer services that cover every stage of data center development and operation. This includes identifying suitable sites, negotiating incentive packages, and purchasing land. They also arrange loans, oversee construction, and manage the finished facilities. This comprehensive approach ensures that clients have support from concept to ongoing operation.
Background on Data Centers
Data centers are physical facilities that house computer systems and associated components, such as telecommunications and storage systems. They are essential for modern digital infrastructure, supporting everything from internet browsing and email to advanced applications like artificial intelligence and cloud computing. Their continuous operation is critical for businesses and consumers worldwide.
Concerns and Confidence in Growth
The rapid investment in data centers has led to some concerns about potential overbuilding. Some analysts draw parallels to the dot-com bubble, where excessive investment in internet infrastructure led to market struggles. However, many in the industry remain confident that a bubble is unlikely.
JLL, the second-largest real estate services firm, estimates that data center projects totaling over 100 gigawatts of capacity will begin or break ground by 2030. Despite this large pipeline, JLL executives have downplayed the risk of overbuilding. They point to the long project lead times, which include significant waiting periods to connect to often-overextended power grids, as a natural control on development speed.
"Compared to almost any other asset class, our product takes a long time to get out of the ground," stated Carl Beardsley, JLL Senior Managing Director of Capital Markets. "There's a good balance of supply and demand, so I personally do not think we're in a bubble."
Financial Impact on Brokerages
This confidence is translating directly into financial gains for real estate brokerages. Colliers, the fourth-largest firm, reported a 24% increase in revenue to $1.46 billion for the third quarter, explicitly citing data centers as a key growth driver. CBRE anticipates that services related to data centers will represent about 10% of its total earnings before interest, taxes, depreciation, and amortization (EBITDA) by 2026. The firm currently manages approximately 800 data centers globally.
Strategic Moves by Industry Leaders
The acquisition of Pearce Services significantly boosts CBRE's technical capabilities. It enhances their expertise in design engineering, maintenance, and repair of critical infrastructure, including data centers, telecommunications, and renewable energy. This strategic move is expected to generate an additional $660 million in revenue next year for CBRE's building operations and experience segment, a key area for resilient, non-transactional services.
CBRE CEO Bob Sulentic called the Pearce acquisition a "bull's-eye for our strategy," emphasizing its role in driving income from building operations and its strong growth profile. He also highlighted opportunities for synergy with CBRE's existing data center work.
Competitors Expand Offerings
Other major players are also making strategic moves. Newmark has expanded its data center financing services. For example, the firm advised Blue Owl Capital in raising nearly $13 billion to fund a massive data center campus in Abilene, Texas, which will be a hub for the Stargate AI infrastructure project. This included a record-breaking $7.1 billion construction loan.
Cushman & Wakefield is moving beyond traditional facilities management into engineering and technology services for data centers. CEO Michelle MacKay noted that with global data center capacity expected to at least double in the next five years, the firm is "scaling up our business quickly." They recently launched Athena, a web-based site selection tool specifically for data centers.
- JLL's Partnerships: Teamed up with InfraPartners for prefabricated AI data centers, launched an energy advisory practice, and acquired SKAE Power Solutions.
- Cushman & Wakefield's Innovation: Released Athena, a web-based site selection tool for data centers.
- Newmark's Financing Expertise: Advised on a record $7.1 billion construction loan for the Stargate AI project.
Beyond Hyperscalers: Enterprise Wholesale Growth
While much of the focus is on large facilities for AI and hyperscalers, there is also significant growth in enterprise wholesale data centers. These facilities, operated by companies like Digital Realty and Equinix, lease out space, power, and cooling to other large enterprises, including financial firms and the healthcare industry.
Michelle MacKay and Ali Greenwood of Cushman & Wakefield recently toured an enterprise wholesale data center project with a three-year development pipeline not reliant on the AI boom. This segment has shown tremendous year-over-year growth, with preleasing rates over 70% and vacancy rates as low as 2.5% for facilities still years from delivery.
