JONES LANG LASALLE INC Annual Report - Fiscal Year Ended December 31, 2025

This summary offers a clear look at JONES LANG LASALLE INC's (JLL) performance and financial health for the fiscal year ended December 31, 2025.

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Executive Summary

JLL, a global leader in commercial real estate services, navigated a mixed market in 2025. While its core Real Estate Management Services grew strongly, segments tied to transactional activity, such as Capital Markets and Leasing Advisory, faced significant challenges. Overall revenue declined slightly, and profitability, though still solid, reflected these market pressures. The company maintained a stable long-term debt profile but increased its reliance on short-term borrowing to manage cash flow in a dynamic market.

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1. Business Overview

JLL provides a comprehensive range of real estate services to businesses and investors worldwide. The company's operations span several key segments:

• Real Estate Management Services: This segment, which includes property and facilities management, continued its strong growth. Revenue reached $5.97 billion in 2025, up from $5.78 billion in 2024 and $5.60 billion in 2023.

  • Workplace Management: Grew to $3.31 billion in 2025 (from $3.20 billion in 2024).
  • Project Management: Increased slightly to $1.97 billion in 2025 (from $1.96 billion in 2024).
  • This consistent growth highlights the resilient, recurring nature of these services, providing a stable foundation for JLL.

• Leasing Advisory: This segment, which helps clients lease properties, experienced a slight contraction. Revenue was $2.23 billion in 2025, down from $2.31 billion in 2024 and $2.30 billion in 2023. This dip suggests a softer commercial leasing market.

• Capital Markets Services: This segment, which includes property sales, debt, and equity advisory, faced the most significant challenges. Revenue declined to $1.32 billion in 2025, a notable decrease from $1.52 billion in 2024 and $1.73 billion in 2023.

  • Investment Sales, Debt & Equity Advisory: This sub-segment specifically generated $0.60 billion in 2025, down from $0.62 billion in 2024 and $0.70 billion in 2023.
  • This decline is likely due to higher interest rates and economic uncertainty, which have slowed real estate transaction volumes and investor confidence.

• LaSalle Investment Management: JLL's investment management arm remained stable, generating $0.53 billion in 2025, consistent with prior years. This segment provides a steady revenue stream from managing real estate investments for institutional clients.

• Proptech Investments: This segment, representing JLL's strategic investments in real estate technology, contributed $0.06 billion in 2025, maintaining a consistent level. While a smaller revenue contributor, these investments are crucial for future innovation and competitive advantage.

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2. Financial Performance

JLL's total revenue for 2025 reached $12.02 billion, slightly down from $12.44 billion in 2024 and $12.17 billion in 2023. This overall trend shows that strong performance in management services was partially offset by declines in transactional businesses.

Key Financial Metrics:

• Total Revenue: $12.02 billion (down from $12.44 billion in 2024)

Operating Expenses:

• Stock Compensation Plan: Costs increased to $113 million in 2025 (from $108 million in 2024), indicating JLL's continued reliance on equity-based incentives for employees and executives.
• Employee Severance Costs: $11 million in 2025 (compared to $10 million in 2024), possibly signaling ongoing workforce adjustments or restructuring efforts to streamline operations.
• Contract Termination and Other Charges: Decreased to $10 million in 2025 (from $11 million in 2024), suggesting a reduction in certain operational wind-down costs.

The revenue trends suggest that overall profitability likely felt pressure from the slowdown in higher-margin Capital Markets activities.

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3. Management's Discussion and Analysis (MD&A) Highlights

Key Operational Highlights: Wins and Challenges

Wins:

• Resilient Real Estate Management Growth: The consistent expansion of JLL's property and workplace management services demonstrates strong demand for these essential, often recurring, services. This segment acts as a crucial buffer during market downturns.
• Strategic Technology Investments: Continued investment in Proptech positions JLL for long-term innovation and efficiency gains in the evolving real estate landscape.

Challenges:

• Significant Headwinds in Transactional Markets: The substantial decline in Capital Markets and the dip in Leasing Advisory revenue highlight how sensitive these segments are to macroeconomic factors like interest rates, inflation, and investor sentiment. A prolonged downturn in these areas could impact overall profitability.
• Increased Short-Term Borrowing: The notable increase in commercial paper and line of credit usage suggests a greater need for short-term liquidity or working capital, potentially leading to higher interest expenses if rates remain elevated.

