JLL profits halved by pandemic

EBITDA fell 54 percent as leases dried up

National /
Aug.August 06, 2020 12:38 PM
JLL CEO Christian Ulbrich (Ulbrich by Jemal Countess/Getty Images for Women's Forum of New York)

JLL CEO Christian Ulbrich (Ulbrich by Jemal Countess/Getty Images for Women’s Forum of New York)

JLL’s profitability fell by more than half during the second quarter as fees from brokering office leases around the world slowed to a trickle.

JLL, the second-biggest real estate services firm in the world, saw a 54 percent reduction in earnings before interest, taxes, depreciation and amortization to $103 million during the second quarter compared to the same time last year, according to the firm’s latest financial results.

Company CEO Christian Ulbrich said during the firm’s second-quarter earnings call Thursday morning that companies were signing fewer leases – and deals that were getting done had shorter terms.

He said the terms of leases signed during the first half of the year were down roughly 16 percent, leading to less revenue for the company.

Ulbrich added, however, that the wait-and-see mentality many firms were in during the early stages of the pandemic is starting to shift as companies realize that the recovery will be prolonged.

“Business is coming to terms that this is the environment we will be in for the foreseeable future” he said.

Leasing fees during the second quarter were down 43 percent on the year to roughly $359 million.

Much uncertainty remains over how office markets around the world will respond to the coronavirus. Many large firms like Facebook, Twitter and Zillow have announced indefinite work-from-home policies – fueling speculation that large companies will have less demand for office space in the future.

Conversely, Facebook earlier this week finalized a much-anticipated lease in Manhattan for 730,000 square feet, a move seen as a vote of confidence in the value of a large urban office.

Contact Rich Bockmann at [email protected] or 908-415-5229.


Related Articles

arrow_forward_ios
Clockwise from top left: 162 West 13th Street, 325 Avenue Y in Brooklyn, 1281 Viele Avenue in the Bronx (Credit: Google Maps)
Here’s what the $10M-$30M NYC investment sales market looked like last week
Here’s what the $10M-$30M NYC investment sales market looked like last week
(iStock/Illustration by Kevin Rebong for The Real Deal)
To boost economy, NYC will invest in rapid Covid test
To boost economy, NYC will invest in rapid Covid test
Auckland, New Zealand and Shenzhen, China (iStock)
Global luxury home sale prices nudged up in 2020
Global luxury home sale prices nudged up in 2020
Canada, South Korea, Germany, Singapore, and the UK top the list of countries investing in real estate. (Getty)
South Korea now No. 2 foreign investor in US CRE
South Korea now No. 2 foreign investor in US CRE
(iStock/Illustration by Alexis Manrodt for The Real Deal)
Manhattan job losses in Q3 worst of any large county in the US
Manhattan job losses in Q3 worst of any large county in the US
R&B Realty's Aron Rosenberg and Maverick's David Aviram of Maverick with 28 West 36th Street and 32 West 39th Street (Google Maps)
Midtown landlord sues to stop foreclosure by Maverick
Midtown landlord sues to stop foreclosure by Maverick
HSBC COO John Hinshaw (Getty, iStock)
HSBC to shrink its office footprint amid shift to WFH
HSBC to shrink its office footprint amid shift to WFH
New Yorkers can enjoy going to the movies again on March 5. (iStock)
Showtime: NYC movie theaters to reopen
Showtime: NYC movie theaters to reopen
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...