Jones Lang LaSalle Incorporated Aktie

Hello, everyone. Thank you for joining us, and welcome to the Second Quarter 2026 Earnings Conference Call for Jones Lang LaSalle Incorporated.

[Operator Instructions]

I will now hand the conference over to Sean Coghlan, Head of Investor Relations. Sean, please go ahead.

Thank you, and good morning. Welcome to the Second Quarter 2026 earnings conference call for Jones Lang LaSalle Incorporated. Earlier this morning, we issued our earnings release, along with the slide presentation and Excel file intended to supplement our prepared remarks. These materials are available on the Investor Relations section of our website. Please visit ir.jll.com. During the call as well as in our slide presentation and supplemental Excel file, we reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures to GAAP in our earnings release and slide presentation. We also reference resilient and advisory revenues, which we defined in the footnotes of our earnings release.

As a reminder, today's call is being webcast live and recorded. A transcript and recording of this conference call will be posted to our website. Any statements made about future results and performance, plans, expectations and objectives are forward-looking statements. Actual results and performance may differ from those forward-looking statements as a result of factors discussed in our annual report on Form 10-K and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statements. Finally, a reminder that percentage variances are against the prior year period in local currency, unless otherwise noted.

I will now turn the call over to Christian Ulbrich, our President and Chief Executive Officer, for opening remarks.

Thank you, Sean. Hello, and welcome to our second quarter 2026 earnings call. Q2 was a big quarter for JLL. We grew revenue by double digits and profit gains accelerated with adjusted EBITDA up 33% and adjusted earnings per share up 61%. At our investor briefing in March, we told you why we felt good about where JLL was headed, and this quarter is a proof of that. We are now a few months into Accelerate 2030, and I'm pleased with how the strategy is taking hold across the organization.

I want to spend my time today on 3 parts of our business that give me continued conviction in our future: First, our resilient business lines, which represent nearly 80% of our revenue are built for consistent growth and margin expansion. Multiyear client relationships, recurring revenue and a business model amplified by scale. That was evident again this quarter with real estate management services growing 8%, in line with the level of growth we have delivered over recent quarters while margin expansion also continued.

These businesses sit at the center of long-term secular tailwinds in the global economy as occupiers and investors increasingly choose to outsource more parts of their real estate operations rather than running it themselves. Within workplace management, most corporate real estate globally is still managed in-house today, underscoring how much runway remains. Project management sits at the intersection of our clients' evolving needs from multisite project management to capital planning to new development and our ability to execute that work end-to-end around the world. The longer we work with a client, the deeper we understand their current portfolio and strategic priorities and the more value we can create together through a One JLL approach.

Our resilient businesses show what doable organic growth looks like in real estate services, high client retention, deeper enterprise relationships and a platform that becomes more efficient and resilient as it scales. We firmly believe continued investment in data and AI will make these businesses even more scalable and valuable to our clients.

Second, across our advisory businesses, the U.S. led a broad-based pickup in activity across leasing advisory and capital market services. Together, our advisory revenue growth accelerated to 21% this quarter and profit grew even faster, a reflection of the operating leverage building across our platform. Our performance in our advisory businesses reflects client trust built over years in our people, data and ability to execute at scale. That is why JLL has continued to take share over the past several years.

Clients are choosing and expanding their relationship with JLL because we deliver intelligence and outcomes that are difficult to replicate. Our brand signals to the world's most sophisticated investors and occupiers that we are the partner for the most complex work. The investments we are making in data AI and our core businesses under Accelerate 2030 are designed to deepen our value proposition.

None of this happens in isolation. Clients want an integrated partner who can advise them across the full real estate life cycle, backed by the intelligence of our entire firm. That is One JLL. It is the reason leading investors and occupiers are choosing to deepen their relationships with JLL. Third, when it comes to capital allocation, our deployment decisions are being made with rigor. Top line growth is most valuable to us if it converts into profitability, cash generation and returns that justify the investment behind it.

This quarter alone, we generated $438 million of free cash flow, up 52% from a year ago. That gives us flexibility in how we deploy capital and reflects healthy margin expansion, greater capital efficiency and improving returns on our investments across the company. We maintain a strong and agile balance sheet and are continuously assessing opportunities, including returning capital to shareholders. Our disciplined and through-cycle approach to capital allocation is central to how we intend to keep building value for our clients, our people and our shareholders over the long term.

Put together, these factors give me high confidence in the outlook for JLL. At our investor briefing in March, we said we have the foundation platform and culture to compound value over the long term. While we are early days in our Accelerate 2030 strategy, the quarterly results and progress on our strategic initiatives, reaffirm my conviction.

With that, I will now turn the call over to Kelly Howe, our Chief Financial Officer, to provide more detail on our results for the quarter.

Thank you, Christian. Our strong second quarter results demonstrate the progress we are making on our key operating initiatives and reflect continued business momentum. Revenue growth of 11% as reported in U.S. dollars and 10% in local currency was almost entirely organic and was led by our advisory businesses, particularly in the U.S. We also continued to generate healthy margin expansion and robust profit growth. The combination of our financial strength and cash generation supported continued capital return to shareholders, which is already nearly double the full year 2025 amount. Looking ahead, we remain encouraged by the breadth of demand we see across our business lines and are well positioned to build on our momentum.

Now a review of our operating performance by segment. The following commentary is in local currency to best reflect underlying operating performance. Beginning with Real Estate Management Services, revenue growth was broad-based across all business lines. The global service capabilities of our workplace management business continue to drive strong revenue growth, led by mandate expansions and complemented by new client wins. Our contract renewal rates and pipelines remain strong. Within Project Management, the increase in revenue was driven by mid-single-digit management fee growth, led by double-digit growth in the Americas, including momentum from data centers. Given a shift in contract mix, higher management fees were moderated by lower growth in pass-through costs.

Following the strong increase in the prior year quarter, project management grew 25% on a 2-year stacked basis inclusive of 3% growth in the current quarter. Client activity remains healthy, positioning us for continued momentum over the near term. For Property Management, core business growth and new wins continue to be offset by the strategic contract exits as mentioned in the past 2 quarters. We expect this growth headwind to largely dissipate over the coming quarters. Considering the varied business line trends within the segment, we affirm our mid- to high single-digit revenue growth target for the full year with our second half weighted to the fourth quarter.

Additionally, we continue to focus on driving incremental platform leverage, which we anticipate outpacing continued investment for growth.

Moving next to Leasing & Advisory. Revenue growth was driven by accelerated momentum across office, industrial and data centers. A meaningful increase in deal size was complemented by healthy volume growth globally, most notably the U.S. and in part due to resurgent demand from the technology sector, including from AI companies. Our global office leasing revenue growth of 20% materially outpaced the 2% increase in market volume. On a 2-year stacked basis, global leasing advisory revenue growth was 28%, inclusive of 24% in the current quarter, reflecting strong ongoing and broadening demand. The increases in lease and advisory adjusted EBITDA and margins were driven by revenue growth, net of higher commission expense from both higher tiers being met sooner compared to a year ago, business mix and incremental platform leverage. We expect the commission tier headwind to moderate as the year progresses.

Looking ahead, occupier demand and market fundamentals continue to strengthen, supported by improving net absorption trends across major markets and near record low new supply. Given the constructive global GDP growth outlook, increasing business confidence and our strong leasing pipeline, we are targeting mid- to high teens revenue growth for the full year as we start to lap higher growth comparables in the fourth quarter. We continue to execute our multiyear strategic investment plan to drive long-term growth with attractive returns.

Shifting to our Capital Market Services segment, rising bid activity and highly liquid credit markets fueled strong growth across sectors and most geographies, led by the U.S., Japan and Australia, which significantly outpaced softness from elongated investment sales timelines in parts of Europe.

Debt advisory revenue led the growth of 44%, while investment sales revenue increased 20% and equity advisory revenue grew 53%. The continuation of robust underlying business momentum amidst the dynamic macro environment is reflected in the 2-year stacked growth rates for debt advisory and investment sales of 71% and 30%, respectively. U.S. investment sales revenue growth of 53% for the quarter was nearly double the broader market, reflecting our talent, platform and data advantages.

Higher revenue, net of increased commissions, lower loan-related expenses versus prior year and continued platform leverage drove the adjusted EBITDA growth and margin expansion in the quarter. Looking ahead, capital markets fundamentals remain healthy overall as global direct investment activity has accelerated and credit markets remain competitive and diverse. Our global investment sales, debt and equity advisory pipeline and conversion rates continue to be strong, most notably in the U.S. For the full year, we are targeting mid-teens revenue growth, mindful of the robust growth comparables in the second half of last year.

Turning to Investment Management, advisory fee growth associated with the ongoing deployment of the $3.7 billion of capital raised over the past year was mostly offset by anticipated decline driven largely by dispositions in Asia Pacific. We continue to target advisory fee growth in the low single digits for the full year as the factors impacting the quarter results are expected to persist in the near term. Additionally, we anticipate incentive and transaction fees towards the lower end of our historical range and weighted to the fourth quarter.

Shifting to free cash flow, balance sheet and capital allocation, free cash flow totaled $438 million in the quarter, up 52% from a year ago. The improvement was primarily attributable to higher cash earnings. Considering the strength of our cash flow to date, business mix and ongoing initiatives to improve capital efficiency, our free cash flow conversion ratio is trending comfortably above our long-term average of over 80% for the full year. Growth in our adjusted EBITDA plus lower borrowings resulted in an improvement in our reported net leverage to 0.7x. Our investment-grade balance sheet remains a source of strength with $3.4 billion of corporate liquidity, providing us with ample flexibility to invest in the business while continuing to return capital to shareholders.

We repurchased $110 million of shares in the quarter, bringing first half repurchases to $410 million and reducing the share count by nearly 3% from a year earlier. Looking ahead, we intend to remain active on the $2.6 billion remaining on our repurchase authorization, with the total annual amount dependent on the broader operating environment, our leverage outlook, valuation and relative returns to other investment opportunities, inclusive of M&A. We are encouraged by the underlying business momentum in the first half of the year and the strength of our pipelines across the business, particularly in the U.S., albeit mindful of the strong growth rates in the back half of last year.

With the segment revenue growth targets I outlined earlier as the basis, we are meaningfully increasing our full year 2026 adjusted EPS target range to $24.60 to $25.90, reflecting 34% growth at the midpoint. We entered the second half of the year with momentum and confidence in our ability to deliver healthy growth, robust margin expansion and meaningful cash flow. Christian, back to you.

Thank you, Kelly. Looking ahead to the second half of the year, our pipelines across the business and broader indicators are encouraging. We expect the U.S. to keep bleeding as capital deployment builds, credit markets remain active and demand for our core services groups. The broader environment globally will likely remain uneven but the strength of our people, platform and client relationships gives us conviction. We have built a very resilient business that can perform through evolving markets with our Accelerate 2030 strategy execution underway, we intend to keep building on the momentum we have generated over the last several quarters.

The updated targets that Kelly just outlined, including higher revenue growth outlooks for our leasing Advisory and Capital Market Services segment and a notable raised adjusted EPS range for the year reflect our confidence in the underlying momentum of our business as well as our strategy.

Before I close, I would like to thank our colleagues around the world for their commitment to our strategy and continued dedication to our clients. Your work is what makes results like this possible. Operator, please explain the Q&A process.

[Operator Instructions]

Your first question comes from the line of Tony Paolone from JPMorgan.

Great. My first question is on the margin side. I mean the significant growth in transactional revenue, obviously, drove a lot of that. But can you maybe help parse out what you think was more company specific to JLL and talk perhaps about the leverage you might continue to see that could help margins even further going forward, just less related to the market and more around JLL?

Sure. Thanks, Tony, for the question. So yes, mix and kind of ongoing EBITDA growth and revenue growth clearly drove a set of the margin expansion. But I would say that in addition to that, we've -- as you know from our investor presentation and briefings, have been very focused on investing against the platform that is providing pretty meaningful operating leverage. And so we're seeing the benefits of that operating leverage come through as well.

And so we look at fixed cost as it relates to our fee revenue. We look at variable costs, including commissions and other variable costs. And we're very happy with the performance of our fixed cost base against our fee revenue as well, and we're seeing a lot of improvement there. We have more runway as well. So we feel very confident we'll be able to continue to deliver on that margin expansion.

Okay. And then my follow-up is just, I guess, related to capital markets, but also investment management. It seems like it's been a slow first half of the year for everybody and raising capital for commercial real estate. Is there a risk that at some point that has implications back to capital markets and just the less robust fundraising just creates less transactional activity going forward? Or is there any way to think about that? Sorry, did my question go through?

Can you please repeat the question? I'll take it.

Yes, sure. Question is basically capital raising for commercial real estate just seems to be running at a slow pace so far this year for everybody. And so wondering if we should think about that as having the implications back to just broader transaction activity going forward if it just remains muted and there's not a lot of new capital perhaps coming into just CRE broadly?

Yes. Thanks for the question. And you've seen our capital raise numbers for our Investment Management business, which are $2.3 billion year-to-date. We are continuing, of course, to focus on capital raise. We do see continued dry powder on the sidelines. There's a lot of pent-up demand, and there is a lot of demand to reposition portfolios. And so we do think that, that demand is going to kind of continue to build. You're right, the first part of the year has been a little bit slower, I think, across the board, across the market. But we expect that demand to flow through.

In the meantime, if you look at our capital markets business, our debt advisory business has been performing quite well because even as transactions are maybe a little bit slower for the first part of the year because of the capital raise, the debt portion of the business is doing very strong.

Your next question comes from the line of Jade Rahmani from KBW.

This is Jason Sabshon on for Jade. To start, what impact do you think the shifting interest rate outlook will have on capital markets pipelines? Do you see any deals moving to the sidelines or potential for repricing in lower cap rate areas like multifamily?

We have -- when we look at the interest rate environment, one of the things that we pay most attention to is stability of rates. And so we can withstand fluctuations up or down a bit without a huge amount of impact. So as we look at the interest rate environment kind of through the rest of the year, we don't expect a meaningful impact to our transaction business for the remainder of the year.

The other thing that I would just say is that. Like I said, there's a lot of pent-up demand on the sidelines and there's a lot of capital. The debt markets are very, very liquid at the moment. And so we don't have huge concerns about kind of the interest rate environment going through the rest of the year.

And do you see any risk of unbundling of services within the outsourcing businesses as a result of it?

Unbundling of services in the outsourcing business?

Yes.

One of the things, as we've articulated for our Accelerate 2030 strategy, is a real focus on targeting and serving clients in a very holistic way. And we're seeing a huge amount of demand for that, honestly. And so when we look at outsourcing, clients are actually coming to us because they don't want to manage individual tasks or individual pieces of the offering. They're looking for somebody that can provide a more integrated offer to them to help them with their outsourcing. And again, we continue to see tailwinds in that space. You can see the healthy growth that we're posting, particularly in our work dynamics -- or sorry, our Facilities Management business and so unbundling has not been a particular trend that we have been observing in the market.

