It came as a surprise to no one. Since November 2022, Jones Lang LaSalle (JLL) had anticipated that it would suffer the consequences of a recessionary environment in the first quarter of 2023, and indeed the global commercial real estate services giant recorded a quarter-over-quarter and year-over-year decline in earnings. The firm’s first quarter revenue totaled $4.7 billion, marking a 2 percent drop from the first three months of 2022. Fee revenue went on the downswing as well, dropping 17 percent year-over-year to roughly $1.6 billion.
JLL’s low earnings result is the tale of two business segments. The firm’s Capital Markets and Markets Advisory segments were the source of the company’s revenue loss. JLL points to the rising cost of financing and increasingly stringent lending guidelines for wreaking havoc on the transaction market, leading to the 39 percent year-over-year drop in both revenue and fee revenue in its Capital Markets business. Macroeconomic uncertainty had a dampening effect as well.
As for the firm’s Markets Advisory segment, year-over-year revenue and fee revenue dropped 7 percent and 14 percent, respectively. Markets Advisory is a multi-faceted segment, so in spite of the overall decline, the business line did see some successes. While lower transaction volumes and a drop in average deal size produced a 19 percent decrease in leasing fee revenue, on the upside, expansion of the firm’s portfolio in the Americas played a role in the 7 percent growth in property management fee revenue.
Overall revenue decline notwithstanding, JLL did not suffer losses across the
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