The Real Deal Chicago

JLL credits rise of co-working, new proptech investments for big Q4 revenue boost

The real estate services giant posted big gains in leasing revenue and net income over its 2017 numbers
By Alex Nitkin | February 12, 2019 03:00PM

JLL CEO Christian Ulbrich (Credit: iStock)

JLL CEO Christian Ulbrich credited his firm’s growing focus on co-working and real estate technology investments for $4.9 billion in reported revenue in the fourth quarter, a 13 percent increase year over year.

The boost was driven in part by a 25 percent year-over-year increase in global leasing revenue for the Chicago-based real estate services giant, with a 34 percent spike in the Americas alone, Ulbrich said during an earnings call Tuesday.

Shares in JLL rose nearly 16 percent on the news, topping $170 per share for the first time since August.

“I can say for us that the flex-based [co-working] companies … have become an important client base for us, and so quite a significant proportion of that additional growth is coming from them,” Ulbrich said.

JLL has publicly predicted co-working spaces will make up 30 percent of corporate portfolios by 2030, as companies like WeWork and Knotel race for market dominance.

Ulbrich added Tuesday that JLL’s “high market share” in the rapidly-growing real estate tech sector was “another part of our growth.”

The firm capitalized on both factors at once last month when it announced its venture capital wing, JLL Spark, led a $5.2 million funding round for London-based office booking platform Hubble.

JLL Spark lined up seed or series-A investments in 10 different startups since June, when it announced it would devote $100 million to staying ahead of the exploding real estate technology sector. The fund also invested in real estate venture capital firms Metaprop and Navitas Capital as a limited partner.

JLL counted $276 million in net income last quarter, up from $208 million one year earlier. Its 2018 income was $563 million, compared to $426 million during 2017.

JLL is valued at $6.67 billion, second only to CBRE’s $15.9 billion market cap. Chicago-based Cushman & Wakefield is third, with a $3.6 billion valuation in the wake of its initial public offering last year.