Please ensure Javascript is enabled for purposes of website accessibility

Jones Lang LaSalle Reports a Bumper Quarter

By Lee Samaha - Updated Feb 9, 2018 at 2:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The commercial property sector had a strong end to 2017, and sentiment remains positive.

Earnings reports from commercial property services company Jones Lang LaSalle (JLL -0.20%) are always an interesting affair, not least because the company doesn't give formal guidance, and thus the results can create a lot of volatility in the stock. JLL's recently reported fourth quarter was a strong one, and the company is entering its fiscal 2018 with a lot of momentum. Let's take a closer look at the earnings report.

Jones Lang LaSalle fourth-quarter earnings: The raw numbers

Focusing on the headline numbers from the quarter:

  • Fee revenue grew 18% to $2.18 billion.
  • Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 26% to $360 million.

In the first half of 2017, Jones Lang LaSalle saw a combination of double-digit revenue increases and declines in adjusted EBITDA, but in the the second, double-digit revenue growth fell through into strong growth in EBITDA. The chart below shows the progression through the year.

fee revenue and adjusted EBITDA

Data source: Jones Lang LaSalle.

In case you're wondering why the second half was so much better than the first, it's due to a combination of reasons. They include investments in data and technology intended to support future growth; lower incentive fees at Jones Land LaSalle's real estate investment company, LaSalle Investment Management; and margin dilution due to integrating acquisitions.

Commercial property in Hong Kong

Jones Lang LaSalle will be hoping for a strong commercial property market in 2018. Image source: Getty Images.

What happened in the quarter?

Jones Lang LaSalle's revenues are global and are split between real estate services (RES) and LaSalle, so it's always useful to break out revenue and adjusted EBITDA by business segment. As you can see below, the laggard in the quarter was Europe, but that was largely due to the dilutive effects of the acquisition of Integral (a U.K.-based mechanical and electrical property maintenance company) and the associated integration costs and investments.


Fee Revenue


Adjusted EBITDA


RES Americas

$992.9 million


$175.2 million


RES Europe, Middle East, Africa

$669.6 million


$84.1 million


RES Asia Pacific

$424 million


$75.7 million


LaSalle Investment Management

$92.2 million


$25.2 million



$2.179 billion


$360 million


Data source: Jones Lang LaSalle presentations. *Change in local currency.

What management said

On the earnings call, CEO Christian Ulbrich said that it was a "very positive year for commercial real estate and for JLL," and that "we believe these conditions will continue into 2018."

He went on to state that he'd "never experienced such a broad-based optimism" regarding the economy and business leaders' confidence. Ulbrich spoke of a "massive urgency" among clients for closing deals in December -- something that pulled deals forward from the first quarter of 2018.

It's difficult to attribute a one-month uptick in business to any particular reason, but Ulbrich speculated that it could come down to businesses anticipating stronger growth prospects going forward as a result of tax reform in the U.S.

Looking ahead

The question for the commercial real estate market and Jones Lang LaSalle in 2018 is whether the positive impact of stronger economic growth could be offset by the possibility that rising interest rates will make it more expensive to fund deals. Ulbrich still thinks that the "absolute level of interest rates" is low on a historical basis and that "real estate is still a super attractive" investment class. Provided businesses and investors feel the same, Jones Lang LaSalle can have another strong year.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Jones Lang LaSalle Incorporated Stock Quote
Jones Lang LaSalle Incorporated
$180.81 (-0.20%) $0.35

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.