Q1 2025 Jones Lang LaSalle Inc Earnings Call

Aaron: Good morning, my name is Aaron, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Jones Lang LaSalle Inc. Q1 2025 earnings conference call.

Aaron: All lines have been placed on mute to prevent any background noise and after the speakers remarks there will be a question and answer session at that point if you would like to ask a question

Aaron: Simply press star, followed by the number one on your telephone keypad. And if at any point you would like to withdraw your question, simply press star, followed by the number one again.

Speaker Change: With that, I am pleased to turn the call over to Sean Cogland, Head of Investor Relations. Sean, may begin.

Sean Coghlan: Thank you and good morning. Welcome to the first quarter of 2025 earnings conference call for Jones Lang LaSalle Inc. Further this morning we issued our earnings release along with a slide presentation and Excel file intended to supplement our prepared remarks.

Sean Coghlan: During the call, as well as in our slide presentation and supplemental Excel file, we reference our in non-GAAP financial measures, which we believe provide useful information for investors.

Sean Coghlan: We include reconciliations of non-GAF financial measures to GAF in our earnings release and

Sean Coghlan: We also reference resilient and transactional revenues, which we define in the footnotes of our earnings release.

Sean Coghlan: Effective with first quarter results, we updated our definitions to shift project management from transactional to resilient. Categorizations of all other business lines remain unchanged.

Sean Coghlan: As a reminder, today's call is being webcast live and recorded. A transcript and recording of this conference call will be posted to our website. Any statements made about future results and performance, plans, expectations and objectives are for looking statements.

Sean Coghlan: Actual results and performance may differ from those four-looking statements as a result of factors discussed in our annual report on Form 10K and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any four-looking statements.

Sean Coghlan: Finally, a reminder that percentage variances are against the prior year period in low-currency and less otherwise noted. I will now turn the call over to Christian Ulbrich, our President and Chief Executive Officer for opening remarks.

Christian Ulbrich: Thank you, Sean. Hello and welcome to our first quarter, 2025 earnings call.

Christian Ulbrich: As we look back at the first quarter, we are pleased with our financial results, with double digit revenue gains across both our resilient and transactional businesses, and 28 percent gross and adjusted EPS.

Christian Ulbrich: The continued improvement of our leasing and investment sales debt and equity advisory businesses was a key driver of higher profit and margin.

The stain grows of double-digit Brazilian revenue further amplified these gains.

Christian Ulbrich: Driving a strong start for a newly formed real estate management services segment.

Christian Ulbrich: Since the end of the quarter, the market backdrop has become more dynamic and is creating a more challenging, operating environment for companies.

Christian Ulbrich: We remain confident in the strengths and resilience of our company and our industry leading platform.

Christian Ulbrich: Slower economic growth could have still over effects for our industry, but it is still too early to predict the future implications for our business.

Christian Ulbrich: Despite the challenges of the current economic climate, we maintain high conviction in our strategy and the long-term structural drivers for our industry.

Christian Ulbrich: We remain focused on profitable and sustainable growth and will continue to strategically invest in our people in platform.

Christian Ulbrich: We have built leading businesses that will remain key contributors to our outperformers through market volatility.

I will highlight three of these areas today [inaudible]

Christian Ulbrich: First, our Retreat Management Services business has capitalized on the growing trend of outsourcing as well as the increased focus on building operations and tenant experience across occupier and investor portfolios.

Christian Ulbrich: We are building differentiated and scalable platforms across our workplace management and project management businesses and we are now globalizing our probably management business with a shift into this segment which went into effect on January 1st.

Christian Ulbrich: We believe many geographies and industries have significant untapped potential for outsourcing penetration and advancements in technology, including in artificial intelligence, which will further transform how we serve clients in the future.

Christian Ulbrich: Across all our people, data and technology, we are investing to grow the revenue and profit contributions in particular of our resilient businesses.

Christian Ulbrich: Second, Gerald L. has been a beneficiary of increasing capital flows to real estate for many decades, creating products and services to meet the needs of our investor clients throughout the asset's life cycle

Christian Ulbrich: The proliferation of private credit has brought new sources of debt capital into the market and has become a key driver of our business with notable gross prospects ahead. We are the largest debt intermediary in commercial real estate globally through our debt advisory business, where revenue gross exceeded 45% in the first quarter.

