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.