JLL, the world's second-biggest commercial real estate brokerage, posted higher quarterly revenue as gains in property management and other services helped offset declines in property sales, leasing and financing.

The Chicago-based firm's fourth-quarter revenue rose 4% to $5.88 billion from the same time in 2022, exceeding Wall Street’s consensus projection of $5.79 billion. Profit fell about 1% to $172.4 million.

While leasing fee revenue in the fourth quarter slid 5% as some businesses, especially office tenants, maintained a cautious approach toward signing deals, JLL said there are signs of stabilizing demand.

"There has been a growing number of bidders entering the market since late 2023," JLL CEO Christian Ulbrich said during an earnings call on Tuesday. He added that “similar to investment sales, large office lease transactions are starting to return to the market, but have not come back in a meaningful way yet.”

Industrywide, he said, total global leasing volume increased 4% in the quarter from the prior-year period, including a nearly double-digit jump in the United States, as companies made progress on their return-to-office initiatives,

The brokerage joined CBRE, Colliers, Cushman, Marcus & Millichap and Newmark in pointing to signs of a recovery emerging later this year, with Ulbrich calling 2024 "a year of transition for the commercial real estate market."

The company’s revenue for the full year slid slightly to $20.76 billion from $20.86 billion in 2022, driven by a 28% decline in revenue from capital markets and an 11% drop in leasing revenue for the year.

JLL, the last major commercial real estate brokerage to report results, said net income for the full year dropped 64% to $225.4 million from 2022.

Revenue for JLL’s more resilient businesses that are not tied to real estate transactions — such as property management and global consulting — grew a combined 9% in the fourth quarter.

Those increases helped offset declines in brokerage sales, financing and leasing revenue that have affected the real estate industry over the past year. Global real estate investment declined 24% year over year in the fourth quarter to $166 billion, according to JLL Research.

JLL executives said interest rates have hit their peak, and as credit conditions improve, so will commercial real estate deal activity.

Still, "it will take time and prolonged stability for pricing to fully adjust," Ulbrich said.

CFO Karen Brennan echoed this, noting "the timing and pace of acceleration and leasing activity is uncertain." Even so, she said “the contractual nature of leases, limited new office and industrial building starts and our expanding pipeline provides optimism for long-term growth."

JLL has added to its brokerage teams in areas it said will lead the recovery this year, such as multifamily, industrial and data centers, Ulbrich said. The company’s debt platform is also expected to see more activity as a rising number of real estate loans mature in coming months, Ulbrich said.