Market Trends and Regulatory Changes Affecting JLL:

Several market trends are influencing JLL's business:

• Hybrid Work Models: The ongoing evolution of hybrid work continues to impact demand for office space, affecting leasing and property management strategies.
• Sustainability and ESG: Increasing client demand for sustainable and energy-efficient buildings, along with stricter environmental regulations, fuels JLL's advisory and management services for ESG compliance.
• Digital Transformation: The broader trend of digitalization in real estate, including data analytics and AI, reshapes how properties are managed, transacted, and valued, underscoring the importance of JLL's Proptech investments.
• Interest Rate Environment: The current higher interest rate environment directly affects borrowing costs for real estate investors and developers, greatly influencing transaction volumes and property valuations.

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4. Financial Health

JLL's financial health reveals stable long-term debt but increased reliance on short-term financing in 2025.

• Short-Term Debt:

  • Commercial Paper: Increased significantly to $30 million at year-end 2025 (from $0 in 2024).
  • Line of Credit: $10 million drawn at year-end 2025 (from $0 in 2024).
  • This surge in short-term borrowing suggests JLL may have needed to boost its working capital or manage immediate cash flow needs, possibly due to the slower transactional business.

• Long-Term Debt (Senior Notes): JLL's long-term debt profile stayed stable:

  • $500 million due June 2027 (1.96% interest).
  • $500 million due December 2028 (6.875% interest).
  • $500 million due June 2029 (2.21% interest).
  • The varying interest rates reflect market conditions at the time of issuance. The 6.875% notes due in 2028 carry a significantly higher rate, which will affect future interest expenses.

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5. Risk Factors

Based on JLL's business model and recent performance, key risks include:

• Economic Downturn and Interest Rate Fluctuations: The Capital Markets segment shows that JLL's transactional businesses are very sensitive to economic cycles, interest rate changes, and investor confidence. A sustained period of high interest rates or economic recession could further reduce transaction volumes.
• Real Estate Market Volatility: Changes in property values, vacancy rates, and demand for commercial space across various sectors (office, retail, industrial) directly affect JLL's revenue and profitability.
• Intense Competition: The real estate services industry is highly competitive, with numerous global and regional players. JLL must continuously innovate and differentiate its services to maintain market share.
• Technological Disruption: The rapid evolution of Proptech may disrupt traditional service models, requiring continuous investment and adaptation to remain competitive.
• Geopolitical and Regulatory Risks: Global operations mean JLL faces various geopolitical uncertainties, trade tensions, and regulatory changes in different jurisdictions, potentially affecting business operations and client demand.

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6. Competitive Position

JLL holds a strong competitive position as a leading global real estate services firm, using its extensive global network, diversified service offerings, and strong brand reputation. Its ability to provide integrated services across the entire real estate lifecycle, from management to capital markets, sets it apart from more specialized competitors. However, the market remains fragmented and highly competitive, so JLL must continuously invest in talent, technology, and client relationships to maintain and grow its market share.

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7. Future Outlook

JLL's outlook largely depends on the direction of global economic conditions and interest rates. While the Real Estate Management segment is expected to continue its steady performance, a recovery in Capital Markets and Leasing Advisory depends on improved investor confidence and a more favorable interest rate environment. JLL's strategic investments in technology and its diversified service model prepare it to benefit from a market recovery, but near-term performance could still face market volatility.

Strategy:

JLL's strategy focuses on using the stability and growth of its Real Estate Management Services while managing its cyclical transactional businesses. Strategic priorities likely include:

• Diversification and Resilience: Developing resilient, recurring revenue streams to balance out swings in transactional segments.
• Technology and Innovation: Investing in Proptech to improve service delivery, boost efficiency, and create new client solutions.
• Operational Efficiency: Managing costs and streamlining operations (as severance costs suggest) to maintain profitability in a challenging market.
• Global Market Leadership: Keeping and growing its global presence and integrated service offerings to serve multinational clients.