Your next question comes from the line of Julien Blouin from Goldman Sachs.

Congrats on a strong quarter. Christian, I think you mentioned last quarter that you expected that the longer the conflict went on, the worst the impacts would get to the back half of the year. We've definitely seen the performance gap between the U.S. and your other markets sort of widened. Wondering standing to -- where we stand today, how are you feeling about the likely impacts of the Middle East on Asia and Europe in the back half?

So Julien, Christian is having some trouble with his line. So we spent a lot of time talking about that from this side. I can address many of the conversations that we've had amongst our leadership team here, which is, obviously, we continue to monitor the conflict quite carefully. I think the biggest impact associated with the conflict is on the broader macro outlook, both GDP growth and inflation. We're not seeing immediate and direct impact to our business in a material way today.

I think you have touched on the fact that in Europe, I think there is maybe a bit more concern. And so we have seen, as we noted in our remarks, a bit of elongation around transactions on the capital market side in Europe. Again, we're not seeing those fall out of the pipeline. We're just seeing some elongation of deal closing. I would say, in the U.S., in particular, we've seen continued strength. And so while we monitor the conflict, we're not seeing impact in our business nor do we anticipate if things don't get worse, but there will be meaningful impact for the rest of the year.

Got it. And I guess focusing on U.S. investment sales, it was pretty impressive just the amount of -- by which you outpaced the broader market this quarter. I was wondering if you could sort of dig into the drivers of that, whether it's specific markets that were particularly strong or property types?

Sure. We're very happy with our investment sales performance for the quarter, and it has been relatively broad-based across asset classes. We've seen some uptick in office, which has been nice to see as I think those valuations start to work themselves out. We've seen strength in industrial and logistics. Those volumes grew quite significantly. Retail hotels have both been up. Multifamily continues to grow. It's been a little bit slower this year, but continues to grow. I would say from a geographic perspective, the U.S. has been a huge driver of the business, but we've also seen -- we've also seen activity in parts of Asia as well. Like I mentioned, the Capital Markets business and investment sales, in particular, in Europe, we've seen some elongation in timelines there.

Your next question comes from the line of Mitch Germain from Citizens Bank.

Kelly, I'm just curious about what you're seeing in the M&A side. And what's the biggest hesitation on your part or your company's part with regards to possibly considering closing or doing some sort of transaction?

It's Christian. Now I have unmuted my line, so I'm allowed to say something.

Congrats on the quarter, Christian.

On the M&A side, nothing has really changed. We are very disciplined and prudent in our underwriting investment approach. And so we are constantly looking at opportunities. And I'm certain that at some point, we will do a bit more M&A again. Obviously, in 2024, we did scale and raise. In both of those acquisitions, we surpassed very, very significantly our own plans for those transactions. And so we like to have more of those going forward. But on the other hand, we will not do something which is not driving value for our shareholders. So it's not that we are unwilling. It's just that we keep the bar as high as we placed it now for many years, last couple of years. And at some point, we will find and identify targets which will pass that bar.

I think you cited or maybe Kelly cited some really strong pipelines in capital markets, particularly in the U.S. When do we see Europe, Asia return to a more normalized level of activity rather than seeing just kind of volatility across quarters.

Well, I couldn't respond to that earlier question around the Middle Eastern conflict. Obviously, when you are in Europe, you have the war in the Ukraine on one side and you have the Middle Eastern conflict. And that has very significant impact also from a psychological point of view on investors in Europe. This is all very close and very immediate. And so we saw some signs of kind of return before that war in the Middle East started in February, and then that was immediately coming down. And then talking about Asia, I mean, actually, Asia had some very, very interesting transactions this year.

So some good momentum on actually large transactions. But Asia is not one region really. You have a couple of relevant countries who are making up Asia's capital markets business. And when you look, for example, how significantly. India is impacted by the war in the Middle East. There's no surprise that people are more cautious there. And so I think this is very much correlating with those 2 conflicts. And if they were to disappear then you would see both markets to recover quite significantly because there's clearly pent-up interest, which is currently still on the sideline.

Your next call (sic) [ question ] comes from the line of Seth Bergey from Citibank Group.

I think JLL is just kind of outpacing kind of the market data everywhere that you disclosed it in terms of leasing investment sales. And just curious how much of that is kind of a durable share gain versus a mix of kind of deal size and large deal timing? And I guess, just how does the guide kind of assume that spread persists or compress?

And then maybe along with that, you attribute some of the share gain to kind of the data and the AI platform. And what would we see in the numbers to kind of prove that in terms of win rates, revenue per producer or just anything non-comp -- non-comp cost ratios.

Well, listen, we are obviously very focused on our own platform. And so I cannot provide you with any type of comparison to other players in the market. But just the last point you made about revenue per producer when we talk about the capital markets business, we have been able to grow our capital markets revenue over the last 2 years since it started to recover in '24 very, very significantly without adding any additional brokers. This is all being digested by the existing teams because our technology platform is enabling them to be just much more productive than within any other platform.

And even going forward, we believe that our colleagues have significant room to further grow their revenues per head within our existing environment. And so as long as the clients of us appreciate the intelligence we are bringing to them and the quality of our brokers, we believe that this trend will continue on the capital markets side as well as on the leasing side. But maybe, Kelly, do you want to add anything on the leasing side?

Yes. I guess the only other thing I would say is, I mean, we are confident when we look at the market data that we're gaining share in the space. I do think per some of the comments that we made earlier about what clients are actually looking for, they're looking for full service providers that actually can bring a range of capabilities to them and our leasing businesses and capability is one of them. And so we do see that in our share data that we review -- and the other thing that I would say around the data and AI piece, as you look to link it back, specifically to performance. We don't have numbers we disclose on this, but I will say we track very carefully where our lead flow comes from and where we're generating leads from and what that connects through in terms of like actually closing deals. And so we feel very good about the investments we're making around data and AI specifically and the support to the momentum that, that is providing.

Great. And then just as a follow-up, I think last quarter, you mentioned that the commission tier headwinds would kind of peak early and moderate throughout the year. And in this quarter, they were consistent with the first quarter. I guess what changed there? And how should we think about that through the back half of the year? And then do they reset kind of cleanly next January?

Yes. So thanks, it's a really good question. In both our capital markets and in our leasing business, we've had really outsized performance the first half of the year, the first and the second quarter, and it's also been driven by larger deal sizes, which has the impact of pushing a set of our producers up into higher commission tiers earlier in the year. And that just had a bigger impact on the first and the second quarter than we thought it would because of top line performance.

The second element I would say is since the -- a lot -- not all, but a lot of the growth has been driven from the U.S., which is a much more variable compensated environment. It's in overall -- in terms of overall geo mix, it's had a bigger impact than it might normally have in a typical year where we have a bit more balance across our geos. So we do expect that to moderate as we go through the second half of the year. And then in January, we'll reset again.

Your next question comes from the line of Stephen Sheldon with William Blair.

I wanted to circle back to the guidance increase just because it's very, very notable. And it sounds like things are broadly trending better than expected, but would just love to get some more detail on what's giving you the confidence to increase the guidance for adjusted EPS by this much. And specifically, are there kind of 2 to 3 main drivers to call out that, I guess, are boosting your expectations for the year?

There are a couple of drivers that are driving our confidence such that we are increasing our adjusted EPS. So first is just performance in the first half of the year, which we're very, very pleased with. That would be number one. I think second, when we look at the mix of our business, and particularly the advisory business, we see continued strength as we move through the second half of the year. The pipelines are good. The kind of indicators, broader indicators about business confidence, GDP growth, et cetera, are good, and we're seeing continued momentum around the advisory businesses. And so that is giving us confidence as we go into the second half of the year.

When we kind of put I guess, all of that together, the other piece that is really compelling is we're making a lot of progress on, like I said, our earlier -- our platform investments. And so just the amount of operating leverage that we expect to get from that the revenue that we are looking at for the year, we're quite pleased with and has given us confidence to increase those targets for the year.

Makes sense. And then just as a follow-up and maybe for Christian, assuming you're still there, welcome back. It would be great to get an update on the progress towards that One JLL approach. Where are you seeing successes more holistically serving client needs across the different business lines? And I guess, yes, you're starting to see any notable improvements in cross-selling, I guess, as you prioritize it more. Is that becoming a bigger driver of the strong growth that you're delivering?

Well, we are working very hard on that. This is a muscle which you are training. And as you know, when you go into the gym, you don't see the results immediately. You have to go there over a longer period of time. And so I wouldn't put our performance in the second quarter necessarily down that we have already trained that muscle to the extent where we want it to end up. But there is an overall culture within our organization about sharing information and about working together with clients.

What we are doing is we are working very hard to support that also from a platform point of view, from a technology point of view to make that very easy for our colleagues to cross-sell to each other, not only within business line and not only within country, but what we are very focused on to do that seamlessly across service lines and across geographies. We just recently had a very nice transaction coming from Asia, sourced in Asia and executed in Europe. And those are the things where we can really differentiate against our clients against our competitors and service our clients well. And so that's where we are working on.

I would say the whole Accelerate 2030 strategy, the earliest gain because it is more immediate is clearly the progress which Kelly mentioned on the overall platform efficiency. It's not only AI, it's also general automation where we are making very, very significant progress, which allows us to be so confident about our forward performance. And then the whole topic around data and AI because we were investing, as you know, into that topic for a very long time.

And so we are starting from a very strong base. And so the acceleration on these 2 things are already part of our Q2 results and then the piece about cross-selling and this One JLL notion, it is an evolvement. We have some of those deals coming in, but there will be many more to come over the next couple of years.

Your next question comes from the line of Brendan Lynch with Barclays.

Can you talk a little bit about the pace of adoption for your software and Tech Solutions and the outlook for these initiatives to accelerate profitability this year?

Well, as you know, we moved our software and technology business into our overall REMS P&L. We promised to The Street that this will be now profitable in '27. It was profitable in the fourth quarter of '26 (sic) [ '25 ]. And we are -- after the 2 quarters, we are well ahead of our own plan. So the move has turned out to be absolutely the right move, a lot of friction points which we had before have disappeared. And so from a profitability point of view, it's going really, really well. And we are also expecting a bit more revenue growth in that whole sector coming into the second half of the year.

Great. And then just on global office leasing volume. It's now on pace to come pretty close to the peak in 2019 and also the peak in 2007. So the question is how much runway do you think is left for growth over the next couple of years.

So I will take that question. We have around the world something which is really interested and didn't have a precedent in previous times. We see new rent records for office space in almost every city around the world whenever new product is coming to market. Even in those geographies where the economic environment is weak, we have that situation that we see new record rents.

And at the same time, you go half a mile down the road and you have vacant buildings and no one wants to pick up that space. And so this bifurcation between the most successful companies who are working on bringing their people into the best available spaces and those who are not that focused on spaces and the employee experience.

This is ongoing. And so overall, I would see that as the ongoing trend of the market. Whether that price ongoing higher absolute volumes. I would say, for the foreseeable future, overall, volumes will continue to grow. But at least for our business, that is not as relevant as that trend of bifurcation because as you know, we are very, very focused on the Grade A space. So that's where we have the majority of our market share. And so for us, this trend is more important compared to whether the overall volume is 2% up or down.

Your next question comes from the line of Tony Paolone with JPMorgan.

Some follow-ups here. Just -- you talked about free cash flow running above your target conversion rate. And I guess besides buying back stock, where do you see the biggest opportunities to invest in the business? Or where do you see there may be capabilities you might want to add?

Well, I want to start off with saying that buying back stock is a very important element of our capital allocation because we believe that there's -- this is a great investment to buy our own stock back. But putting that to the side, we still have an ongoing long list, and it will probably never get much shorter of potential investments into our platform.

At the moment, we are significantly increasing literally month by month, our investment into our AI tools. And that is something where we see really nice progress on not only the adoption, but also on the value creation around that. But then there's also just very basic. There are always areas in our business where we have geographies, where we, in a certain asset class, would like to add more capacity where we invest into new teams, which is something where some of that money flows into.

So the good thing is you're never running short of ideas how you can and where you can invest into the platform to drive value for our shareholders. So on that end, I'm not concerned that we will run short of ideas.

Got it. And then I guess on the data center side, can you maybe give us a sense as to where the largest revenue and profit buckets lie today across the business lines. Maybe kind of what the growth rates look like or just again, what kind of capabilities do you see yourselves having the most strength or opportunity to build there?

Yes. I mean, as you know, this is a super dynamic market. At the moment, we had at the end of the quarter, 340 data centers in our facility management and from a gigawatt point of view, because we have contracted now numerous, very large data centers we expect from a just gigawatt perspective, that number to grow by 1/3 within the next 2 quarters because we have already signed those contracts and those data centers will be finished over the next couple of months. So this is ongoing recurring revenue, which as you know, we are very focused on. And so that is, from our point of view, obviously, very good revenue. And that is complemented by revenue on the transactional side on -- with data centers.

And that drives, obviously, in that very moment, higher margins and profits, but -- than, once that is booked, then it's over. So kind of -- you kind of said, you always made the distinction what is the more attractive one. Longer term, it's a mix of both things. Our overall mix is 80% recurring and 20% transactional, and that's probably also what we like to see on the data center side.

We have reached the end of the Q&A session. I will now turn the call back to Christian Ulbrich, President and Chief Executive Officer, for the closing remarks.

Thank you, operator. With no further questions, we will close today's call. On behalf of the entire JLL team, we thank you all for joining our call today. We look forward to speaking with you again following the third quarter.

This concludes today's call. Thank you for attending. You may now disconnect.

Thank you for standing by, and welcome to Jones Lang LaSalle Incorporated Q1 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Sean Coghlan, Head of Investor Relations. You may begin.

Thank you, and good morning. Welcome to the First Quarter 2026 Earnings Conference Call for Jones Lang LaSalle Incorporated. Earlier this morning, we issued our earnings release along with a slide presentation and Excel file intended to supplement our prepared remarks. These materials are available on the Investor Relations section of our website. Please visit ir.jll.com.

During the call, as well as in our slide presentation and supplemental Excel file, we referenced certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures to GAAP in our earnings release and slide presentation. We also referenced resilient and advisory revenues previously referred to as transactional revenues, which we defined in the footnotes of our earnings release.

As a reminder, today's call is being webcast live and recorded. A transcript and recording of this conference call will be posted to our website. Any statements made about future results and performance plans, expectations and objectives are forward-looking statements.