Christian Ulbrich: An investment management, our business has experienced operating credit funds across Europe and North America, dating back 15 years.

Christian Ulbrich: We are seeing strong fundraising demand in both regions today, particularly for our US credit strategy.

Christian Ulbrich: Our deep expertise in real estate debt is providing us with an unparalleled level of data and insights in the industry.

Christian Ulbrich: allowing us to better advise clients and gain market share while introducing a degree of resilience

Christian Ulbrich: Third, Taylor Wins are emerging which support a broader recovery in the office sector, supported by the expansion of return to office mandate.

Christian Ulbrich: Modulation of downsizing rates in office-leasing activity and liquidity improvements for office sales and financing

Christian Ulbrich: Corporate around the world are gaining more clarity on future space needs and with historically low development pipelines in the US and Europe , office fundamentals and friends are likely to continue to strengthen for top tier buildings.

Christian Ulbrich: Quality assets are also growing more scarce, creating spillover demand for the next tier of buildings

Christian Ulbrich: We have seen positive improvements in office transaction revenues of the past year, in particular in the US, where pressures on the sector have been most pronounced.

Christian Ulbrich: As clients optimize office holdings, increase acquisition activity in the sector, and reinvest in buildings and spaces, JLL is well positioned to lead the office sectors repound with the collective data and insight of the full firm.

Speaker Change: After five years as CFO , I'm pleased to share that Karen will be taking on a new role on our global executive board as chief executive officer of our Leasing Advisory Business globally, effective July 1st.

Speaker Change: Andy Popping, current CEO of Leasing Advisory, will assume the role of CEO Leasing Advisory in May and Asia Pacific, reporting to Karen and based out of Europe .

Speaker Change: Throughout Karen's more than 25 year tenure JLL, she has exemplified strategic vision, excellence in execution, and dedication to our clients, as she has taken on numerous leadership roles across our business globally.

Speaker Change: I'm also pleased to announce that Kelly Howe will succeed Karen as JLG Financial Officer.

Speaker Change: Kelly joined jail out as the CFO of Leasing Advisory in January 2024 after 23 plus years of experience and professional services with Boston Consulting Group, most recently as the North America CFO .

Kelly will join our global executive board.

Speaker Change: With that, I will now turn the call over to Karen to provide details on our results for the quarter.

Karen: Thank you, Christian. I have enjoyed working closely with our investor community over the past five years and look forward to continuing to work with you all and my new capacity as CEO of Leasing Advisory. We are excited to introduce you all to Cali later this year.

Speaker Change: Kelly's financial leadership and growth mindset positioned her well to leading Kerry Ford, the strategic priorities of the CFO's office and our finance organization.

Now to our results.

Speaker Change: Our first quarter reflects the continuation of positive business momentum, as well as the impact of our ongoing investment to unify our data, technology and people that enhance the outcomes we deliver to clients.

Speaker Change: Additionally, our focus on operating efficiency produce meaningful margin expansion and earnings growth.

I will now review our operating performance by segment

Beginning with real estate management services. [inaudible]

Speaker Change: Within project management, new client win and an increase in existing client activity, most notably in the US and Asia Pacific, drove near a double-digit growth in management fees and was supplemented by higher pass-through costs.

Speaker Change: The investments in our technology platform, including artificial intelligence and project management work flow tools.

Speaker Change: and the incremental human capital investments we made in a latter part of 2024 to support future business growth, notably within project management, laid on the segment-adjusted EVA DAW performance.

Speaker Change: Looking ahead, we continue to expect workplace management growth to moderate from the elevated levels of the past year as we lap a large contract lens in mandated expansion.

Speaker Change: In addition, certain clients have delayed decisions as they monitor policy and macro development.

Speaker Change: Still, we remain confident in a long-term trajectory of the workplace management business, as our sales pipeline is strong and contract renewal rates are healthy and stable.

Speaker Change: For project management, the strong growth in leasing over the past-level quarters is supportive of continued client activity. However, blowing corporate cat-backs and the recent shifts in the macro-environment may temper near term growth rates.

