The Smart Way to Play a Real Estate Recovery?

Commercial real estate has been in the doghouse since COVID. Higher interest rates froze capital markets, office vacancies soared, and uncertainty kept investors on the sidelines. 

But after nearly two years of pain, cracks of optimism are finally starting to show. 

Major players like KKR and the World Economic Forum now believe the worst may be behind us — and 2025 could mark a turning point for the sector. This theory is supported by the fact that the Real Estate Services Industry, which is currently rated B according to our Zen Ratings system, has been rising among the ranks of the 154 industries we track in recent weeks. (Want to use our Industry Ratings to find smarter stock picks? Here’s how.)

If this trend continues, CBRE Group (NYSE: CBRE), which is A-rated according to our Zen Ratings system, might be one of the smartest, lowest-risk ways to position for what comes next. Here’s why.

What Does CBRE Do?

Unlike REITs or developers that rely heavily on valuations, CBRE is a commercial real estate services firm. They don’t own properties — they manage, advise, lease, appraise, and transact them. That means CBRE makes money on activity and deal volume, not just rising prices. In a recovery, that kind of business model has leverage — and upside — without taking on the same level of risk.

The company operates in over 100 countries and is the go-to provider for many Fortune 500 clients. Its global scale, deep market insight, and end-to-end offerings make it a one-stop shop for institutional real estate. 

If a multinational needs to lease 10 floors in a Paris tower, sell a logistics hub in Singapore, or value a portfolio of data centers, CBRE is on the shortlist.

And after two sluggish years, it looks like the market is waking up.

Has Commercial Real Estate Bottomed?

Recent data from Hines shows that 66% of global real estate markets are now in some phase of the “buy” cycle — the highest level since 2016. That number hasn’t been this elevated since the early years of the post-GFC recovery. It’s not just wishful thinking. Transaction volumes are starting to recover as buyers and sellers gain confidence that property values have bottomed. (P.S. This isn’t the only industry in the middle of a cycle shift. Check out this article about the commodities “supercycle”)

A tidal wave of upcoming loan maturities — an estimated $1.5 trillion in the next 15 months — is also forcing owners to sell or refinance, creating opportunity across the capital stack.

Meanwhile, falling interest rates are removing one of the biggest barriers to real estate deals. Cap rates are adjusting, spreads are compressing, and private equity firms are putting money to work again. For CBRE, this means a revival in brokerage revenue, asset management fees, and capital markets activity.

The Bull Case For Commercial Real Estate and CBRE

The other big shift in 2025? Demographics and macro trends. Urbanization is accelerating. Global housing shortages are pushing more people toward renting. And logistics demand remains strong as companies continue to re-shore supply chains. Even the battered office sector is seeing green shoots in areas like life sciences and flex space. 

CBRE is positioned across all of the above.

That might be why top analysts see the stock moving between 10-25+% higher over the next year… 

See analyst price targets for CBRE here. 

The company scores a B for its Momentum and Financials Component Grades, meaning its starting to benefit from its long-term debt to assets, cost reduction, return on equity (ROE), and more.

And because of its business model, it’s a safer play than many other ways to play commercial real estate. So it’s no surprise CBRE also earns a B in Safety, which measures Stock Price Stability, Receivables Standard Deviation, Earnings Estimate Standard Deviation, and more. 

To see CBRE’s fundamentals and how it scores across all Component Grades, click here.

Bottom Line

Put it all together, and CBRE looks like a compelling way to bet on the next chapter of the real estate cycle. You’re not betting on office space in Manhattan or a multifamily tower in Phoenix. You’re betting on more deals, more capital, more tenants, more transactions. And CBRE is the one facilitating all of it — globally.

If commercial real estate is about to turn a corner, CBRE could lead the charge. Click here to add it to your watchlist.

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