Actual results and performance may differ from those forward-looking statements as a result of factors discussed in our annual report on Form 10-K and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statements. Finally, a reminder that percentage variances are against the prior year period in local currency, unless otherwise noted.

I will now turn the call over to Christian Ulbrich, our President and Chief Executive Officer, for opening remarks.

Thank you, Sean. Hello, and welcome to our first quarter 2026 earnings call. This morning, I'm pleased to report a very strong quarter for JLL to start 2026. The combination of our market-leading advisory businesses and resilient revenue based drove record levels of first quarter revenue and earnings.

Robust growth across our core advisory businesses was broad-based, led by momentum in the office and industrial sectors in leasing advisory as well as growth across nearly all sectors and geographies in capital market services. Our data and AI advantage is driving productivity gains, increased market share and strong financial results across these businesses.

Increased revenue and our disciplined operating rigor are unlocking strong profit growth and margin expansion. Adjusted EBITDA increased 24% and adjusted EPS was up 56%. The Care wins for outsourcing and strong demand for project management supported the continued organic growth stake of our resilient revenues, which were collectively up high single digits during the quarter.

The transformation of our property management business is also progressing, and we have now strategically exited or repositioned nearly 60% of the targeted contracts in Asia Pacific. Overall, we are building a scalable, tech-enabled businesses with an advisory-led approach. We expect the revenue and profit of our resilient businesses to steadily grow over time strengthening the through-cycle performance of the overall company.

At our investor briefing in March, we introduced our Accelerate 2030 strategy, long-term financial targets and approach to advanced value creation. This strategy is underpinned by a decade of progress, which has resulted in a resilient foundation, strong financial profile and a unique structural advantages. We have established scale in large, growing and complex end markets through our integrated global service offering.

We have the balance sheet, strong cash generation and capital strength and agility to execute targeted capital deployment with a focus on ROIC. And our investments in proprietary data and AI capabilities over the past decade are expanding JLL's competitive advantage. These are strategically critical and differentiating levers that uniquely position us to build on our strong market position.

With this as a backdrop, with high conviction that we have the strategy, talent, data-led approach and culture to drive synergistic scale, further increase our resiliency and deliver compelling value creation through the 6 and parties of our Accelerate 2030 strategy.

During the investor briefing, we highlighted the revamped strategy of our investment management business, [indiscernible] strategy is focused on achieving 2 primary objectives: investment outperformance for our clients as well as profitable growth and margin expansion for shareholders. We have been in the investment management business for over 45 years, operating various fund strategies globally with an attractive performance track record.

We're strategically investing in LaSalle to accelerate growth of a resilient revenue base while also generating synergies with the broader JLL portfolio. The sale is uniquely positioned to differentiate and innovate with new products through the collective relationships, expertise, platform and technology from across JLL. In many ways, the strategy is embodied by the first close of our global decapitalization funds, [ LPPF ] during the first quarter.

In partnership with Shell business lines, the fund will execute a retrofit led approach, spanning deep retrofits of vacant buildings, light retrofits and ground-up developments to address the growing scarcity of high-quality, energy-efficient properties. We have the expertise and capabilities to execute this strategy globally, including across energy, sustainability, project management and property management.

Last year, we invested $100 million of incremental growth capital into one of LaSalle's flagship U.S. funds. JLL Income Property Trust as we saw an opportunity to leverage our competitive advantage and potential to scale. Today, we are announcing the commitment of an incremental EUR 100 million investment in the LaSalle Encore+ Fund, one of our flagship European products to support its next phase of growth.

This is a compelling organic investment opportunity for JLL with attractive risk-adjusted returns aligned with the strategic and financial objectives of our capital allocation framework. We continue to assess a pipeline of innovative investment opportunities with considerations for LaSalle's strategic growth plan as well as other capital allocation priorities across JLL. Our capital deployment decisions during the quarter reflect our capital allocation principles, balance sheet agility and through cycle lend on leverage.

We are committed to executing our Accelerate 2030 strategy with discipline and rigor aligned to our capital allocation framework. We repurchased $300 million of shares at an average price of approximately $301 during the first quarter, inclusive of the $200 million accelerated share repurchase plan. This reflects our stated commitment to be active on share repurchases with $2.7 billion remaining in our expanded authorization.

With that, I will now turn the call over to Kelly Howe, our Chief Financial Officer, who will provide more details on our results for the quarter.

Thank you, Christian. The robust first quarter growth on the top and bottom line is a product of our competitive position, focused on enhancing operating rigor and positive business momentum. Revenue increased 11%, inclusive of a 200 basis point foreign currency benefit and was almost entirely organic.

We also generated healthy margin expansion over prior year. Commentary to follow is in local currency to articulate underlying operating performance. Our financial strength coming into the year allowed us to return meaningful capital to shareholders during the quarter, as Christian just described. This reduced our share count by nearly 2%.

Looking ahead, we maintain considerable financial flexibility and are well positioned to drive significant stakeholder value as we fully activate our Accelerate 2030 strategy. Now a review of our operating performance by segment. Beginning with real estate management services, the revenue increase was led by workplace management and project management.

Within workplace management mandate expansions and, to a lesser extent, new client wins drove high single-digit growth. Higher volumes in the U.S., including from new data center wins delivered double-digit project management revenue growth inclusive of a high single-digit management fee increase. Healthy underlying core business growth within Property Management was tempered by the elevated contract turnover we continue to action and discuss in prior quarters. with management fees declining mid-single digits.

As Christian mentioned, we have now strategically exited or repositioned nearly 60% of the targeted property management contracts in Asia Pacific. A portion of the contracts have been successfully renegotiated partially limiting the revenue headwind, but also lengthening the time line of negotiations with clients.

For full year, we expect the financial impact of contract churn to be largely offset by tailwinds from healthy core business growth and new wins in the Americas. Within Software and Technology Solutions, high single-digit software revenue growth mostly offset the continued pullback of discretionary technology solutions spend from certain large existing clients.

For the segment, we are targeting mid- to high single-digit revenue growth for the full year with variances by business line and weighted to the second half. Workplace management contract renewal rates are stable and our pipeline is strong, albeit second half weighted. Client activity within project management remains healthy, particularly in the U.S., positioning us for continued momentum over the near term. We continue to balance investing to drive long-term profitable growth with near-term business performance and sustained annual margin expansion.

Moving next to Leasing & Advisory. Revenue growth was led by continued momentum in the office sector, an acceleration in industrial and a meaningful contribution to data centers. The office leasing revenue growth notably outpaced the 1% decline in market volumes. On a 2-year stacked basis, global leasing advisory revenue growth was 29%, and reflective of strong ongoing and broadening demand.

The leasing advisory adjusted EBITDA and margin expansion was primarily driven by revenue growth partially tempered by the impact of higher commission tiers being achieved earlier this year and business mix. We expect the commission tier headwind to moderate over the course of the year.

Looking ahead, our leasing pipeline remains healthy. GDP growth outlook continues to be constructive and business confidence as measured by the OECD has improved even despite the fluidity of the macro environment. thereby providing optimism for continued growth in the near term. For the full year, we are targeting high single-digit revenue growth. We continue to invest in our talent and to augment our proprietary data advantage to drive long-term profitable growth.

Shifting to our Capital Market Services segment. Investor bidding activity remained resilient, underpinned by robust liquidity in debt markets, a continued uptick in transactions of scale and stable pricing. Investment sales revenue grew 27%. Debt advisory revenue increased 30% and equity advisory revenue increased 75%. The continuation of the business momentum in the quarter is reflected in the 2-year stacked growth rates for investment sales and debt advisory of 42% and 81%, respectively.

Our investment sales revenue growth in the quarter notably outpaced global market volumes, which is consistent with recent history and in part attributable to the strength of our people, global platform and proprietary data. Revenue growth as well as lower loan-related expenses versus prior year drove the increase in the adjusted EBITDA and margin expansion in the quarter.

Looking ahead, our global invest sales, debt and equity advisory pipeline remained strong and underlying market fundamentals remain healthy. For the full year, we are targeting low double-digit top line growth and see meaningful runway for continued growth over the long term.

Turning to Investment Management. Growth in advisory fees largely attributable to our capital raise activity over the prior 12 months was offset in part by the effects of meaningful disposition activity in Asia Pacific. As it takes several quarters to deploy new capital raised, we expect advisory fee growth to gradually pick up as the year progresses, driving low single-digit growth for the year.

Additionally, we anticipate full year incentive and transaction fees to be towards the lower end of historical range and weighted to the fourth quarter. Shifting to free cash flow, balance sheet and capital allocation. Higher cash earnings were largely offset by growth-related working capital headwinds, particularly within net reimbursables, an increase in CapEx in part due to timing, more than offset the improvement in operating cash flow leading the seasonal outflow of free cash flow to be largely in line with a year ago.

For the full year, we are targeting a free cash flow conversion ratio consistent with our long-term target of over 80%. Our cash generation over the trailing 12 months contributed to a reduction in net debt, which along with higher adjusted EBITDA led to an improvement versus a year ago in reported net leverage to 1.0x at the end of the first quarter typically our seasonal peak period.

Capital deployment priorities remain focused first on driving organic growth and productivity across business lines weighted to areas of highest return on capital and long-term growth potential within our core services. Organically, we are continuously and diligently enhancing our platform and service differentiation as well as investing in our people strategy.

Our acquisition pursuits remain focused on augmenting organic initiatives that enrich our capabilities as well as deepen our client relationships across multiple business lines, provide synergistic scale and enhance our enterprise resiliency. Returning capital to shareholders remains a top priority.

As Christian described, the 275% increase in our share repurchase authorization to $3 billion along with the $300 million of share repurchases during the quarter reflects our commitment to returning capital to shareholders as well as the value we see in our shares. The majority of the shares associated with the $200 million accelerated share repurchase were delivered during the quarter at an average price of approximately $290. The remaining shares under the program will be delivered in the second quarter.

Looking ahead, we intend to be programmatically active on our repurchase authorization. The total annual amount of repurchases in a given year will depend on the broader operating environment, our leverage outlook and valuation as well as relative returns to other opportunities inclusive of M&A.

Regarding our 2026 full year financial outlook, we are encouraged by the continued strength in our pipelines and underlying business fundamentals. Considering our ongoing focus on driving operating leverage and the segment top line growth targets I mentioned earlier, we are targeting an adjusted EPS range of $21.80 to $23.50 for the year, reflecting 20% growth at the midpoint. This aligns with the adjusted EBITDA range we provided last quarter.

The strong first quarter results put us on a trend towards the upper end of the range, though the current fluidity of the macro environment limits late year visibility into our more economically sensitive businesses. Going forward, we intend to provide segment revenue and adjusted EPS as our primary annual targets as they better encapsulate how we holistically measure our business performance.

Christian, back to you.

Thank you, Kelly. Before closing, I would like to address the ongoing conflict in the Middle East. We have been growing our business in the Middle East for over 20 years with operations anchored in Saudi Arabia and the UAE.

Today, the business represents a low single-digit percentage of revenue with strong growth potential. Since the onset of the conflict, our top priority has been the safety of our people and supporting our clients with operations in the region.

From a commercial perspective, there has been no material impact on our consolidated results to date, and our pipelines have continued to build throughout and following the first quarter. That said, we have intentionally taken a conservative approach to leverage and are prepared for a wide range of outcomes. We are focused on first and second order risk to our businesses globally across a variety of scenarios to the extent, tension persists and become a meaningful headwind to the global economy.

I would like to take this opportunity to thank all of our colleagues around the world for their perseverance and focus. On the heels of the launch of our Accelerate 2030 strategy, we are excited by the significant runway for JLL to deliver long-term growth and value creation for stakeholders.

Operator, please explain the Q&A process. S

[Operator Instructions] And your first question comes from the line of Anthony Paolone with JPMorgan.

My first question relates to the guidance. If I kind of back into what growth might look like for areas like leasing and capital markets later this year. it seems like it would be either consistent or maybe even a little bit inside of what you guys outlined at Investor Day for the next 5 years.

So I guess, one, is that right? But then two, should we take that as just being conservative given the uncertainty in the environment? Or do you think that capital markets and leasing has basically recovered back to a normalized level here at this point?

Thanks for the question. I'm happy to address that. Our guidance obviously reflects a range of scenarios, as I noted. We are, at this point, trending towards the high end of our guidance. As it relates to leasing and capital markets, our outlook is roughly in line with where we would expect growth rates to be over a longer-term period in line with what we articulated at Investor Day. That said, as we look at the back half of the year, 2 things.

One, we've got very strong comparables because we had very strong quarters for leasing in the fourth quarter, and we had very strong quarters last year for Capital Markets in the third and the fourth quarter. And so our guidance for this year reflects some proportion of lapping those very tough comps.

And then if you look at the 2-year stacked basis for those businesses, actually, the growth rate is very strong, including our guidance. And then I do think from a macroeconomic perspective, as Christian noted, we're seeing very little impact in our business today, but we are monitoring the situation very carefully. And if there was to be an impact, it would come in the back half of the year, and that is reflected in the range of the guidance that we have provided to you.

Okay. And then my follow-up is on Encore. You noted the EUR 100 million investment there. But maybe can you step back and just give us a sense like how much capital has been raised there what are you looking to raise there?

Just trying to understand how important that is in sort of jump starting AUM and LaSalle and also the order of magnitude of maybe further and co-invests to kind of get capital raising going across that.

Capital for Encore+, what we're expecting there. The team will provide you in a moment. What I would say is that there has been a ongoing trend, which has developed over several years now that when you as a fund manager kicks out those funds with your own investment that drives a lot of confidence into the product and that usually then brings a couple of other investors coming alongside and you have this sum start, which you want to see to get enough momentum in your capital raising.

Team, do you have the numbers specifically for Encore+?

Yes. So we're investing EUR 100 million. This is a core European fund. It's an open-ended fund. And so we do expect meaningful third-party capital raise. I don't have a specific number to provide you at this moment.

And the next question comes from the line of Stephen Sheldon with William Blair.

First, I just wanted to -- if you could talk more about what you're seeing in capital markets. And specifically, Yes. Have you seen any pushout in deals or delays given rate volatility and sort of continued geopolitical or macro concerns.

So yes, just curious momentum there is kind of continued early into the second quarter. Sounds like it has based upon your comments, Christian, but just thought as were asking.

Well, Capital Markets started the year with really very significant momentum across the globe and which is reflected in our first quarter numbers. And this momentum also has continued in the second quarter. The U.S. market is pretty much unimpressed by the geopolitical environment so far. .

The European market, we have seen some deals being canceled. We have seen some deals being delayed. But the overall momentum was still so strong, that's just taking away an additional outperformance, which we would see otherwise. And that is also pretty much the case in Asia Pacific. You may recall that Asia Pacific was relatively weak in 2025. They have very strong momentum.