Speaker Change: Within property management, we expect revenue trends of the past few quarters to continue in the near term as we work to bring together our team,

Speaker Change: For this segment, we continue to target healthy annual margin expansion, though it is not likely to be linear as we balance long-term growth and profitability alongside near-term business performance, mix, and investments.

Moving next to Leasing Advisory

Speaker Change: Broad-based revenue growth across asset classes was led by an 18% increase in office and accelerated momentum with an industrial, which was up 14%.

Speaker Change: The office revenue growth outpaced the 9% market increase while industrial compared favorably to the 10% market decline according to jail or research.

Speaker Change: Most geographies achieve double digit leasing revenue growth, notably the US, Canada, greater China and Germany.

Speaker Change: US office leasing increased for the fifth consecutive quarter, exceeding first quarter at 2019 levels, driven in part by growth in the number of large leasing transactions.

Speaker Change: Large transactions in the US, where JOL historically has had a greater share of the market, remain approximately 30% below pre-pandemic averages, according to JOL research.

Speaker Change: Higher leasing advisory, adjusted EBITDA and margin for the quarter, with primarily driven by leasing revenue growth, as well as continued improvement in platform leverage

Speaker Change: Looking ahead, the General Stability of the OECD Business Competence Index for much of 2024 and through March provided reason for cautious optimism for 2025.

Speaker Change: A Christian mentioned client demand for high quality and sustainable assets which are becoming increasingly scarce, remain the consistent trend.

Speaker Change: Within office, current requirements are generally steady with sectors such as professional services, finance, and legal driving demand in many markets. So as we've seen in the recent past, this could evolve quickly as clients consider the macro outlook.

Speaker Change: The dynamic policy backdrop has led to uncertainty for select industrial clients as they assess the impact of supply chain, production and the economy.

Shifting to a Capital Market Services segment [inaudible]

Speaker Change: Increased investor desire to transact and more liquidity entering the market supported the continuation of favorable trends from the fourth quarter and field revenue growth in the current quarter of over 45% in debt advisory and 15% in investment sales.

Speaker Change: Globally, the residential sector contributed the most significant increase to revenue, followed by hotels and industrial

Speaker Change: Within the office sector, significant growth in the U.S. was mostly offset by declines in several countries.

Speaker Change: On a geographic basis, revenue growth was led by the U.S. with debt advisory of 49% and a 46% increase in investment sales, which compared favorably to the 42% growth in market volume according to jail law research.

Speaker Change: Our investment sell across India and Asia Pacific, land regional market volume, and part due to notable outperformance a year ago.

Speaker Change: The increase in capital market services adjusted EBIDAN margin was predominantly driven by higher transactional revenues and continued improvement in platform leverage.

Speaker Change: The incremental margin in the quarter included additional expense for platform investments.

Speaker Change: Looking ahead, our global investment sales, debt and equity advisory pipeline remain strong, and a timing and case of guilt closing will be influenced by the evolution of the interest rate and economic outlooks.

Christian Ulbrich: The increased uncertainty that Christian described is affecting investor underwriting, although it is too early to assess the extent to which transaction activity may be impacted.

Christian Ulbrich: The strength of our differentiated data-driven global platform positions us to continue to gain market share

Turning to Investment Management

Christian Ulbrich: Advisory fees declined largely on lower assets under management, primarily reflecting dispositions of assets on behalf of certain clients in the fourth quarter.

Christian Ulbrich: Absolute foreign currency exchange movements, assets under management declined 6% from a year earlier, largely due to that asset disposition as that valuation changes over the trailing 12 months were negligible

Christian Ulbrich: The changes and adjusted EBITDA and margin in the quarter were primarily driven by the lower overall revenue, foreign currency transaction losses in the current quarter and timing of certain expenses.

Christian Ulbrich: We are encouraged by signs of recovery in the capital raising environment.

Christian Ulbrich: In the first quarter, we raised $1.9 billion, compared with $500 million a year ago and $2.9 billion for full year, $224, with a notable uptick in demand for credit strategies, particularly in the US.

