CBRE Group lowered its full-year profit forecast on Friday, as high interest rates dampen demand for the company’s commercial property advisory services.
The real estate services company now expects core profit per share to fall by mid-30% in 2023, compared with its previous forecast of a 20-25% decline.
The U.S. Federal Reserve’s move to raise interest rates to tackle inflation has reduced credit availability in the market, hurting property sales and debt financing activity.
“Commercial real estate capital markets remained under significant pressure in the third quarter,” CEO Bob Sulentic said in a statement.
The Dallas, Texas-based company said its third-quarter core earnings per share fell to 72 cents from a year earlier, but beat analysts’ expectations of 67 cents per share, as per LSEG data.
The company also topped Wall Street estimates for quarterly revenue that came in at $7.87 billion, compared with analysts’ average estimate of $7.42 billion.
Based on 2022 revenue, CBRE is the world’s largest commercial real estate services and investment firm. It provides advisory services related to property leasing, capital markets, mortgage sales and servicing, property management and valuation.