A lot of large transactions going on. We haven't seen those pausing but you probably wouldn't see it in our numbers anyway. It's just what this conflict does. It takes away additional outperformance, which we would have seen otherwise without that conflict.

Very helpful. Makes sense. And then as a follow-up in leasing. How should we be thinking about the potential range of incremental margins over the rest of the year? It sounds like the first quarter was bogged down by producers hitting higher commission tiers you expected.

So should we be expecting kind of better incremental margins there looking forward as kind of as we said, I know it can be volatile quarter-to-quarter, but just generally, how are you thinking about it over the rest of the year.

Yes. Thank you for the question. My first advice is not to look at incremental margins on a quarterly basis, but really on a kind of 12-month trailing basis. That said, in the first quarter of this year, as you noted, our producers have hit higher commission tiers earlier in the year than we expected. That is due to the strong performance of the business and also kind of the geo mix of where the business is coming from.

We expect the commission headwind to moderate through the year. That said, we continue to make investments in that business around talent and technology and data. And we expect for this year 2026, our overall margin rate for the business to be relatively flat versus prior year.

And the next question comes from the line of Jade Rahmani with KBW.

Just to confirm your last comment, the relatively flat margin rate, that's on capital markets. Is that right?

That's on leasing to be clear. On leasing, yes. In capital markets, we, as Christian noted, have a strong pipeline. The momentum is good in capital markets, and we expect a strong incremental margin for capital markets this year for the full year.

Okay. Still in the 35% to 40% range?

Yes. I'd say mid-30s is generally where we expect to be for incremental margin for Capital Markets.

Okay. I wanted to ask about AI and how you're managing the rollout because there are some concerns about potential disintermediation in this space down the road?

And then I know that keeping data in a closed loop system is centrally important. So could you give any color on how you're approaching it with respect to what percentage of the sales teams are currently using AI and how you expect to manage that going forward?

Sure. Well, as you know, we have been investing into technology and especially into our data platform now for over a decade. And we believe that we have, by far, the best data platform within our industry. All our products are tied into that data platform. So every data goes into that platform and we can bring all the data back to whatever type of product or agents we have created.

The adoption rate within our organization is incredibly high. There's a lot of excitement amongst our colleagues to really use these new large language models. And so on that end, we feel real momentum. There are several agents becoming live per week on the citizen development side. And then we are working from a corporate central perspective on some very interesting approaches to at but also to change how we are getting to market and how we are solving a topic.

To your second part of your question point about disintermediation. I mean, we spoke about that at length during our Investor Day. For now, we are not concerned about any potential disintermediation. In fact, for now, we are very clear that AI is a tailwind for our organization, first and foremost, because we have this very, very rich data platform, which allows us to provide a lot of proprietary data to the benefit of our clients. And that data platform is growing with every transaction we are doing with every service we are providing to our corporate clients.

And then over and above that, even in those areas where people are speculating that there could be potential disintermediation, what has been mentioned the most is the value and risk advisory business. At the end of the day, there's also a very important aspect who is confirming the potential valuation where the brand aspect is is absolutely significant.

And we believe that the JLL brand will go a very long way on that end as well. So in summary, for now, we don't see any risk of disintermediation.

And maybe just a follow-up with a couple of data points for the first part of the question that Christian addressed. We spoke about this a bit at Investor Day, but we see 75% adoption across JLL across our core enablement products. And we've got -- we monitor this closely. We've got 25,000 employees who are working on our enterprise AI applications every day. We've seen a 60% year-over-year increase. We expect that to continue to grow.

Lastly, on the capital management side, what are your expectations for full year share repurchase given the accelerated repurchase late in the quarter?

Yes. Thanks for the question. As I think both Christian and I noted around our capital allocation strategy and priorities, organic investment, return of capital to shareholders and strategic M&A are the 3 things that we're constantly balancing. We're very committed to returning capital to shareholders.

As you know, we did a $300 million capital return in the first quarter $10 million of that is what we would consider to be programmatic, and we look to continue our programmatic share repurchases throughout the year and into the coming quarters beyond that as well. The $200 million was more opportunistic relative to market conditions.

The exact amount of the programmatic repurchase in any given quarter or any given year is going to vary a bit depending on the operating environment, the external market what other opportunities that we're looking at and returns on those opportunities. But we do intend to have a fairly programmatic approach to share repurchases as we go forward.

And the next question comes from the line of Joanne [indiscernible] with Goldman Sachs.

I appreciate the comments on the fluid macro, but I just want to understand your comments I think if I understood correctly, you think the impacts of the conflict, if they were com, would likely be felt in the back half of the year. I guess, why is that the case? I would think that the impact would come quicker than that?

And just comparing it to Liberation Day last year, which was similar in timing, though obviously a completely different issue. The impact was felt in 2Q. And then by the time we got to the second half of the year, sort of capital markets were back off to the races.

Yes. Thanks for that question. I wouldn't necessarily compare the 2 things. The imposement of tariffs was an immediate kind of load to the economy and additional cost. Here, we have a conflict. If the conflict would have been solved within 4 to 6 weeks, I would have said the impact outside of the Middle East would have been almost unnoticeable. But with every week, this is continuing we have these higher energy prices and all the other implications around lack of fertilizers impact on the chemical industry, you name them.

And so what people have stored, which helps them to bridge that impact is kind of fading away and at some point, they all have to pay for that higher energy. Look at the airline industry, you have some airlines who have secured the pricing for this aircraft fuel they need and others don't. And those who don't are immediately appealing that impact now, and that will have repercussions on their performance in the broader economy.

And so the the lengthening out of that conflict will have a heavier load on the global economy. And frankly, especially in those countries where there is a very, very high dependency on purchasing energy and on purchasing fertilizers and other products, which are coming from the Middle East. It's least sells in the U.S. You see the pricing also in the U.S. at the gas station, but the U.S. is vary independent. That's why we also see very little so far in our business environment in the U.S. But when you go to Europe, you feel like quite noticeable already.

And then if you talk to our friends in India and in other countries who are heavily impacted, they would -- they are seeing great concern at that conflict continues over the summer.

Okay. No, that's helpful. And then I guess on the office leasing front, I mean results continue to be really strong. But I guess what are tenants and brokers telling you regarding their future plans for footprint? Are they confidently moving ahead with plans for later this year or next year?

Or are you seeing any indication that first, they're trying to solve for sort of AI impacts to their go-forward head count and sort of office using employee bases before they sort of commit to space.

Thanks for the question. Our leasing pipeline is quite strong. The indication that we get is that organizations are flowing forward with getting their people together, getting people into the office. In some cases, we've even gotten feedback from clients if they overshot on the downsizing through the pandemic and now need to correct for that. Ironically, I would argue that the AI boom has actually been also a boom for our leasing business as the ecosystems around all of the AI startups, AI and I would say financial services has really cause an uptick in activity, particularly on the coast, San Francisco, New York.

And so at this point in time, we're really not seeing an impact on our business from kind of what people are thinking about in terms of AI, concerns, headcount, employment, et cetera.

And the next question comes from the line of Seth Bergey with Citi.

I just wanted to kind of ask about the commentary on kind of the office revenue outperformance. Is that kind of driven by market share gain or deal size mix? And can you just talk about if that's kind of in any particular geographies?

I assume you're referring to leasing specifically. So I can go ahead and address that. yes, our office demand was very healthy in the first quarter. It is driven both by an increase in transactions and an increase in deal size. So we've seen both. It is definitely driven by gateway markets. .

As I noted earlier, in particular, we've seen a lot of strength in places like New York and San Francisco, driven largely by kind of AI and AI organizations looking for space to get their people together and also financial services.

And the next question comes from the line of Brendan Lynch with Barclays.

Could you provide a little bit more detail around the decarbonization fund within LaSalle and examples of the size of this current initiative?

Well, this is a new initiative, and I'm not quite sure whether there are a lot of examples out there from other fund managers. What we are doing there is we are looking for mostly existing buildings, which are not up to the expectations on potential tenants in the market.

And we want to completely refit those buildings and turn them into a level that they can meet the expectations of the top tenants in the market, and that includes, obviously, that these buildings have to be very excellent in their energy consumption ideally net zero or close to that level. And we are starting with a couple of projects, which have been identified.

The initial size in our first outlook is EUR 300 million. which we want to operate with. And then obviously, we go into fundraising now. And hopefully, we bring that fund up to a decent level relatively swiftly.

Great. And maybe for a follow-up on the M&A pipeline. Are you primarily looking at geographic expansion or new capabilities or technology investments? Just any additional color that you could provide there around what you're targeting?

Well, as we stated in our Investor Day, we see very significant growth opportunities in our core activities. And so we will focus therefore, very much on those areas, which we already cover today as core services and look for if so, for opportunities to increase our market share in geographies where our market share may not be where we like it to be and if there is an opportunity on the M&A side, we will look at it.

But as we have said several times before, we are very confident that our organic growth rate will stay at the high single-digit level. And so there is no need to do any M&A. The M&A market overall has significantly increased in activity in our space, and we also see what we would call a little bit of nervousness on the seller side with regards to the price levels they can achieve. So it may become more attractive in the coming 6 months, also depending on how the geopolitical environment will pursue.

The next question comes from the line of Mitch Germain with Citizens.

How should we think about how we measure the performance of the investments that you've made within the -- and then LaSalle. I mean this is the second, I think, believe, $100 million investment. So how do we think about maybe the economics and how it impacts your earnings and the types of returns that you're targeting?

Well, Mitch, as we have said before, and we will be very consistent around that, every use of capital goes to a very rigorous analysis and it has, first of all, the biggest turtle it has to be better than share repurchases. So we looked at the proposal which came from our LaSalle colleagues, the last one and now the one we have spoken about today. And it is well above the returns we expect from share purchases.

And obviously, there's numerous implications when we expand the footprint of LaSalle. It is not only the opportunity, which is directly within the LaSalle P&L but there's also notable cross-selling with a broader platform of JLL. So we are very comfortable when they come with convincing idea that this is, from a shareholder perspective, excellent opportunity to use capital, and as I said, well above share repurchases.

That's super helpful. And then last one, Christian, I appreciate the color you gave on the recycling out of those operating management contracts, I think you said 16%. So I'm assuming we'll see these contracts for about a year in term. So should we think that kind of by midyear or maybe 3Q that you've cycled through what you want to accomplish there?

Yes. Yes. So we started on this initiative to really take a deep dive on the contracts last year and started cycling through second half of last year. We had, as I think, noted earlier, expected to have that process wrapped up kind of halfway through this year. .

One of the things that we pleasantly -- that pleasantly surprised us as we got into that process was that many clients were actually interested in renegotiating terms of those contracts, which we view as a win. And so the upside is that, obviously, the outcome for us is better, but it's taking a bit longer to cycle through those and we expect that to go through the end of the year at this point.

We do expect the headwind from that to be offset from strength in other parts of our business, namely in the Americas where we're seeing strong underlying growth in that part of the portfolio.

If I can just follow up, what sort of -- maybe renewals, not the right word, but what a sticky stickiness that you've gotten from that process? .

The specific contracts that we were targeting were in our Asia Pacific region. Many of them have been structured in a way that, frankly, we're just unattractive to us from a financial standpoint. Very, very, very high pass-through costs, low portions of actual value-add fee revenue generating a portion of that.

And so I would say the stickiness has been -- it's been about, I would say, 1/3 of those contracts as we've gone through have been interested in renegotiating to something that is more attractive, I would argue for both sides, more attractive for them, but also more attractive for us from a commercial standpoint.

And I'm showing no further questions at this time. I would like to turn it back to Christian Ulbrich for closing remarks.

Thank you, operator. With no further questions, we will close today's call, and we are looking forward to speak to you again next quarter. Thank you.

Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you for attending. You may now disconnect.

Good morning, everyone. Thank you for being here, both in person and by live stream and welcome to JLL's 2026 Investor Briefing. Today's event is about reflecting on our progress as an organization. It's about providing you all transparency into the state of our business today, and most importantly, it's about charting the path to an even greater JLL in the future.

As we reflect on a decade of progress and the organization that we have matured into today, we have never been more energized nor more excited about the positioning of the firm for the future. And you're going to hear a lot about that during today's presentation.

Today's presentation includes forward-looking statements about JLL's future performance. Actual results may differ materially. Please refer to our SEC filings for more details and refer to the slide for more information on our disclaimer. We'll also reference non-GAAP financial measures throughout the presentation with reconciliations available at the end of this presentation.

For those that have joined us in person, we encourage you during the break and throughout the lunch to engage with the JLL leadership that is in the room today. We have a set of leaders in the room from all around the world that have come here today to be with all of you. We'll have an opportunity for Q&A at the end of the session today. For those that are joining by live stream, please submit questions throughout the event through the Q&A functionality on the site. And for those in person, please use the QR code on the sheet in front of you and again, submit questions throughout today's presentation. We will get to as many questions as time allows.

Thank you again, everyone, for the time, the participation and the engagement today. With that, I'm pleased to welcome our President and Chief Executive Officer, Christian Ulbrich, to kick off today's program.

Good morning, everyone. It's really great to see you here in person and also online. I would say it's always a good idea to be with JLL and when it's raining outside even more so. So thank you for being with us.

We are really excited to present Accelerate 2030 to you. We have been working on that strategy for over a year, the leadership team, and that was exciting work for us because it was very encouraging work. I can promise you that we will drive profitable growth we will see strong cash generation over the next 5 years, and we will continue with a very disciplined capital allocation.

So today, my colleagues and I will walk you through what it the imperatives of Accelerate 2030. We will talk about our key growth drivers, our resilient business lines and how we create growth, cash generation and long-term value for all of our stakeholders. Accelerate 2030 is built on a decade of progress and strengths. We defined it by 3 themes: which are our resilient foundation, our strong financial profile and most importantly, our unique structural advantage. And what we mean by that is our proprietary data, AI and our unified global structure, which is really important to bring it all together. And probably most importantly, we have this incredible motivated, skilled and loyal JLL family all around the world. And for all the JLL folks who are in this room and online. I'd like to thank you once again for your brilliant dedication to this company. Thank you.

The trust of our clients have allowed us to build this profitable business and the resilience and Accelerate 2030 will drive us even further on that journey to be even bigger, more profitable and more resilient in 5 years from now. So since the release of the Beyond Strategy in 2017, and I know some of you were already with us when we presented that at an Investor Day, we delivered really strong and with the exception of HFF mostly organic growth through all those years and especially through these 2 macro cycles, which we had over that time.

We exceeded our original targets with a 16.2% adjusted EBITDA margin, which we delivered in 2025, which is up beating the top end of our initial target range and the $1.2 billion of cash flow ahead of our $1 billion target, which we initially forecasted. When we did that Beyond Strategy back in 2017, we anticipated much more M&A. But then with an increasingly greater focus on ROIC, we successfully pivoted to more organic growth, and that has now represented 96% of the growth of our top line over the last years.