Christian Ulbrich: So the flow through to revenue will take several quarters to manifest that.

Moving to Software and Technology Solutions [inaudible]

Christian Ulbrich: Winds from New and existing clients drove continued growth and software revenue that was partially off-step by lower technology solutions bookings over the past year.

Christian Ulbrich: The benefit from your re-year change in carried interest related to equity losses within our investment portfolio was partially offset by growth in revenue related expenses and drove the adjusted EBITDA improvements.

Christian Ulbrich: We continue to invest in our software and technology solutions platform to drive growth while remaining focused on attaining sustained profitability within the segment.

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Speaker Change: Turning to cashflow, the negative free cashflow reflected typical seasonal business trends, notably payment of annual and son of compensation.

Speaker Change: The incremental outflow in the quarter was largely due to timing of Matt Reimbursable's activity as well as greater commission payments, reflecting higher transactional revenue in the fourth quarter, 2024, compared with the fourth quarter, 2023.

Speaker Change: These factors were partially offset by greater cash provided by earnings.

Speaker Change: While cash conversion ratios can vary notably from year-to-year for variety of factors, enhancing our working capital efficiency remains the top priority as we focus on improving our 10-year average cash conversion ratio of 80%.

I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry

Speaker Change: In addition, we had $1.6 billion of untapped capacity on a commercial paper program.

Speaker Change: As of March 31st, reported net leverage was 1.4 times down from 1.9 times a year earlier due to both a reduction in net debt and higher adjusted eva da over the trelling 12 months.

Speaker Change: As the reminder, our leverage is seasonal with the first quarter, typically the highest

Speaker Change: We continue to manage to a full-year average leverage ratio of around one time, the midpoint of our zero to two times target range.

Speaker Change: Capital Deployment Priorities are focused first on organic growth as we invest in our people and platforms to further differentiate our services and drive productivity across business lines.

Speaker Change: We continue to pursue select acquisitions that augment organic initiatives, improve our capabilities, and span multiple business lines, particularly within our resilient businesses.

Speaker Change: Regarding our 2025 full-year financial outlook, we are encouraged by our strong pipelines alongside business trends to date. However, it is still too early to fully discern the impact of the recent influence tariffs policy shifts on the broader economy as well as our industry and business.

Speaker Change: Thus, we are maintaining our full-year adjusted EBITDA target range of $1.25 to $1.45 million $1.

Speaker Change: Our business is much more resilient today than in prior cycles, which combine with our ongoing focus on operating efficiency and our strong balance sheet, position us for long-term, profitable growth.

Christian Backfield

Thank you Karen.

Sean Coghlan: So with CAP become more pronounced, our strengths during this time of uncertainty is underpinned by our strategic investments in our people and our platform.

Sean Coghlan: As a strong and agile organization, we continue to adapt to rapid-changing market dynamics.

Sean Coghlan: The growth of our resilient businesses offers greater diversification of revenue and stability to economic cycles and we enter this period with elevated transaction pipelines and a relatively early point in a cyclical recovery.

Sean Coghlan: Importantly, our global team is united by our shared culture of client authenticity, focused on continually providing superior outcomes for our clients

Sean Coghlan: Before I close, I would like to once again thank my colleagues for their resilience, client focus and dedication. You are the driving force behind our achievements.

Operator, please explain the Q&A process.

Speaker Change: Christian, thank you. And ladies and gentlemen, if you would like to ask a question today remember you need to star followed by the number one on your touch tone. Keep that.

Sean Coghlan: Our first question for today comes from the line of Peter Abramowitz with Jeff Freese, your line is left.

Sean Coghlan: Yes, thank you very much for taking the questions Just wondering if you could comment maybe specifically about kind of how you underwrite the longer term kind of political risk with this administration that you can, um,

Speaker Change: You know, I think one of the things that is a possibility out there is that these kind of 90 day extensions on tariffs could just become

Speaker Change: The new sort of normal operating environment. So, you know, if that's something where we don't necessarily get a clear kind of answer for a long time, how we should think about kind of the structural growth outlook for the transactional businesses longer term. [inaudible]

Unknown Speaker 0

Speaker Change: Listen, one of the key points which people would agree on is that the current environment has increased the uncertainty and has decreased the visibility.

and if your scenario will be…

Speaker Change: Things going back and forth, and we all have to get used to operate in that environment hopefully equally successfully. Then we were operating in a clearer environment with better visibility. Thank you very much.

