Three growth engines firing despite margin pressure
- Commercial Real Estate Services saw a broad recovery, with capital markets and leasing revenues both growing more than 20% in the second quarter.
- The engineering segment expanded with the close of the Ayesa acquisition, driving 27% net revenue growth.
- Investment Management grew revenue by 15%, but net margin compressed to 36.5% due to integration costs.
- Management kept the 2026 fundraising goal at $6 billion to $9 billion, which is critical for a 2027 earnings rebound.
- Second quarter leverage came in at 2.8x, better than expected, with a goal to lower that to 2.3x by year end.
Growth across the board
Colliers has a clearer growth setup now that all three segments are expanding. Engineering was already the big story, and the Ayesa deal has now closed, bringing in new global capabilities in desalination and marine sectors. Second quarter results added strong momentum in Commercial Real Estate Services, with capital markets and leasing both growing more than 20%.
That broad transaction recovery helps offset the known headwind in Investment Management. Spending on integration under the Harrison Street brand is pulling margins down for a few quarters, with the second quarter net margin hitting 36.5%.
The bear case remains tied to this margin compression. Management expects this business to stay in the high 30s before recovering toward the low 40s in 2027. If fundraising falls short of the $6 billion to $9 billion target, that recovery could slip.
The stock also needs proof that the company can bring its debt down. Leverage ended the second quarter at 2.8x. While that was better than expected, the path to 2.3x by the end of the year is an important test for the balance sheet.
Fees from buildings, projects, and capital
Colliers makes money in three main ways. It advises on commercial real estate deals, manages engineering and project work, and earns fees from investment funds through Harrison Street Asset Management.
Some of the business moves with the property cycle. Capital Markets helps clients sell buildings and arrange debt, so it can rise fast when buyers come back. Leasing also depends on tenant demand, office use, warehouse activity, and business confidence.
Management wants the company to be less exposed to that cycle. It notes that about 70% of earnings come from more resilient businesses, a mix that approaches 75% after recent acquisitions. Those include Engineering, Investment Management, Property Management, and Outsourcing.
What Colliers sells
Capital Markets
This team helps clients buy, sell, and finance commercial properties. It is cyclical, but it is a major current driver inside Commercial Real Estate Services, with revenue up over 20% in the second quarter.
Leasing
Leasing helps landlords and tenants sign space agreements. Revenue rose more than 20% in the second quarter, marking a broad transaction recovery.
Property Management and Outsourcing
These services are more repeatable than transaction work. Management expects Outsourcing to grow around 5% for full-year 2026.
Engineering and Design
This segment provides engineering and project management services. It recently expanded globally with the close of the Ayesa acquisition, driving 27% revenue growth in the second quarter.
Harrison Street Asset Management
This unit manages alternative real estate investments and raises new capital. The 2026 fundraising target remains $6 billion to $9 billion.
RoundShield European credit platform
RoundShield adds European credit, student housing, and hospitality exposure to Investment Management. It also adds integration work, which is part of the near-term margin pressure.
Revenue mix before Ayesa
Segment shares use full-year 2025 revenue from Colliers' February 2026 annual results release. The recent close of the Ayesa acquisition will change this mix in future periods.
What can break the setup
Investment Management margin recovery slips
High impact · Medium oddsInvestment Management is the main execution risk. The second quarter net margin was 36.5%, and management expects pressure to continue before recovering toward the low 40s in 2027. If integration costs last longer, earnings may disappoint even if revenue grows.
Ayesa adds scale but also debt
High impact · Medium oddsThe Ayesa deal expands Engineering across the globe, but it is funded with debt. Leverage ended the second quarter at 2.8x. While that was better than expected, the company still needs to reduce this metric to 2.3x by year end.
Tougher transaction comparables
Medium impact · Medium oddsCapital Markets and Leasing saw massive growth in the second quarter. However, the rest of the year faces tougher comparisons. Management expects growth to naturally decelerate against stronger prior-year results in the third and fourth quarters.
Fundraising misses the target
Medium impact · Medium oddsInvestment Management needs fresh capital to restart stronger fee growth. The segment raised about $3 billion in the first half of the year against a 2026 goal of $6 billion to $9 billion. A shortfall in the second half would make the 2027 earnings rebound harder.
Global macro and currency swings
Medium impact · Medium oddsColliers operates globally but reports in U.S. dollars, meaning currency moves can directly affect reported earnings. A weaker global economic backdrop can also hit transactions, fundraising, and engineering demand at the same time.
In one breath
What does Colliers International do?
Colliers advises on commercial real estate, manages engineering and project work, and runs real estate investment funds. Its main segments are Commercial Real Estate Services, Engineering, and Investment Management.
Why is Ayesa important for Colliers?
Ayesa makes the Engineering segment much larger and more global. With the deal now closed, it expands the company into new sectors like desalination and marine engineering.
What is the biggest risk for CIGI right now?
The biggest near-term risk is Investment Management margin pressure. The second quarter net margin dropped to 36.5%, and the thesis depends on this pressure recovering by 2027.
Is Colliers mainly a real estate broker?
Commercial real estate advice is still the largest revenue segment, but Colliers is broader than brokerage. Management says about 70% of earnings come from more resilient areas such as Engineering, Investment Management, Property Management, and Outsourcing.