With the ending of that Beyond Strategy in 2025, we achieved significant global scale across all our 4 segments. When you look at our Real Estate Management Services unit, we manage 5.7 billion square feet across the world, 5.7 billion square feet. We leased more than 900 million of square feet last year, which is double the New York office market. And we transacted $258 billion of Capital Markets transactions, and you bring that back to the amount of working days that's more than $1 billion worth of transaction every single working day what we transacted last year. And our investment management ended with $86 billion of assets under management, which is a great business for us to constantly understand how our clients are thinking and to see where the investor community is heading.

When you look at our global footprint, we are pretty much everywhere where we need to be. And we are there with a lot of intention. We are where our clients need us to be. And there is no need for us to necessarily expand that footprint. But what is important that within that given footprint, we have tremendous potential for further growth because depending on the country, 30% to 80% of those markets are still underpenetrated by the top global firms. And so we have tremendous growth opportunity there mainly driven by client consolidation, but also the continued expansion an acceleration of the overall outsourcing trend, which we saw over the last decade and which we will continue to see going forward.

And when you look at those client needs, a key differentiator for us is our scale. Scale matters in our industry. And it will become even more critical when you think about data and AI going back to the amount of properties we manage, the amount of data we can pull from those properties are critical for our advisory capabilities going forward. For over a decade, we have been focused very much on our tech foundation. We have recruited top talent from various tech companies in the valley and around the globe. And we have been investing into more than 55 [ Proptech ] startups. Dominant factor was we wanted to learn. We wanted to know what's going on, and we always wanted to be the ones who bring the best technology first to our clients.

We established a proprietary data platform covering nearly 2 million of properties in our platform. And our core tech products across the company have more than 75% adoption, totally digitizing our workflows going forward. NII has clearly now changed the path forward. Our investments over the past 10 years have given us unique data and NII advantage and so we are absolutely a firm believer that we will benefit from AI and from all the new innovations, which we will bring to market.

We are the partner of choice for the world's leading investors and occupiers. We serve 95% of the global top investors and half of the Fortune 500 globally are clients of us. And once they are clients of us, we have a world-class retention rate of 99%. About 70% of our top investor clients and 40% of our Fortune 500 clients are already buying more than 4 services of JLL. Now if you turn that around, when I say half of the Fortune 500 are clients of us that means we have the other half to hunt. And if we -- I tell you that only 40% of those Fortune 500 clients are buying more than 4 services, that means we have 400 Fortune 500 companies where we can sell many more services to them. And that describes the significant runway, which exists to deepen those relationships and to continue the growth journey of JLL. And in a large addressable market with very limited information transparency, that proprietary data, which we have and continue to collect augmented by AI gives us this unique advantage, the structural advantage, which we are always talking about.

Another key advantage is our business mix because with our business mix, we were able to deliver 8% annual growth since 2016, which is roughly 3x the rate of GDP. And it's providing stability through the cycles. This model has proved clear resilience over the last 6 years. I don't want to give you all the things we had to go through over the last 6 years but the resiliency of this company has been remarkable in that environment. Our resilient business lines delivered 10% growth and our advisory business, based on their technology platform recovered much earlier than the market recovered and transactional volumes were coming up. And as a result, 80% of our revenue is now from these durable lines and Accelerate 2030 will strengthen that foundation even further.

This business resilience is directly fueling our profitability. We have a long track record of growing profits, raising margins through economic cycles. And our adjusted EBITDA, when you look at that slide, is showing that we are able to deliver higher highs and even more importantly, higher lows in difficult environments. And even in 2023, which I would argue, was for our industry tougher than the GFC, we delivered almost $1 billion of adjusted EBITDA. So this stability of our recurring revenues and a transactional business, which is structurally now much more profitable than during the times of the GFC is something which is providing a lot of optimism.

Our 10-year track record is pretty clear when you look at it, we had this 8% revenue growth through that cycle. On average, we added every year, 40 basis points of additional margin to our adjusted EBITDA. Our free cash flow over that time was more than $5 billion, as you know, and that's why you like our industry, this is a cash flow-generating industry, and that will continue. We decided to bring our net leverage in this very volatile and unpredictable world down. As you can see, we ended with 0.2 but at the same time, we returned more than $1.5 billion of capital.

The good thing about Real Estate, and I want to highlight that once again because that's sometimes forgotten Real Estate is a critical strategic priority for our clients. I don't know whether you know but I don't know many business models which work without physical properties. You cannot just drop us because there are some headwinds. And therefore, the decisions on location, space and environment directly impact the ability of businesses to compete, grow and adapt very important, very relevant for the resiliency of our business plan. Our clients operate in a very complex world, we all have to operate in a very complex world. And with regards to us and our clients that's shaped by 4 key macro trends. And these forces are changing real estate decisions, and they will inevitably drive further consolidation on our client side but also within our industry. And this is precisely where JLL value is the strongest.

Our scale and integrated approach to build to help clients navigate this complexity makes us a clear beneficiary of all the noise and nonsense, which is out in this world. The way these geopolitics and volatility are increasing the complexity for real estate decisions, you can see at the moment, life what's going on in the world and what's going on in the Middle East. So this is where our clients are immediately relying on us and asking us how we can help them to deal with that situation. And then when you look at the demographics and urbanization, those population and migration patterns are shifting. And they are -- the way they are shifting, they are massively impacting occupancy and investment strategies. I mean just think about what we had during COVID where one of a sudden it feel that whole New York is moving to Miami. And we had to caution people and say, be careful. New York is New York and so then one of a sudden, they were all keen to find more space in New York again after that first type. So these things are really important for our business.

When you think about energy and sustainability, I mean this is a hot topic not only because of data centers, it's a hot topic overall, energy security and the cost of energy, the availability of a grid. And so those are really long-term criteria, which drive value of real estate, but it also impacts very much the viability of business models and where you can locate those business models.

And then finally, AI and all these innovative advancements, transforming all industries, including our industry, the real estate industry. But this is precisely where JLL's value is the strongest. Again, our scale, our integrated approach are built to help those clients manage that complexity. Our industry specifically has 5 key tailwinds. And I want to highlight a little bit those tailwinds. We have this long-term tailwind for outsourcing. I mentioned it earlier. This outsourcing trend is super relevant. The facility management industry is 2.7 trillion industry but the current penetration is only 37%. There's absolutely no reason why it isn't 50%, 60%, 65% in a couple of years. The value we can add through our knowledge and our experience is very, very significant. And the tougher the overall environment will become the more companies will accelerate the outsourcing.

Our workplace management business is growing at high single digits. We have told you that this has been the case in the past. This will be the case in the future, and it's very much driven by those statistics around the open market, which we can still penetrate. Now occupiers and investors are actively reshaping their portfolios in response to all those market shifts. Now it's pretty clear occupiers always face dual pressures. On the one hand, they all want to drive productivity and on the other hand, they all want to cut cost. And so this is really powerful for us because we can bring our advisory and our outsourcing services to them. And when you look at investors, specifically just over the next couple of years, a wave of transactional activity is coming. We anticipate $2.2 trillion of U.S. loan maturities and another $2.3 trillion of funds reaching the end of their life globally. That is a lot of work for us, had a lot of opportunity for us to win further market share.

If we then think about how the institutional market is now complemented by private wealth. The increase of high net worth individuals entering the real estate market and entering that market in a much more professional way with much higher ambitions is pretty impressive. And so for us, that means a new host of clients, which we can cover with our brand promise, our experience and our knowledge. Our market share gains in capital markets are a direct proof how our value proposition is winning and how we are uniquely positioned to benefit from this long-term trend of additional capital coming into our space.

I spoke about energy performance which is something -- which is for us directly readable in the data. When you just look on the right side of the slide, there's a 94% premium for low-carbon office space against Grade A buildings. That's pretty remarkable, 94% premium. The key challenge for our clients, but that's the opportunity for JLL is actually to get into those buildings because there's acute shortage of these high-performance assets and that growing demand is pushing those rents up. Access to power is critical, and something which will be with us for many, many years to come.

And data and AI are clearly redefining the client expectations. The vast majority of occupiers will pay a premium for tech-enabled buildings. Our clients expect data and AI integrated in our services. It's a critical factor why they choose us. And I go back to our investments into our Spark portfolios. Some of these companies are absolutely brilliant. Their ideas are brilliant. But when they go directly to those large corporates, they will not get into the door. When we bring those tools to our clients and tell them that this is being checked and delivered by JLL, then our clients are really, really happy to use that technology, and they are comfortable with that technology. And that's why it's so important that we stay in that market and always understand what are the best new technology tools, which have been created wherever in the world. Those rapid AI advances will continue to drive innovation and new service models. And as I said, we are very, very confident that we will directly benefit from that trend.

So across those industry tailwinds, JLL is extremely well positioned. Our global data-driven integrated approach lends itself to helping our clients to navigate and simplify complex market challenges. So as we look to Accelerate 2030, we have a clear strategy to deliver long-term shareholder value. We are accelerating now our journey with Accelerate 2030, a strategy built on 6 imperatives. It's a very disciplined plan. It's a very data-driven plan and it's a plan where we will focus on our core leadership position very much by strong organic growth and here and there some targeted M&A.

And I want to start with the most important point right upfront. Our work on Accelerate 2030 demonstrated that we can continue to grow our core leadership position even without entering any new service areas. That's really important. We can continue to drive that growth trajectory, which we have delivered over the past 9 years without kind of widening the areas of services, which we deliver. We will focus, therefore, our investments on those areas which we know already very well where the risk of error is minimal areas where we already have scale, where we have competitive advantage and where we have industry leadership, it's really important, and you have industry leadership. And we will also invest in what we call strategic accelerators that create clear value for our core services.

I give you a couple of examples, Portfolio Service for our REMS clients, super important. Data centers, a huge topic, not only for our REMS clients, also for investor clients and then software and technology solutions what I just explained to you, they are all keen to get the best technology, but they want the best technology from a company they trust from a brand, their trust from a partner they have engaged with already. So that business will continue to strive going forward. And we will also focus on those underpenetrated markets where we haven't been very active in the past. We have identified those very clearly where we have significant growth opportunity.

Moving to the next imperative. Neil Murray, my colleague over there, who runs our REMS business, will present how we will deepening our client relationships to our One JLL approach, which drives resilience and value. Our plan is clear. We want to deepen strategic relationships. Think about those Fortune 500 clients. We want them all to buy 4, 5, 6, 7 services from JLL going forward. We will activate the cross-selling and we will prioritize those most important clients, most valuable clients to us. This single imperative of working with those core clients we expect that more than 40% of our growth up to 2030 will just come out of this imperative.

Next, Karen Brennan, CEO of Leasing. Most of you still know her as our CFO, will share our approach to unlocking our platform excellence as we evolve in a single unified global platform. As I said earlier, scale matters in our industry. And you can only really take advantage of scale if you unify the platform. This is a critical driver of performance, and this will contribute 35%, more than 35% of our overall enterprise margin expansion going forward. And it has already significantly contributed during the last couple of years. We are investing in our capabilities with scalability. We have a very simple goal. We want to be the most productive and efficient operating model fully unified globally within our industry.

And then we have Richard Bloxam, CEO of our Capital Markets Services. He will share our go-forward approach to data and AI, a capability we have been building for nearly a decade. And this demonstrates a remarkable progress which we have made. Because for those of you who were with us 3 years ago at our last investor meeting, 4 years ago at our last investor meeting in '22, that was presented by me here, our Head of JLLT. But now technology in AI is so deeply embedded in all our business lines, in all our functions that all of my colleagues will be able to talk fluently and perfectly about what we are doing in that space, and Richard will do that later on. You will explain to us how our unique data advantage and AI at scale accelerate our differentiation against our competitors, how it will drive productivity and how we will continue to deliver tangible results to our clients.

Our fixed imperative is elevating our people advantage. We are in professional services. We are a people business. There are 113 colleagues for JLL out there every day trying to deliver an outstanding performance to our clients. Our talent and culture are what truly drives our success. And we have world-class retention rates. People tend to enjoy working at JLL. We under -- Accelerate 2030, we will reimagine career journeys, aligning workplace work for skills. When you think about all that technology coming can be quite scary for our colleagues out there but we will train them. We will scale them and we will turn those changes into a competitive advantage. But we will always preserve the collaborative spirit and empower teams to drive change and what I want to say to all our JLL colleagues in this room and listening to us. As much as we will build a tech-enabled future we will remain a human-centered organization, and we will support everybody through this transformation.

Lastly, our last imperative, our final imperative is winning with the JLL brand. This is a very powerful strategic asset, more than 240 years of history, always under mostly completely under the same name, Jones Lang was there already when this company was founded in 1789. We added the LaSalle piece in 1999 and this is giving us -- this brand is giving us a seat at every table around the world. We are already -- our brand strength is already in the top 10 of all globally listed companies. So people know JLL when we call.

Under Accelerate 2030, we will activate this brand as a true differentiator. We will cementing our brand position. We want to be known for the intelligence, the trusted advice and the seamless execution. And so this is probably what you all waited for. This is the preview of our new long-term targets through the cycle. Accelerate 2030 will deliver organic revenue growth of 8%. Adjusted EBITDA growth of 12%, adjusted EPS growth of 16%. And obviously, we will continue with a very strong cash flow generation with a long-term average of a free cash flow conversation in excess of 80%. We will use our disciplined capital allocation to size opportunities in this volatile environment. But Kelly, how our CFO, will provide you with more detail later on.

We are absolutely excited for the path ahead with Accelerate 2030. We are scaled, we are an integrated global business, and we will focus on furthering our resilient businesses and our foundation for growth. We have this structural advantage with a leading AI platform within our industry, and we see absolutely significant opportunity for this sustained profit growth and cash generation.

So I'm coming to the end of my presentation. We will now go a little bit more into the detail for the trying to reinforce some of the logic of those imperatives I mentioned deepening our client relationships, unlocking platform excellence and outpacing through data and AI. Neil, Karen and Richard will come up here one after the other to kick things off. First colleague coming up is Neil Murray. Thank you all for listening.

Good morning, everybody. My name is Neil Murray. I have the privilege of running our Real Estate Management Services business globally. Glad to be here with you today. I'm going to try and do 3 things on the theme of deepening client relationships. I'm going to explain to you how deepening client relationships creates additional value for our clients, meaningful value. We never forget that our growth and success is anchored in creating value for our clients. I'm then going to talk to you about why I think we're uniquely positioned to take advantage and capture that value opportunity and then talk about how that will fuel our growth going forward and create shareholder value.