Speaker Change: operations, we are correlating with that GDP gross issue about the times the GDP is what we can try for those rates and so we look forward to a bit of a better visibility and we hope that also in the interest of our clients.

Speaker Change: Got it, that's helpful. And then on the real-state outsourcing side, I guess there's kind of...

Speaker Change: I love when we hit macro uncertainty, is that something that you think is kind of unaffected and companies really?

Speaker Change: Well, I mean, the reason for outsourcing your real estate needs are numerous. It could be driven by your interest in cutting costs.

Speaker Change: And so this is an environment that where people will look at their operating costs and will see that there may be an opportunity within their remit and that will drive them to talk to people like us.

in order to get those benefits. The other reason...

Speaker Change: is very often that they are expanding. And again, this environment could mean that stronger companies will pick up less strong companies.

Speaker Change: There will be opportunities going forward for the very best companies of each sector and a lot of those very successful companies are our clients, so we expect that will then lead to more business to us [inaudible]

Speaker Change: In the short term, the lack of visibility will mean that companies will be slower on decision making.

and that can have in the short term some impact.

also on our basis. So, the picture is…

Speaker Change: Strenky Mixed, it's way too early to tell whether that has a negative impact . . .

Speaker Change: on our outsourcing business, or whether it will almost be unimpacted by it. For the time being, we don't see any impact. But as I said, it's very early. And so, let's wait how that place out of the next couple of quarters. [inaudible]

All right, thank you for taking my questions.

Thank you.

Speaker Change: Our next question comes from the line of Anthony Paolone with JP Morgan, your line is live.

Speaker Change: Great, thank you, and first congrats to both Karen and Terri.

Speaker Change: You know, sound like maybe some pauses and making some decisions, but I guess as we start to think about later this year and maybe even beyond, what do you think the growth rate of that business should be and also how to think about margins? [inaudible]

Hi, Tony. Thank you. So, first on the revenue side.

and the segment.

Speaker Change: You know, as we've added property management into that segment we don't expect a material deviation from that over the medium and long term. We do expect a little bit of downward pressure on that expectation the current year as we work to further evolve and globalize our property management business. [inaudible]

Speaker Change: On the margin side, I do want to just call out, first, I'll start with a reminder of what happened in the current court, then I look out to the second quarter another full year. Thank you very much for your time.

Speaker Change: Two of those relate to continued investments for growth both in our platform and people as we are investing to continue to win new mandates and grow the top line.

Speaker Change: So the first is that we're making, as I mentioned, investments in our technology platform, which includes both client-facing tools, utilizing AI, as well as internal workflow tools for our teams. And then second, we ramped up hiring at the end of last year in a couple of countries in particular in anticipation of growth in 2025. That was particularly in our project management business.

Speaker Change: And then finally, I'd say the third point is really as we are absorbing the property management's business into the segment there are some transition costs associated with that activity.

Speaker Change: If we look to the second quarter, we do expect some of the same factors to be at play as in the first quarter and I also want to remind everyone that last year's second quarter we called out, we had a notable incentive compensation of cruel benefits, so we'll be lapping that.

In addition to the factors I've just referenced. [inaudible]

Speaker Change: So, full year on a full year basis, we do still expect profit growth and margin expansion compared to full year 2024

Speaker Change: Okay, good. That's kind of where I was going. Okay, thank you for that. And then just my only second question was for Wesau. It seems like you're still raising capital, but you mentioned the dispositions like for the full year.

Speaker Change: Do you anticipate just putting aside marks maybe like AUM net up down sideways? Like how should we think about that?

Sal: Yeah, so first just to contextualize what's going on in the first quarter for LaSalle for this year. It's really the culmination of over two years of a stalled and depressed capital raising and investment environment where we had the muted transaction fees, we had lower AUM.

