You are right, it is a picks and shovels play. While REITs have spent the last two years battling high interest rates, debt refinancing, and declining occupancy, FirstService has largely avoided those by offering more of a recurring revenue service business.
However, that also doesn't mean FSV won't be impacted. It has gone through a 4+ year period here of effectively flat returns. This is due to a few things. For one, the stock was way too expensive back then. Valuation reset, and a large one at that. This was likely due to the pandemic level real estate bubble we hit.
But secondly, organic growth back then was 9–10%. By the end of last year, organic growth had dropped to nearly flat. The company is now large enough that it needs to make big swings to move the needle. Those swings also require a ton of debt, which has hit them hard during the higher rate environment.
Stock is currently in show me mode. Higher organic growth returns, I think you see this one run up again. High quality company, but one that got way too expensive during the pandemic and is now struggling to grow outside of making acquisitions.