We're specifically going to focus on enterprise clients today. As you know, we have a full range of clients, all very important to us at JLL. And many of the principles here will apply to those, all of our clients. But let's stay focused for the purpose of this session on enterprise clients. Christian mentioned some of the stats. We're already deeply embedded with the biggest clients in the world, 95% of our top global investors use JLL services. 50% of the Fortune 500 presents -- it's fantastic stat we're well penetrated, but it also points to significant opportunity. The 70% of investor clients who buy 4 or more services. Again, that's often asset by asset. It's not across the board. It's not at a portfolio level. Only 40% of the Fortune 500 buy 4-plus services from JLL, again, significant opportunity.

On the right of the slide, you'll see on the occupier side, how we organize ourselves. We organize ourselves by client vertical by industry because there are nuances and differences. There's a regulatory environment, for example, in the life sciences world right between banking and finance, different focuses, health and safety, for example, in manufacturing environments, technical imminence for uptime in data centers. And while they are all sort of independent skill sets, they all need to draw from a similar platform or our life sciences clients of manufacturing businesses, for example, very similar to our consumer goods business and so on.

On the investor side, we work across the whole spectrum of investors from private equity funds focused on value creation to wealth funds, pension funds focused on long-term value matching. Again, those -- these things are not independent of one another, often our investors co-invest and have aligned expectations. The knowledge of serving all of these clients and client types is more than the sum of its parts is the point I'm trying to get across. It gives us deep expertise across the entire business.

What's happening out there? Scale is getting bigger, more assets under management, more allocations to real estate. Complexity, you're all living with the complexity in the world around us every day. Again, as Christian said, a tailwind for JLL. And consolidation, there are fewer players, fewer larger players. All of those trends play to our strength as an organization. This slide gives you an idea of framing the opportunity in another way. Our top 100 clients, our biggest clients, 85% of them buy multiple services across multiple JLL segments, all the things we do. But of our top 1,000 clients, that's only 41%. So we're framing the opportunity of creating value, additional value for that top 1,000 clients and moving them to the right of the chart.

The question is, though, why does that matter? Why would that create value for our clients? Why wouldn't they continue to buy service by service, geography by geography, local player, by local player? And what are we going to do to ensure that we bring the full value of our firm to bear for every client. The first point is around clear accountability. In an organization like ours with 113,000 employees around the world, our clients aren't always well organized. They have multiple touch points in JLL. So we need clearer accountability at the top of the organization at the top of our client relationships with a global view and governance that get data and insights bubbling up from all of our operations across the business and sending strategy top down.

A business like ours needs to provide global coordination for our clients, but local execution. Real estate is inherently local. We have to be at the top of our game in every single site we operate. We need global consistency and scale. Integrating experts is a key part of what we do. There are numerous specialisms and domain expertise required in everything we do. And a business of our scale needs to think about that scale element like leveraging the scale of the organization, but at the same time being specialists in everything we do. That takes a very programmatic, systematic approach to how we do what we do.

The point on shared platform, and Karen is going to talk to you more about platform in general. But this is everything. This is our ability, scale and size are not synonyms. Being a big company doesn't give you operational leverage. You have to be disciplined about creating a platform that can be leveraged across the organization. And in a world where we're producing billions of data points every single day, taking those data points and turning them into useful insights for our clients requires that platform and scale.

Let me bring it to life for you with a typical occupier client. The total cost of ownership for our clients has 3 major buckets: it's rent or occupancy costs. It's capital, moves, adds, changes, upgrading space, designing space and operations, what we call workplace management or facilities management. Around the outside, you'll see all of the JLL services that meet each of those client needs, whether it be FM or workplace management, leasing advisory services, PDS or project and development services, and they're surrounded by this layer of advisory services, our consulting expertise and data and technology bring it all together.

Let's take a big cost for our clients. Often a top 3 expense item, 5% to 15%. This particular example is a $3 billion spend for this particular client, annual spend. And this is what we're managing. And the point again is it's not enough to have expertise in all these areas. They've never been more interrelated. Your location decisions, what cities will I be in? What part of what cities? I mean it will be downtown and are going to be in Midtown, should my shared service center be in Hyderabad, should have been Pune. All of those things require advice.

Once those talent decisions and availability of talent decisions are made, how should we design our space to attract and retain the people we need to create value in our business. And there's no point in having a great space as beautiful designed, if it's not run well. All of these things have to work in sync with one another. That's what we do. And all of these things, again, are producing a myriad of independent data points that need to be sown together to provide insights to our clients.

We talk about One JLL all the time in our organization. But One JLL has to be more than just a philosophy. We're proud of the culture. We're proud of the fact that our people talk to one another, but it has to be more programmatic, more systematic, more data-led and we have to have aligned incentives to drive this One JLL culture across our business.

Let me show you a couple of examples of this notion of a client moving from single service, single region to a global deep partnership. This one is a consumer goods company, a real example, anonymized 20-plus years ago, they out-task some FM services to JLL, 600 people transfer. We do a good job. We build trust. They love what we're doing for them. At the same time, they're starting to centralize their cost operations, and they ask us to be a catalyst for change. We're imposed upon all of their business units. It was a battle. Everything is outsourced globally to JLL. Over time, you build trust with the clients. You continue to innovate. You start to capture data points and proactively provide innovative advice as to what they should be doing next. What happens, we renew off-market. The clients in the 20-plus years has never gone to tender because they see the value we're creating for them every single year.

Where we are now is in a fully outcome-based partnership, even beyond that, what we call a vested partnership, win-win. One of our most important KPIs on this account that we are measured on and bonus on is the engagement of this company's people. So our services are completely aligned with their goal of attracting, retaining and engaging talent. Investor stories a little later. Investors have bought traditionally asset by asset, city by city, and we're seeing this changing. This particular client outsourced 30 million square feet to us in 2022. They see the value of portfolio level view of the data and insights for providing them, how their business is so much more efficient to run with a single provider, providing multiple services. So they give us capital work. They give us office leasing mandates. They give us debt and equity advisory work. And suddenly, this becomes an enterprise client, not dissimilar to what we have on the occupier side of the house, and we see real path to this element of the investor business growing.

So what does that all mean? It means we have a really significant opportunity to grow our business, as Christian said, those very exciting targets we pointed to in terms of growth. We think up to 40% of it can be fueled by continuing to create additional value for existing clients and attracting new clients by what we're doing. Just to imagine a world where of that 40% of our top 1,000 clients who are only buying -- who are buying more than 5, 4 services. Imagine a world where we get that number up to 60%, 70%. Imagine a world where our investor clients who are buying 1 service, buy 4, buy 5, a world where we penetrate more of the Fortune 500, just 20% more even bit 1 service. All of this will fuel our growth.

So in summary our client relationships are built on trust. They extend beyond contractual relationships. We're extremely proud of our culture, our brand, what we stand for. It's appreciated by our clients. They trust us that give us more and more work. We never allow ourselves to forget that our growth and our success and in turn, our shareholders' growth and success is anchored in value creation for our clients.

So I'm going to use the analogy to me of data. You can't put crude oil in a car and expect it to run. It has to be refined into petroleum and that analogy is very similar to our AI journey. We've been working really hard on taking that crude oil the billions of data points we're getting across our organization and refining it into usable insight. The time is now for our clients to buy at scale across everything we do and for us to be able to create significantly additional value for them. I said earlier that scale and size are not synonyms and platform is what translates size and coverage into leverageable scale.

I'm now going to introduce to the stage, my colleague Karen Brennan, to talk to you about the very exciting topic of JLL platform.

Good morning, everyone. Great to be here with you. I'm Karen Brennan, CEO of our Leasing Advisory business. I'm going to speak to you today about how we're unlocking platform excellence. I'll talk a little bit about the journey we've been on to date. Where we're going from here? Why it's important and you should care. And then give some examples to try and bring it to life.

Let's start with the following foundation. A unified scalable platform increases the value of every business line. Our platform has been an incredibly important part of our success today. Its contribution has spanned revenue and market share growth, as Christian said, it's contributed to our margin expansion to the tune of approximately 35% of the expansion we've experienced over the last few years, it's contributed to our working capital efficiency and free cash flow and very importantly, has been a strong contributor to how our clients experience JLL and also our employees.

So what do we mean by platform? I'm going to read this. JLL's platform is the enterprise operating model that enables the right work done by the right people in the right location and supported by the right technology and processes. Sounds simple, sounds basic, but when you think about making this happen over a company that's comprised of 113,000 people in over 80 countries, that's grown up both organically, locally as well as through M&A over nearly 240 years, it takes intentionality, focus and a lot of rigor to make that happen.

Let's talk a little bit about the journey. It began in 2016 when Christian identified the opportunity to unify our businesses and our services globally in order to capture the market opportunity with our client base. From there, we have spent considerable time and made investments intentionally in various different areas. We've launched and implemented an EDP platform globally. We've realigned our organizational structure, our financial statements. We've made investments in our shared service centers in terms of the capabilities that are there. We've deployed automation and on, and on, and on. The good news is we've done a lot, but there's still significant runway ahead that we see in terms of how we can further harmonize our operations and drive things forward in this next chapter also with significant acceleration given the benefits we can capture from AI.

So what are the overall goals that we're doing for this stage from a platform initiative perspective? They're pretty foundational and have been consistent throughout. It's around continuing to improve the experience of our clients and winning more business. It's about being able to continue to grow and scale our platform without adding significant cost. We want to make it easier to work across our teams locally and globally with our colleagues, and we want to make sure we're always embedding strong risk resiliency in everything we do.

Talk a little bit about the continued platform enhancement areas. I touched on what we can do with AI. Here's where we really will continue to revisit our process and end-to-end process design globally and really focus on the outcomes we can drive data. You've heard a lot about data already today. You'll continue to hear more. The platform was where this happens and it comes together and is connected and then also being able to really tap into central specialist teams and the skill sets they have rather than recreating something that we're already doing somewhere else in a high-quality way.

So when we're doing this over this type of scale and size of our organization and the number of different service lines we provide, it's really important that we focus on what's the right level of consistency but also where do we need customization to make sure that we're delivering at scale, but in a way that is really powerful for our clients and our people. We've broken our platform initiatives into 3 different layers shown here. The first is the client service delivery layer. This is within a business segment so that a project manager in one country can be very confident referring their client to another country. and that the project management quality will be the same regardless of where they go in the company to a very high standard.

The second layer is around business enablement. So think of examples here where we benefit from common knowledge and teams, but it can be customized and tailored to a specific client or team. So that any work we're doing in research, for example, on talent migration can be used with an occupier when we're advising them from a leasing perspective as well as an investor from a capital markets investment sales perspective. And finally, enterprise operations, the backbone and foundation of our engine room in terms of HR operations, finance operations, so that someone is faced with needing to stand up a team to transition a large new account win, doesn't have to worry about having the support infrastructure and processes to make sure that we do that in a timely way and get the best talent available in the market.

Let me dive into some more specific examples by each of these client layers. The first one is around tech enabling our business to increase productivity and improve our service to clients. This example is one within Leasing Advisory in the U.S. for our tenant representation business. It's a platform we call Leasing OS, and it came from our acquisition of the company Raise that was completed at the end of 2024. This platform is a place where our people and our brokers go in for their workflows when they're going through a specific client engagement, where clients can go in to interact with our brokers as part of that transaction process. They can also get visibility to the rest of their portfolio information. And it's really helping us to improve the win rate when we showcases to our clients and talk about how we'll work with them during a transaction. It's something that, as you think about what's the outcome of this in terms of translating to our financials, it's generating the revenue growth, it's generating the client stickiness and also for our broker retention and productivity.

The next example and the next layer down is this business enablement layer. Here, I'll talk a bit about research. And so if you think about what are the ways that we can actually as a platform, amplify and combine publicly available data sets with what we have available internally on the ground and then bringing that to our clients in a way that is more tailored to what they need and the question at hand that they're trying to solve. Our research team has been a foundation of how we work with our clients over the last 20-plus years, and it's continuing to be important as we go forward in the world of AI, in a world of more complexity, where our clients want more information faster in a way that's very relevant to what they're trying to do and a decision they're trying to make. So the research platform that we have in these initiatives are proving to be incredibly powerful.

Finally, I'll talk about the final layer on the bottom, the enterprise operations layer. And here, I'll talk about how we're driving efficiency and cash flow really through operational rigor across our business lines for our order to cash process. When I say order to cash, I mean the initial contracting, the initiating of the invoice, collecting the cash and all the financial and operational metrics that go around that process which are very important to generating working capital efficiency and free cash flow conversion outcomes. Those of you who have followed us for a while have seen us make strong improvements in our DSO, and we have significant runway ahead. At this moment, 1 day of improvement in DSO is approximately equal to $35 million of working capital improvement. We'll continue to be focused on this going forward and to generate strong outcomes.

So following those examples, let's talk through higher level where the outcomes we're driving, how we're measuring it, what we'd like you to continue to track and look at going forward. The top row here really focuses on what's the impact to our people. As you remove inefficiency, as you add automation, as you take tasks away from people that they don't need to do and it's not the best use of their time. It frees up their time to focus on more value-add activities and to really engage with our -- with each other and with our clients to drive insights. We're getting a lot of positive reaction from people that we can imagine that you free up their time to do what they really want to be doing and streamline processes.

The bottom layer is about what we can see and the financials that we're looking at and the metrics we look at. The more data we have to actually track where things are working, how it's going, we can be agile and take decisions around how we continue to evolve our process and do things better. It impacts our ability to generate revenue and scale and certainly and very importantly, on the cost side. And as I said before, has been an important contributor to our margin expansion.

If you think about what are the metrics on the expense side of the equation that we are focused on and you can continue to track, it's really around the ratios that we're showing here. The first one of platform operating leverage, simply how fast we're growing our revenue base relative to our expense base. We've demonstrated strong momentum in that area, and we'll continue to be focused on that. We believe strongly that we can continue to scale our business and our platform will be a powerful enabler of that to make it happen in a very efficient way.

The second is our compensation to revenue ratio we're very focused on how to make our people more productive. That goes back to my point earlier around freeing up their time for high value-added tasks that will make them more successful and engage with our clients. And third is the fixed expense ratio. We look at our expense base overall with a mix of fixed and variable expenses and make sure that we feel we're positioned to continue to grow, but also in very strong environments and through cycle, but also in times of macroeconomic disturbance or shocks that were able to be resilient, and you've seen that, as Christian described, our ability to maintain a higher margin through shocks to the overall macro environment.

Above all, what's driving our platform goals and initiatives is really around what it means for our 3 main stakeholder groups, our clients, our people and our shareholders. If you look back over the last 3 years, we've had great results on some important metrics. We've retained 99% of our top 100 clients. We've retained 90% of our top talent, and we've generated 111% shareholder return. We're really pleased with these results, and we'll continue to have these 3 groups anchor our activities going forward.