Sal: With dispositions exceeding new investment and virtually no incentives. I do want to call out that particularly for the first quarter We had sold some larger deals at the end of last year Where we were harvesting returns for our clients, generate some incentives for us. [inaudible]

Sal: But then we have not yet redeployed capital into new acquisitions to increase the EUM.

Sal: We believe the valuation pressures are largely through and we're seeing some slight uptick in certain products as it relates to valuation pressure and advisory fees we think are through that. And then we do expect to continue to have new investments over the course of the year because we do have a meaningful amount of dry powder in addition to the new capital we're raising right now, which is just a matter of the length of time it takes to invest that capital and have that flow through to advisory fees. And so that's the end of the year.

The momentum is building now and picked up again.

Sal: and if you look at our capital raising for the first quarter of 2025, relative to 2024, it was 1.9 billion of all, it took 500 million a year ago.

Sal: in our historical capital-raising numbers for an annual basis were right $6, $7, $8,000,000, so we're hoping to continue that going forward.

Okay, thank you.

Speaker Change: Thank you. Our next question is from the line of Stephen Sheldon with William Blair. Your line is live Thank you.

Speaker Change: Hi, team, you have Pat McLean today. Thank you for taking my questions and great results this quarter.

Speaker Change: My first question is in the leasing business, you noted some accelerating momentum and industrial and obviously seeing that it's now exceeded 2019 levels. So I wanted to ask how much more runway do you think there is for this type of growth in those end markets and how much of that is macro dependent?

Speaker Change: Yeah, thanks for the question. I'll talk a little bit about first office and then industrial.

Speaker Change: to again contextualize what's happening in the market broadly. We've been talking about good momentum in office and that did continue in the first quarter. Over the past 12 months, the U.S. Office leasing market has returned to 90% of pre-pandemic levels nationally. So, that recovery is continuing. We were really pleased in that context that our first quarter

Speaker Change: Office revenue was higher than the first quarter 2019 level, so really encouraged by what our teams have been able to accomplish and how we've been growing market share over that time. Another important metric we look at is a number of large least transactions which continue to improve in the quarter, although they're still well below pre-pandemic levels. [inaudible]

So...

Speaker Change: The stat-off quote will reference deals over 100,000 square feet in the US office market. They were up 29% year over year in the first quarter, but still are below 30%.

30% below pre-pandemic levels [inaudible]

That's continues to decline.

Speaker Change: And ten and two acid-on-lease explorations and reduce their footprints in the quarter, reduce them by about 7% on average and that compares to a 10% roughly 10% reduction a year earlier and more closer to 15% kind of in years prior to that. So again, those the momentum is all there.

We are watching carefully.

Speaker Change: What is happening with the macroeconomic and policy shifts and how that might impact decision-making? We've not yet seen it come through for office decisions, but we'll continue to watch closely. But the backdrop is that the market overall is in a healthy position. It's just a matter in the pipelines or healthy. It's just a matter of designing decision making get pushed out, particularly as you think through second quarter and people digesting the various news that's coming through each day.

Speaker Change: 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Often surprising to them [inaudible]

Speaker Change: And on the industrial side, there is a different story. We were...

Speaker Change: Already in a place of more relative softness for the market overall with declining volumes as

Speaker Change: Space was digested and people had taken down significant amounts of space and so that activity continued to fall.

Speaker Change: We were pleased there that even though the overall market declined, for example, on the US, the market was 20% lower compared to the prior year quarter.

We had 14% growth in industrial revenue.

Speaker Change: in the US. So what we're seeing there is people are definitely pausing on decision-making for long-term. They're much more focused on shorter-term decision-making, looking around how they can take flexible decisions, not make long-term commitment. So what we're seeing there is a lot more focused on decision-making for long-term decision-making for long-term decision-making for long-term decision-making for long-term decision-making.

Speaker Change: because any more significant shifts in supply chains and distribution will, right, is more of a three to five year horizon while they have to consider new investment more broadly. So two different stories really in terms of what we're seeing come through, but, you know,

That kind of key high little summary there [inaudible]

Speaker Change: Okay, thanks for all the color there, Karen. And my second question, your research group has put some interesting content out on the data center and market. And I know you've expanded your capabilities there on the project and property management side, but my question is, are you participating meaningfully there from a capital markets?

