JLL posted a profit fueled by rebounding office leasing and property sales. Executives predicted steady transaction growth in 2025 despite industrywide economic and geopolitical uncertainty.
The Chicago-based commercial real estate brokerage posted a 40% profit increase to $241.2 million as office leasing, property sales and other transaction revenue grew by double-digit levels from the year-earlier period.
JLL joined CBRE, Colliers International, Newmark Group and Marcus & Millichap in posting higher-than-expected quarterly earnings as office leasing and property sales surged in the final months of last year and into 2025.
Heightened deal activity, including an increase in larger office and industrial transaction sizes that drove an 11% increase in overall leasing revenue, helped fuel a higher-than-expected 16% jump in revenue to $6.8 billion in the fourth quarter from the prior-year period.
"Globally, office leasing was at its highest level since 2019," CFO Karen Brennan told investors in a conference call on Wednesday. "It’s still below the 2019 levels, but that’s quite encouraging as we think about all that’s transpired since 2020. We are optimistic for a continued pickup in transaction activity, though the pace may be uneven and nuanced across geographies."
Large transactions where JLL, the world's second-largest commercial real estate brokerage by revenue after CBRE, historically has held a greater share of the market increased across nearly all asset classes, though larger deals remain well below pre-pandemic averages, Brennan said.
“Our leasing business is benefiting from the increasing return-to-office mandate and due to the very low development pipeline, rents will continue to grow," CEO Christian Ulbrich told investors.
Stabilizing interest rates last fall and a growing amount of capital ready to be deployed by property investors also contributed to a 35% increase in JLL's investment sales revenue in the quarter, Brennan stated.
Executives with JLL are encouraged by strengthening in the real estate debt market as banks close more loans in the United States, she added.
JLL also joined its brokerage rivals in warning that concerns about the trajectory of interest rates and the potential effects of new economic policies could impact real estate decisions.
"On the one hand, we see some very strong dynamics for the real estate industry and we are probably at the beginning of a longer term up-bring cycle," Ulbrich said. "But on the other hand, the geopolitical environment, the trade environment is bringing a bit of uncertainty."
While a recent uptick in business sentiment in the United States late last year provides optimism for leasing growth this year, "possible headwinds from geopolitical developments may impact decision making,” Brennan added.
Looking ahead, JLL sees more growth in tenant demand, especially for higher-quality assets across most property types, Brennan said.
JLL is targeting adjusted earnings before interest, taxes, depreciation and amortization of between $1.25 billion and $1.45 billion for 2025.
The midpoint of that forecast would represent 14% growth from last year, driven by an increase in deal activity, along with expansion in JLL's recurring revenue and technology segments, Brennan said.