In closing, I want to emphasize how important intertwined our platform is to everything else we're trying to do. Many things go into success. But our platform is really the springboard that unlocks the potential that is embedded in our business and our people to actually drive forward to greater success.

With that, I'm going to hand over to my colleague, Richard Bloxam, to talk you through data and AI. Thank you.

Okay. So I'm Richard Bloxam, I'm the CEO of Capital Markets, and I get the chance to talk about data and technology. I don't yet get the chance to wear the T-shirt though. So bear with me in the suit. Data and AI have been consistent threads throughout each of the presentations today, Christian, Neil, then Karen. I'm going to try and talk about today how those threats come together as part of Accelerate 2030.

Our proprietary data is expanding JLL's competitive advantage, deepening and broadening our moat. The evolution of data in our industry is a fragmented and localized systems. That is the private real estate markets in which we operate. But things are changing. Client demand, as Neil alluded to, are rising, increasing client expectations. They're telling us that data-driven decision-making is their top priority. They want better data, better insight and they want it faster. And a strategic partner who leverages this to help them see around corners. AI is both an enabler of this and accelerant. It infuses our proprietary data and then significantly augments our best-in-class people at JLL to deliver great client outcomes.

To be clear, though, our superpower is the combination of the disciplined approach to harnessing our proprietary data and a culture in the company where shared intelligence is [indiscernible] Intelligence. We've been at this a while. If you look back 10 years ago, we already focused on research and directly investing in early-stage property technology companies. Also data-driven operating models. We were learning, we were experimenting, sometimes failing, winning, but ultimately understanding what was possible, always learning. Now this led us to establish an enterprise data capability and a portfolio of core enablement products for all of our businesses.

By 2024, we had already accreted our AI foundation, known as [ JLL Falcon ]. This has enabled us to power each of our purpose-built applications even further. We're now scaling now scaling both custom and platform artificial intelligence assistance and agents across all our businesses. To bring this to life, if you think about one small piece of information provided by one individual in the organization, that creates a giant leap in the insight that can be provided to the colleagues in their business and our clients.

Our investments in technology over this period have unlocked revenue growth and supporting increasing profitability. We've bought, we've built, we've partnered technology on products that create value for our clients and our teams. We've been focusing on in digitizing our end-to-end workflow processes. And when you do that, you have a systematic way of collating and collecting proprietary data information. Examples in our business today that you will have heard about on earnings calls include Azara in workplace management, [ DLX ] our platform for investment sales, Leasing OS that Karen referred to. Corrigo and Building Engines, the latter 2 of which are also revenue generating and license to our clients. Then we have others, such as Ingenious, for our project management business. We'll talk a bit more about later, and [ DealPath ], best JLL Spark investments.

Ultimately, is the collection of these technology platforms that create a flywheel for JLL, better tools, generate better data, better data creates better insights and better insights in the hands of our great people helps us win more business and what business creates more data. We are in the data business. I'm not going to read the whole quote, but it is by being the most trusted intelligent and connected data ecosystem in commercial real estate that we can provide a seamless access to data-driven and actionable insights. This is what drives superior investment and operational outcomes. Most trusted, what data quality matters, data validation matters confidentially matters, it's everything.

Intelligent, well, raw data on its own is not enough. As Neil suggested, you can't put crude oil in a car, you have to refine it. This is our refining mechanism. And we're accelerating connecting this data across business lines, across geographies, across asset types. This is work in process. This is what's going to be delivering additional growth across our Accelerate strategy. Our enterprise data foundation and our purpose-built AI applications are helping raise the performance of our core businesses. It's increasing win rates. We see it. delivering smarter data plus human-driven insight, lead generation and improving the speed of execution. It's elevating our service levels, while simultaneously reducing the cost to serve.

Ultimately, this enhances both JLL and our clients' decision-making. I'm going to go through a few case studies to [indiscernible] that to life. But intelligence, in Capital Markets, we have $44 trillion of JLL exclusive property intelligence and $5 trillion of aggregated global bid intelligence. Imagine this, the JLL team anywhere in the world is running a sales process. We received data on bid participation, bidding dynamics, better behaviors and that all flows back into our data ecosystem. Imagine a team in London pitching for logistics portfolio sale. They are able to benefit from the information that's been provided on sales processes throughout the rest of the world, be it near Manchester to farm and buy or Manhattan.

Our teams are excellent at what they do. They have a very good understanding of their markets. They have an exceptional understanding who luckily bidders are, but this is fail safe. This ensures we haven't missed anyone. And so our teams are using this, 80% of the sales processes at JLL Capital Markets are leveraging the bio list. We then use AI driven triggers to identify future sale opportunities and debt opportunities. This is delivering improved client outcomes, it's improving productivity of our people and more importantly, it's really contributing to our improved market share.

Similar theme, but a different product. This is debt insights. JLL is the world's leading debt advisory intermediary in commercial real estate. We've developed the only global real-time debt intelligence platform. We have 100% adoption, technology platform with 100% adoption. Our teams are adding 2.7 billion of new quotes every day. It's proprietary, it's real time. Includes debt terms, spreads, lender appetite. So when a client now asks our team, what financing can I get for this asset. We're drawing on live intelligence, we no longer just tell them what we know. We can show them what we see live. That's a real screenshot.

Imagine a live real estate pricing debt pricing terminal on your desk. That's what our teams have. It's helping drive productivity. It's helping drive superior financing solutions for our clients. And ultimately, again, driving market share growth, very meaningful applications. We're launching our AI debt assistant this year, Azara AI. We are elevating service offerings through modernized and AI-driven execution and delivery.

Picture this. It's a platform with billions of data points, work orders, capital planning, health and safety data energy data, portfolio information utilization data. We provide insights to fuel strategic and operational decision-making for our clients. JLL and our clients get a holistic view and always on view of risk and opportunity in their portfolios. This is a Azara. And now we've built AI-driven analytic capabilities in Azara, driving more efficient and quicker service. We're developing genic solutions right now. This is Azara AI. Insights, which used to take months, now take minutes. JLL manages workplaces at such scale, our teams contribute data consistently and continuously. So all clients can benefit from the collective intelligence of the whole. 60% of our client accounts are active on Azara and now we have more and more clients using it directly.

And last of our examples is Project Intelligence. This is a tool for our Project Management business. It enables our teams to enhance client decision-making and to optimize their investment decisions. The foundation of project Intelligence is a partnership between the JLL Project Development Services business and a Spark portfolio company. It enables us to manage our clients' global pipeline, it optimizes the capital spend and accelerates the project cycle time by identifying risks early. It also provides, again, same term proprietary data. It drives cost efficiency, productivity and on the back of that, unique insights.

And here's what's really cool about this. This isn't just useful for our Project Development Services business. The information on capital spend, replacement costs, fit-out costs, you need that information in leasing, in tenant representation. You need that in valuation, you need that in capital markets. One small piece of data gets amplified in value when it's combined with the enterprise data.

I like this picture. You might recognize that it's pretty near here. But imagine this building and the thousands and thousands of data points created in that building and because of that building every day, building health metrics space utilization, lease proposals, tenant requirements, construction and project costs, capital spend, sales and debt quotes, none of this, none of this is public data, none. We're on a journey to capturing it all in workflow in real time.

Now imagine thousands of buildings that we're managing, that we're working on. And now take an office building out of your head and imagine shopping centers. Imagine data centers. That's the scale of a connected data system in action. So AI, we're really using it, 23,000 daily active users on JLL enterprise AI applications. That's 40% of our reimbursable headcount. In fact, I checked yesterday, it's already up another 1,000. So this is growing steadily, increasing, I expect that to accelerate. We're embedding customer assistance and AI agents across our product portfolio through 2 channels: number one, citizen driven. Tools like JLL GPT which is empowering our employees, our people with tools that make them more productive, more efficient and driving AI adoption in the organization.

Second, we have centrally driven applications, which we're designing top-down to solve particular specific processes. Here, we have one called [ Higher Body ] in our Human Resources division. It's an agent which sources screens and scheduled candidates. It's really amazing for our high-volume people business. So our recruiters there have doubled their capacity since its application and reduced time to fill by 12 days, to fill in 12 days. In fact, we have one example of 4 days, so it's getting better.

So using this slide to try and demonstrate how the hierarchy of the data works. It's a series of data sets, which together provide a One JLL intelligence layer. The base is our enterprise data foundation, company, property, people, transactions, the basic foundations of our business. Then we have a layer of our core enablement businesses and the data that, that's producing. And I gave you some examples of that earlier. And then you get to a One JLL insight. This is where you're triangulating you're bringing all those different data sources together to produce outcomes that you otherwise could not deliver. So where we are on the data journey is what gives us such confidence about our ability to accelerate the AI journey. Data eats AI. If you don't have good data, your AI doesn't work or isn't working as effectively, we get better client outcomes, deeper client penetration and growth of our people.

So to summarize, we have a proprietary data moat. That moat is deepening and that moat is broadening. Secondly, leveraging this data is enabling our scaling AI-driven applications to really drive tangible benefits for both us and our clients. Thirdly, our connected data sets unlock multiline multi-region growth and they deepen enterprise relationships. They will help us grow our wallet share. Fourthly, we have a disciplined and a measured approach to value realization of our tech spend. Our culture enables us to deploy at scale globally and accelerate our timing to value realization. Our investment in and our utilization of data in AI is critical to our long-term success. But that alone is not sufficient. Our people share intelligence. It's our culture, our teams collaborate, and this is what enables our technology to thrive and our data to be empowered. Thank you.

It's now going to be a break you'll be relieved to hear. So coffee, drinks, nibbles, all on the side, and we're very happy to talk to you during the break. Thank you.

[Break]

[Presentation]

I hope you guys had a great break, some refreshments and some food. So a lot of information, which we are throwing at you, and it will continue. So be aware.

I just want to remind you that you have on your desk something like this. One positive about it is you can see the phases of our global leaders reach out to them. They are all very happy to talk to you. But then there's also the ability to ask questions. So scan that and then you can ask questions on Slido, and then we will take your questions later on.

Now just a little story. Some of you may have heard it. I joined the company in 2005 when I was promoted into the role of the European CEO, I entered the Global Executive Board, my first global Board meeting with our nonexecutive Board as well with our Global Executive Board was 2 weeks after Lehman went down. It wasn't a great start, but it was a great experience because I learned a lot how important resilient business lines are, how important it is that you can rely on your forecast and so we have been very, very focused on growing the resiliency of all of our businesses, but obviously also very much on those which are called the resilient business lines. And we have them all across our organization in all 4 P&Ls, think about valuation advisory, think about loan servicing, think about the investment management fees in our LaSalle business. So you have them all across. But the dominance of our resilient business lines are under our REMS P&L. So we thought it's a great idea to bring you 3 fantastic leaders from our REMS business on the panel and discuss that in more detail.

So to briefly introduce our panelists, in the middle here, we have Cynthia Kantor, who runs our Project Management business as CEO. She joined us in 2019 based on Atlanta as a Head of Product Management for at the time, so-called work dynamics business and then moved on 2 years ago to become the CEO of our Project Management business.

And we have Sue Asprey Price. Sue joined us 2017 in London. She's Canadian, but she prepares to live in London. And she runs our Corporate Occupier business in Europe, Middle East and Africa, but in this role on this stage, her second responsibility, She's our Global Head of Portfolio Services, one of our strategic accelerators, which I mentioned earlier when I was on stage.

And then we have Sam Schaefer, our most recent joiner. He joined us at the end pretty much fourth quarter of 2025 based in Boston. He is the CEO of our Property Management business, and he is currently repositioning that business. This is the last business line, which we have globalized. There's quite a bit of work which we are doing, progressing really well. So great to have all 3 of you on stage. So why don't you just give a quick introduction from about yourself. Cynthia, you want to start?

Sure. So I'm a mechanical engineer. I spent my first 25 years at GE started in the technical leadership program then on to the GE audit staff, where I expanded into the business side of things. I spent the balance of my career at GE and GE Aviation, and GE Power, where I built competencies on negotiating and managing complex long-term outcome-based service agreements and then also roles in product management, risk management and then ultimately, business line leadership. I chose to leave GE and joined JLL in 2019 because I was inspired by Neil's vision of transformation and took on the current role that I'm in, in early '24.

We share a really exciting experience. We are servicing one of the very large airlines in the U.S. They invited us to kind of be in the flight simulator. So the 2 of us were flying in Airbus 350. I can tell you, I never swelled as heavily when I was flying the Airbus 350, but she was at my side, so it worked well.

It was amazing.

Sue?

Wonderful. As Christian said, I'm based in Europe, I'm Canadian. I've been in the real estate sector for over 30 years. I've been all across the board in terms of what we've been doing. I've been in leasing. I've been in development. I've been an advisory, but I also have a background in data centers. So I spent a number of years at Digital Realty Trust and was really attracted to JLL, mostly because of the vision that Christian set out around technology and investment in tech and how we were really helping complex businesses to help solve performance issues. So as a bit of a data and data center background, that vision that Christian set out over 10 years ago was a real draw for me to the business. And I've been here since 2017 and never looked back.

Sam?

Good morning, everybody. So I'm Sam Schaefer. I am the newbie here in the room. So I joined JLL at the end of 2025. So I'm 5 months in at a company that's been around for 240 years. And I'm really excited about the opportunity to be here. Most recently, I was the market leader at [ Trammell Crow ] Company, leading the New England office, developing data centers industrial, logistics buildings, multifamily. But a majority of my career was at [ Tishman Spire ], where I was the Global Head of Leasing, Property Management and occupier client services. And I ran a number of other initiatives there as well.

What inspired me to join JLL was the vision that Neil and Christian articulated about the property management business. My first job in the real estate industry almost 30 years ago was in a property management office. It's a part of the business that's near and dear to my heart. I have a soft spot in my heart for it, maybe a little bit of a chip on my shoulder because I think that it's a part of the business that offers and adds a tremendous amount of value and the growth opportunity here at JLL is profound and I'm very excited about being here.

Brilliant, Sam. Now we often hear that the outsourcing in the real estate industry is not completely well understood what it really means. Very often people think outsourcing is only janitorial services. So why don't we start there? Why don't you give us a bit of an insight? What is outsourcing in our industry really means?

Wonderful. Well, outsourcing is whether it's the owners, investors or occupiers of real estate. It's when they trust us and contract with us to run their real estate services on their behalf. I think the example that Neil gave before about the consumer goods organization where they took 600 people that were doing real estate for that organization and they moved them across to us. And then we went on a journey to really optimize real estate and ensuring that it helped enable the performance of that business. Why do companies outsource. I think the key fundamentals, one of them is obviously access to specialisms. We have the specialists and Cynthia's group and our group and Sam's group that technically maintain these buildings in a very professional way, but we also have the expertise to bring the experience.

