Five brokerages show the recovery runs beyond data centers

CBRE, JLL, Cushman & Wakefield, Colliers and Newmark all posted double-digit revenue growth in the second quarter, according to CoStar News. Several raised their annual profit forecasts. The results have a familiar engine — artificial intelligence — but the recovery they describe runs broader than the data center trade.

CoStar attributes the gains to an increasingly rare combination: a broad rebound in non-data-center real estate on one side, and the AI build-out on the other. The rebound side is a drop in construction across office, industrial and apartment markets, which is limiting the supply of competing space after years of elevated interest rates, overbuilding and shifting consumer habits. The AI side is generating business for site selection, construction management, leasing, financing and operating facilities. Together, they are driving stronger leasing, more deals and expanding profit margins at the world's largest brokerage and property services firms.

The combination matters because the two forces pull in different directions. AI-related demand is showing up in concentrated office hubs, while the construction drought is lifting conditions across property types. When both operate at once, revenue widens beyond the headline trades.

The recovery has limits. CoStar News cites elevated borrowing costs, geopolitical uncertainty and continuing weakness among older properties in oversupplied markets. Executives quoted by CoStar still predict strong deal activity ahead.

For owners of existing buildings, the construction drought is the quiet half of the story. Years of overbuilding left markets with too much space from the last cycle. Now groundbreakings have fallen far enough that existing buildings face less vacancy pressure. That shift shows up in the revenue of the firms that lease and sell them. CoStar notes the weakness has not disappeared — older properties in oversupplied markets still struggle — but the pricing power that owners lost in the last cycle is slowly returning.

The risk is that the current restraint is a temporary condition. If rents keep climbing, developers will start projects again, bringing supply back. That is how the last cycle ended, and nothing in CoStar's account suggests the industry has become permanently disciplined.

The AI portion of the story is narrower than the headlines suggest. As CoStar notes, artificial intelligence firms have bolstered leasing in office hubs such as Yerba Buena Gardens in San Francisco's South of Market district. Those concentrations are real, but they are not the whole office market. Most office leasing still depends on the old economy of occupancy and commuting.

For allocators, the brokerages' second-quarter results are a useful gauge because they capture both fee income and transaction income. Data centers produce fees that do not depend on property prices rising — site selection, construction management, leasing, financing, operations. Conventional property recovery produces transactions. When both rise at once, margins expand. That is what the five firms just reported.

The margin expansion is the number to watch. If construction starts rebound, the scarcity that helps existing owners disappears. If AI infrastructure spending slows, the fee stream thins. Either way, the brokerage results show a recovery that is real but conditional.