Speaker Change: and or the same perspective, and if so, is there any way you can frame that for us?

Karen: Sure. Yeah, we're certainly participating in the data center space kind of across the life cycle of what investors and occupiers need from us.

Speaker Change: I would say there's a lot of discussion around it and what's a rapidly growing area of our business that's going to happen.

Speaker Change: But there's limited stock for data centers trading today, and so it generally is a smaller part of our business overall as a percentage of fee revenue, but it's small but rapidly growing. And it's something we'll continue to focus on and continue to build out our teams as we see the market opportunities continue to develop.

Okay. Thank you.

Thanks for your questions.

Speaker Change: Our next question comes from a line of Julian Ballon with Goldman Sachs, your Linus life.

Julian Bowlin: Thank you for taking my question and congrats on the quarter. Karen, you talked a little bit about your continuing interest in M&A.

Julian Bowlin: I guess when we think about that, are you looking more at surgical tuck-in acquisitions?

Julian Bowlin: Just on the resilient side, or would you be open to looking at sort of larger CRE services platforms, which maybe also includes some transactional businesses?

Julian Bowlin: And I guess how do we frame that interest in M&A within the current context of sort of a more uncertain macro?

Julian Bowlin: I take that question. Listen, first and foremost, we analyze any potential M&A opportunity

What are their small or large? Strategicly we are…

Julian Bowlin: very focused in growing our resiliency and also the resilience of our...

Julian Bowlin: P&L. And so any kind of business which helps there is favored over and above anything else, specifically on borders here, e-services. It's very hard to make that work because

Julian Bowlin: You win and you lose at the same time when you do those type of acquisitions and so that is probably not in the focus. So it's regards to the overall environment we are in. We ended this environment with a super strong balance sheet and so we are well prepared to take.

Julian Bowlin: Any advantages from the environment which potentially come up? And so we see this environment as more as an opportunity for us to do something to try to shareholder value than the opposite.

Thank you for joining us. Thank you. Thank you.

Thank you, Christian. And maybe for as my second question and I'm

Can you or earlier speaking about the slow?

sort of the delays in decision-making from industrial.

Julian Bowlin: I guess could the same, does the same apply on the transaction side are you seeing a meaningful, sort of pull back in decision making on the investment sales side?

Julian Bowlin: and also how data-dependent do you find that your customers on the capital market side are?

Julian Bowlin: closely tracking the hard macro data, and if they see a sign of deterioration, will that be their cue for pulling back?

Julian Bowlin: Let me first start by going to the data that we track around the deals that we're marketing globally and the bidding activity around them because that's pretty instructive in terms of what we're seeing and how the market's developing in the current context.

So, we reference our bidding intensity index .

Julian Bowlin: which is, right, holding steady, broadly speaking, but if you look, if we kind of unpack the data underneath it, there's some different components that are interesting and important to watch.

Julian Bowlin: So overall, we track the number of bids, which is holding study. We track the bid F-bred for the winning bid, which is also demonstrating stability.

Julian Bowlin: And then we also look at the variability of bids that have overall received for the deal and that variability is expanding and what we're seeing there is that different buyers are taking different approaches to their underwriting assumptions considering a macro environment. [inaudible]

Julian Bowlin: and there are many different areas sometimes around growth expectations, how much they can grow NLI, what are the impacts on CAPEX requirements, how do they think feel that interest cost?

Julian Bowlin: etc. And so that's all going in there. So we're watching it carefully. There's again, we have healthy paplines for seeing activity, but it's not...

There's not meaningful [inaudible]

Julian Bowlin: movements and those underlying metrics other than the kind of variability in the bids. The other important thing we're seeing and we referenced is that there's really strong activity certainly in the debt markets.

as you saw from our own. [inaudible]

Julian Bowlin: Revenue Generation in the first quarter, but then also Brawlis, we look out the number and type of lenders that are out there. It still is a very wide spectrum and the markets overall are healthy. So having...

Julian Bowlin: Healthy Lending Markets is important to the transactions to continue on and give the investors confidence and so we are seeing that as well.

