Jones Lang LaSalle Earnings: Capital Markets and Leasing Impacted by Slowdown, Outsourcing Resilient

Narrow-moat-rated Jones Lang LaSalle’s third-quarter results were middling as the capital markets and leasing businesses were impacted by the industrywide slowdown but the outsourcing business remained strong. The company reported that global investment sales were down 48% during the third quarter, with the Americas down 51%, EMEA down 51%, and Asia-Pacific down 24%. The decline in investment sales was broad-based and impacted all sectors, but multifamily and offices were impacted the highest. Global office leasing volumes were also down 6% in the third quarter compared with the third quarter of 2022. In the industrial sector, gross leasing volumes in the U.S. and EMEA were down significantly on a year-over-year basis and were also below the five-year historical average. Industrial net absorption in the Asia-Pacific region remained strong and was considerably above the five-year historical average. We think that the pressure on the brokerage business will continue in the near term given our macroeconomic outlook and rising interest rates.