Commercial real estate (CRE) is more than just properties and transactions — it’s a dynamic ecosystem powered by companies that handle everything from property management to operational support. Unlike traditional real estate, CRE thrives on active oversight, creating a wealth of opportunities for businesses and investors alike.
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Operating within a vast and diverse market, CRE service firms manage everything from small storefronts and big-box retailers to warehouses and apartment complexes.
ResearchAndMarkets.com valued the global real estate market at $3.89 trillion last year, with a projected compound annual growth rate of 9.3% through 2030. This growth trajectory positions CRE services as a promising arena for investment.
Summing up the CRE situation for Goldman Sachs, analyst Julien Blouin writes: “In 2024, the CRE Service companies started to recover from the capital markets slowdown of 2023. 2025 is shaping up as a year of continued gradual improvement. CRE debt markets have been the first part of the capital markets ecosystem to unfreeze. The combination of narrowing credit spreads, improving financing availability, and a healthy outlook for US real-GDP growth supports the prospects of a recovery in CRE transaction activity over the medium term.”
Blouin identifies key investment themes within CRE, emphasizing opportunities in companies that exhibit certain strengths: exposure to capital markets with growing market share, resilient high-growth business models, and a track record of prudent allocation and reinvestment. The analyst has spotlighted two CRE stocks as standout investment choices, assigning each a ‘Buy’ rating and projecting double-digit upside potential.
To shed more light on these investment opportunities, we’ve tapped into the TipRanks database for the latest details on both CRE picks. Here’s a closer look at why they’re worth keeping an eye on.
Jones Lang LaSalle (JLL)
The first commercial real estate stock we’ll look at is Jones Lang LaSalle, a Chicago-based company that traces its roots back to 18th-century London. The modern incarnation of the company was formed in 1999, through the merger of Jones Lang Wootton and LaSalle Partners. Today, the company’s business centers around commercial real estate and investment management on the global scene. JLL works with its clients on the purchase, building, use, and management of a wide range of commercial properties – including industrial, hotel, residential, and retail sites.
This is more than just big business, it’s huge – as some numbers will show. The company’s complete portfolio of managed properties and other activities totaled some 4.8 billion square feet of space as of December 31, 2023, and generated $20.3 billion in revenue for the year. Included in this portfolio were 16,500 agency leasing transactions for 303 million square feet, another 16,500 tenant representation transactions that totaled 539 million square feet, and management services for 3 billion square feet worth of properties. Jones Lang LaSalle provides these services for a customer base that includes institutional, retail, and corporate investment clients, as well as high-net-worth individuals with large real estate interests.
JLL has shown sound financial results in recent quarters, with consistent year-over-year quarterly revenue gains this year. In the last reported quarter, 3Q24, continued this trend. Revenues came in at $5.9 billion, up more than 15% year-over-year, and $280 million better than had been expected. The company’s earnings figure, $3.50 per share on a non-GAAP basis, was up from $2.19 in the previous year and beat the forecast by 76 cents per share. We should note here that JLL shares have outperformed the S&P 500 this year, gaining more than 42% compared to the index’s 27% increase.
In his coverage of JLL for Goldman, analyst Blouin takes note of the company’s scale and productivity, writing of it, “JLL is well positioned to benefit from upturn in brokerage business. JLL has one of the largest capital markets exposures in our coverage. Moreover… JLL has been the largest market share winner both over the long term and more recently, reflecting M&A (HFF in 2019), investments in hiring, and organic market share gains. We believe JLL’s use of technology (investments made via JLL Technologies/Spark platforms) makes its brokers more productive and, we believe, helps drive organic share gains over time. We also note that the company has the top ranked mortgage origination business in our coverage.”
The analyst goes on to give some quantitative growth predictions, adding, “As a result, we believe JLL is particularly well positioned to benefit in the early innings of the capital markets recovery, and we expect capital markets growth of 15.4% in 2025 (300bps higher than consensus).”
These comments back up Blouin’s Buy rating, and his $352 price target implies a 12-month upside of 31%. (To watch Blouin’s track record, click here)
The Strong Buy consensus rating on JLL is based on 6 recent analyst reviews, which include 5 Buys and 1 Hold. The shares are priced at $268.64 and their $329.6 average price target suggests an upside potential of more than 22.5% on the one-year time horizon. (See JLL stock forecast)
CBRE Group (CBRE)
Next up on our list is CBRE Group, the largest of the global CRE services and investment firms. The company boasts a $41.5 billion market cap and more than $148 billion in assets under management. The company employs more than 130,000 people in over 500 offices across 100 countries, conducting its business in commercial property leasing, sales, management, and valuation. The company holds the #1 spot among US commercial property developers, and its roots stretch back to 1906.
CBRE Group offers its services across a wide range of industries, for a diverse list of property types. The industries served include healthcare, automotive, manufacturing, the public sector, banking and finance, data centers – the company has its hands in most sectors of the economy. The diversity of property types in CBRE’s portfolio matches the diversity of the industries the company serves. CBRE deals in office and retail, industrial and logistics, multifamily housing, gaming sites, healthcare facilities, hotels – even parking lots.
Like JLL above, this commercial real estate company has seen its stock outpace the overall markets this year. CBRE shares are up 46% for the year-to-date, with the stock’s gains really taking off in the second half of the year.
During this calendar year, CBRE has seen its quarterly results show consistent y/y revenue gains. In 3Q24, that top line was up 15% from 3Q23, to hit $9.04 billion, and beat the estimates by $240 million. CBRE’s bottom line, the non-GAAP EPS, was 14 cents per share better than anticipated, at $1.20.
Goldman’s Blouin lists several reasons investors should like this stock, writing of the company, “We like CBRE for (i) continued gains in leasing market share and its strong positioning heading into a capital markets recovery (highest investment sales market share and #2 CRE mortgage originator); (ii) the underappreciated growth and profitability profiles of its resilient businesses; and (iii) best in class capital allocation track record (highlighted by Turner & Townsend)…”
Blouin goes on to outline an upbeat future for CBRE Group, when he adds, “We expect a continued gradual recovery in leasing volumes, transaction volumes, and loan origination volumes based on a soft-landing scenario. As a result, we expect the continued gradual improvement in transactional revenues (Leasing +12% YoY growth in 2025, investment sales +16%, origination advisory revenues +15%).”
All of that adds up to a Buy rating from Goldman Sachs, and a price target of $176 that indicates a one-year gain of 29.5%.
This is a stock with a Moderate Buy consensus rating, based on an even split of the 6 recent reviews – 3 each to Buy and Hold. The stock has a current trading price of $135.88 and its $143 average target price indicates potential for a modest 5% gain in the coming year. (See CBRE stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