Thank you for your questions.

Speaker Change: Ladies and gentlemen, once again, if you would like to ask a question today, it is star followed by the number one on your touch tone keypad. Our next question is from the line of Jade Rahmani with KBW, your line is wise.

Thank you very much.

Jade Rahmani: Beyond the bidding intensity index, are there any indications signaling a pullback or pause? And are there any geographic trends that stand out at this point, wondering if you're seeing any weakness in APAC or anything that stands out to you?

Jade Rahmani: Well, obviously when that whole debate was getting a bit heated around terrors, we saw some hesitation shipping in on people closing transactions.

Jade Rahmani: But when we look at the data now for the first quarter, and also what we see in April , people have gotten used to it very quickly, and the declining interest rates are obviously helping here.

Jade Rahmani: which regards to the geographic situation. We have seen a real strength in the US, really super strong in the first quarter.

Jade Rahmani: But we always have to keep in mind we are coming, we are still very early in the cycle of recovery. And so you have to put that always into context. But in APAC, we see a strong environment in Japan, Korea and Australia.

Jade Rahmani: One of the most latest trends we are seeing with regards to

Capra Raising is that we see now...

Jade Rahmani: Some Asian investors redirecting capital which was originally defined for the US going now back.

David

Thank you. And beyond the current uncertainty.

Speaker Change: The back half of 2024 had some extremely strong growth rates in revenue, particularly leasing and capital markets. Know is it reasonable to expect more like single-digit growth rates in those businesses in the back half considering the tough comps?

Speaker Change: Well, so there's two things that play that we're really going to be watching. One is certainly as you call out, we had, you know, a really strong second half of the year, so we'll be laughing tougher comps. And then we'll need to, as we've called out, really understand what, what happened in the market and how things develop over the course of the year.

Speaker Change: Two soon to call exactly what will happen. So I'd say overall the moderation of rates

Speaker Change: But it depends how the macro evolves, and we've reiterated our, our, uh, Adjusted EBITDA target for the range for the year, and up in that context of that help to think about, and of how we're seeing the year develop.

and Scott Einberger. Thank you.

Thank you very much [inaudible]

Speaker Change: Thank you for your question. Our next question comes from the line of Seth Berghay with City.

Your Linus Life

Seth Berge: Hi, thanks for taking my question. I just wanted to go back to kind of what you're seeing in the office market. You know, within the US, are you seeing any differences between geographies, West Coast versus East Coast or tenant-sized requirements?

Yes, we are seeing some differences.

Seth Berge: We're actually seeing the West Coast to be performing quite strongly overall. The Gateway cities as a batch have been.

Seth Berge: A bit next in terms of strength in some, like New York continues to power through, where others like Washington DC is obviously struggling some more, when we look to the secondary and tertiary markets, they broadly kind of work through some of their supply constraints for the supply, access supply for the, that's building and so we're seeing.

Seth Berge: differences across markets, but there are enough key markets that are really generating some strong momentum.

Speaker Change: Great. And then, you know, kind of as you think about...

Speaker Change: You know the macro in certain videos there's been any change in kind of hiring plans you

Speaker Change: Business line geographies will vary and so what we do is we tell our hiring plans to what is happening out there. Certainly when we have reasons to say let's watch and wait and see and we listen to our clients and are just looking to an uncertain environment will be a bit more cautious than we would if everything was cranking forward and there were no signs for caution on the horizon. Let's listen to our clients and are just looking to an uncertain environment will be a bit more cautious than we would if everything was going to be okay.

Speaker Change: Producers in place to capture the growth and our advising our clients through challenging times. And so we'll continue to strategically add in areas, whether it's, again, geographies or property types where we see growth ahead, but we feel like we're in a good position overall.

[inaudible]

Thanks

Speaker Change: Thank you for your questions and ladies and gentlemen, that will conclude our Q&A portion for today's call I would like to turn it back over to Christian for any closing comments Thank you very much.

Speaker Change: Thank you operator. With no further questions we will close today's call on behalf of the entire JLL team. We thank you all for participating on the call today. We look forward to speaking with you again following the second corner. [inaudible]

Anthony Paolone, John