Neil referenced that, that one client actually judges us on the experience that their employees have in the assets that we manage. So that's a big thing.

Second thing is transfer of risk. When we take on the responsibility of managing these assets, it's our responsibility to deliver that. Third is cost because we -- our business is real estate. A lot of these organizations we work with, their core business is not real estate. They want to focus on their core business and us being able to deliver at scale drives optimization for them and cost reduction ultimately.

And the last thing I'm going to say is investment. As you've heard about today, we are a company that focuses on real estate, and we are investing in tech and AI. Many organizations aren't going to do that for real estate, but they want to benefit from that investment that we're making. So we truly become an ingrained partner with the organizations we're working with. Last thing I'll say quickly, Neil talked about it, the industries that we're focusing on our core service is real estate, but understanding the needs of each of those industry sectors, whether it be life sciences, data centers, banks, understanding how real estate is part of their value proposition to their employees and their customers is a critical part that we need to contribute to. So understanding deep industry knowledge within what the outsourcing model is. That's where we're really bringing value to our clients today.

Excellent. Now Cynthia, the Project Management business is not few businesses we serve where you have to deal with the corporate clients, the occupier clients as much as with the investor clients. And then there is an element which is very much down to your business when you're fitting out buildings at the end of the day, the experience of the user. So the sea is really deciding whether that has been a success or not. So give us a bit more insight also how your business relates to that outsourcing business?

So a smaller portion of the project business is driven by outsourcing. However, construction management expertise, design expertise it's not held in great depth inside our clients, whether they're occupier clients or investor clients. And so as they continue to reduce internal teams, we will see a tailwind into the outsourcing driven portion of projects. But demand for projects more broadly is driven by the overall capital project investment globally, which is steadily growing, which is exciting.

And then in addition, demand for our services is continuing to grow because of growing project complexity, it's a more uncertain time. Delivery risk is increasing, cost pressures. It's still an elevated cost environment, and that's really lending itself to what we bring to the table, collectively, which is expertise to help our clients through that.

Sue you touched a bit about the complex time where and our clients are seeing that. We talked about that in a lot of the presentations this morning. Give us a sense of what are the big challenges that our clients are seeing? And what are we really doing to help them work through it? We'll start with you Sue.

Well, first and foremost, I think we're wired to deal with complexity. Being able to deliver consistency globally, even in times that are really troubling for our clients to navigate is number one. We did a recent client study and did a research paper that said, what are the top priorities for clients. And I'm going to focus on 3.

Number one, Christian referenced it is cost management. 73% of our clients right now, cost management is the #1 priority, and we also saw how outsourcing was going up that curve a priority. The second one is that actually cost management, but we need quality of space to enhance the performance of our businesses. We're seeing significant return to office right now, having very high-quality space as a second one. And then the third one is experience. Experience is becoming a new value driver for organizations. So I'm going to dig in a little bit on that first one on cost. Our clients right now are focused on getting a return on every dollar they spend on real estate. They want to know that they're in the right space. Neil talked about having right businesses in the right location and making sure that the space they're occupying is efficient and creating the outcomes that they need. So that is really critical. And our advisory-led approach working across JLL is really, really key to that.

I'm going to turn to Cynthia because high-quality space. Once you get the right portfolio being in high-quality space and the flight to quality is still very real, and Cynthia's team is helping us create that.

Yes, it's interesting. We talk about key challenges for clients and ensuring they have high-quality space that fits the purpose of the occupancy of that space, being in a higher cost environment, those cost challenges and then getting the space done on time. And if we just think about a large occupier for a minute and we think about all of that coming together, a large renovation it's very visible. That's the thing with these capital projects. They're extremely visible inside our clients' organization. It's a lot of pressure. It's a very high-pressure situation for our clients.

And so how we work with them as we bring our expertise to bring all of that to life for them is we pair up very nicely with our workplace management and advisory colleagues where we can then sit with a client and help them with their design. And we're working on science-led design. Our research team has been a huge help with that, great partners in that effort where we can help our clients correlate human performance with different types of spaces and different environments and mixes of how they configure a space. We then can fit that out for them and bring that project to life for them, value engineer it, so we get it done on time or ahead of schedule and at budget or below budget. And we're able to really do that quite seamlessly together in the occupier space by working very closely with workplace management with Sue's team and portfolio services. And also with our leasing colleagues when we're moving space, helping a client think through decommissioning a space and moving to a new space. We also work very closely on the investor side as well with Sam and his team.

It's interesting. I mean our industry has been disrupted in such a profound way, especially over the course of the last 6 or 7 years. And for our investor clients, the real challenge for them is being identifying investment opportunities where they can deploy capital with targeted returns then also deploy capital at scale. So they think of us really as a partner they don't really have necessarily an outsourced model because they don't actually have the in-house capabilities to be able to manage and operate real estate. So they look to us as a trusted partner because we can help them scale up and we can help them operate real estate at that level.

But the value proposition has really changed, right? So operational efficiency is supremely important. Every dollar that goes into the investment either through operating expenses or capital expenses is supremely important and measured for a return on that. And then the experience is supremely important, right? So what we do is from the inception of the acquisition of an investment to the disposition of an investment, our teams, our property management team is working closely with Cynthia's teams and Sue's teams on the occupier side are helping curate an excellent experience for our customers. Our customers are the occupants of the buildings. Our clients are the investors of the buildings. And we know that, that employee experience is really important because employee experience drives the return to office, right? We know that 85% of employees that are returning to office are doing so because they're having a good experience, a positive experience. And that's the role that we play, right?

So Sue's team gives us the information about how occupiers react to space and Cynthia's team designs and builds it for us, and it's a good example of how the One JLL platform works across the REMS platform.

I mean, clearly, just a lot of synergy between 3 business lines and probably related to what we shared before is you're showing the data with each other, which creates client value.

Shifting gears a bit, each of your business lines has been globalized in the last few years. You've launched new strategies on each of the lines. So talk a little bit about bringing those new strategies to life and what your long-term vision is.

So let's start with you, Sam in Property Management, not to put you in the spot because you're a few months in. But you've increased engagement and Property Manager to really reposition the business for long-term success. Can you share with us a little bit of that strategy for long-term success and what the key growth drivers are?

Sure. Do I have 20 minutes, 30 minutes, how much time to have? So we started -- this business was stood up as a global business in the beginning of 2025. I arrived, as Christian mentioned, towards the end of last year, at the end of 2025. What globalizing the business means is it gives us -- we're running our own P&L at this point. It gives us visibility into how the business is performing at a local level, at a regional level and on a macro level. What we've been spending a lot of time on is focusing on profitability by contract and by market and by asset class. And we've gained a really good view of how the business is performing where there are improvement opportunities and where it is, we can hit the gas poll and accelerate and grow further. So that's the first order of business is sort of getting things squared away from a profitability standpoint.

The second is growth, right? And so then the question is like how do we grow, where do we grow and when can we grow? And the first order of business for us is focusing on our clients, right? That's our structural advantage is our existing client base that we have. We serve over 3,000 investor clients around the globe, around 11,000 assets that we manage, and that translates into about 3 billion feet that we manage around the globe. If we focus only on those 3,000 investor clients, and we grow that by 5%, 10%, 15%, 20%, we know that we can demonstrate meaningful growth across the business.

What's also really exciting to me is that we have 22,000 people in the Property Management business around the globe who are incredibly excited and energized and eager to be a part of this global enterprise. That's our sales force. Those are the people that are out there that are serving our clients every single day and advocating for JLL and helping us grow our business.

It's interesting. I mean, Neil talked about and deepen client relationships to take those top 1,000 to top 100. I think you're echoing the same theme from a Property Management perspective with our investor clients as they grow and we become more portfolio heavy across.

So let's talk, Sue, you mentioned that being advisory-led is critical, right? It's critical to our successors, success with occupiers and investors. From a portfolio services perspective, could you talk a bit about your growth strategy?

Yes. Wonderful. Well, some of it goes back to what Neil highlighted on that total cost of occupancy wheel. We are finding now because of our brand that Christian emphasized, that we're being invited to the top seat of the table. We're working with CEOs, CFOs, CHROs, and heads of real estate to really determine what's the optimal footprint for them, the optimal cost, how do they actually want to work.

I'm going to give you a really quick example. We're working with an organization right now. They've got about 600 locations, mostly office. They're in 30 different countries. They've got some assets that are underutilized ones that are actually overcapacity, they want to be offshoring. They want to be doing some changes in their business model. And when I think about that, that is not a specific business line problem. That is a business reality that we are helping them solve. So we've been really focused on our consultancy side of our business to help them navigate that complexity, but using a lot of the proprietary data that Richard referenced as well to help them solve that problem. And we have a lot of their data as well. So things like we have their lease administration data, we have that occupancy data. So we're providing that advice for them.

But our secret sauce for us is being able to go and execute on that. We work very closely with Karen's team in leasing Advisory. When a piece of real estate isn't right for that organization, how do we change that? How do we acquire new with our brokerage teams and their deep market knowledge or how do we dispose a space that may not be right. So really being advisory let up at that business level being intentional with our data and our proprietary data, but then being able to execute, it's so nice to be able to say we provide the strategy, but we provide executionable strategy.

And that obviously then leads to all the other services that we can get to for those clients. So shifting to you, Cynthia, you've been CEO now of Project Development for a couple of years. There's been strong performance in that business over that time. So what has been the driver of that performance? And can you sustain it?

Yes. I believe we absolutely can sustain it. And there are several reasons why I feel that way. The first is positive market fundamentals. So we operate in many countries around the world. There are, however, 11 countries that comprise the majority of the business. And we feel good about the fundamentals of the sectors and our position within each of those geographies. So we feel good about the market.

The second reason I feel good about the sustaining results is the fundamentals, our focus on the fundamentals, and we've been working on that for several years now, bringing our team together, connecting our people, our processes, our systems all around the world. It hasn't been as much about globalizing for us as it's been about connecting, connecting everybody together and aligning ourselves, having our team come together, build a strategy, execute together on that strategy and build a strong culture of teamwork. Teamwork with our partners, better teamwork with our clients and better teamwork with our colleagues across the firm which is a really important one because there's so much growth that we're experiencing by being better colleagues with our better team, with our colleagues across the firm because every part of our business, we touch all parts of JLL. And we've been really focused on finding our best practices, finding our best ways of doing things and doing it like that everywhere.

We call it codify to elevate, running every market like our best market, running every account like our best account, having every relationship with our brokerage colleagues work like the very best relationship. And as we've been improving and elevating our performance, improving our capabilities internally to be better partners, we're seeing growth come from that. were up materially in terms of our penetration with our account clients. We're doing better at winning remits together with brokerage. And so we feel good about those fundamentals increasing as well and continuing.

And the third area for us is we've been really disciplined on our capital allocation. We have very specific strategies by country with in markets, within each country, investing in different services. different sectors, expanding our capabilities beyond the office, and we're seeing growth come from those efforts, expansion into industrial, health care, life sciences, of course, data centers and other critical environments as well.

Can I just jump in because that's -- I think that's a really important point in terms of growth because our investor clients are having to diversify, right? Like 56% of our revenues at this point come from the office sector, but we know that that's going to have to change, right? Investors aren't going to continue just to focus on office space, right? If you were an office investor, and that's what you focused on only, then you need to change course. And our investor clients are doing that capital is flowing into different markets and different asset classes. We're building up capabilities and being intentional about growing into those different asset classes. That means different occupiers. It means different opportunities for us as an enterprise in terms of how it is we service them across the platform.

And that's working across not just the REMS organization but across the -- across the entire JLL enterprise platform, leasing advisory as well as capital markets.

Yes. And I think it's also really interesting and energizing is there's still a lot of growth to be had in our core markets. Neil talked about it. We have enormous growth opportunity in our core markets, in our core geographies and with our core services. So there's a lot of growth in the office too.

We're now together for what is it? 2 hours roughly. We mentioned AI probably about 25 times but we deliberately didn't mention data centers for those 2 hours. So I have to mention data centers, it has developed to be the hottest asset class currently in our industry. And it seems to be that everybody is one of a sudden knowledgeable about it, including the Uber driver who wants to talk about data centers. So why don't you give us a little bit more background. How [indiscernible] with the topic.

As a dinosaur from data centers I'm going to talk about data centers, but to your point, Christian, who's not talking about data centers, the fuel of AI, agent AI and even cloud. We still haven't fulfilled a lot of the cloud requirements. And you talk to a lot of leaders in the industry, and we are witnessing one of the largest infrastructure builds in human history. Just to give you a perspective, our research is indicating that in the next 4 years, we will be bringing on 100 gigawatts of capacity into the data center sector.

And just to give you a perspective, that's double the capacity that exists today. So what have we done is JLL in that space? What we recognize is that the clients that we work with, whether it be the hyperscalers, the colocation providers, the enterprise data centers, the neo clouds, they wanted an end-to-end service from an organization like ourselves. They want us to help them buy the parcels of land that they're going to build. Christian talked about earlier power, power and infrastructure being so critical. Our advisory services provide that building these assets.

I'm going to say, again, building that infrastructure is really critical, commissioning those assets, being able to run them, being able in Richard's business to provide funding and debt on those assets, and in some cases, trading those assets is really critical. So we've worked really hard at creating that end-to-end capability. It's a true story of One JLL of what we are doing to bring to the marketplace.

One of the areas I'm going to say as well that we have made some acquisitions. You'll see in 2024, we bought [ Sky ]. That was an intentional acquisition to really help us expand into the data center space. One of the other areas is things like commissioning, being able to flow that into how we operate within our REMS business. We actually operate over 300 data centers globally today within our business.

The last thing I'll say, I'm going to talk at Cynthia's business again, because of that high demand for data centers, actually, the cost to deliver them is going up. On average, we're seeing about a 7% annual increase on the cost to build data centers. So where we are also really helping investors in data centers, meeting the underwritten business case that they've got signed off is bringing in Cynthia's team on that build phase of doing value engineering and ensuring that they can build these assets on time, on budget and actually do it in a repetitive way globally. So I feel really confident around what we are doing in data centers and my goodness, it's not going away anytime soon.

Excellent. So this next topic is probably on all of your minds. And so when you guys talk about all your services and we hear all the exciting things you're doing, there are other firms that provide these services as well, right? So why don't you tell us what are the competitive advantages for JLL in delivery of these services. And if I'm a client, why us?

Yes. One of the big things that differentiates us is our platform. Karen talked about it a lot this morning. Neil mentioned it as well. And we've been spending a lot of time, several years, in fact, working on building our platform in the project management business, building scale, scale that we can put to work for our clients and for our teams. And Being large doesn't mean you have scale. Neil mentioned that, so did Karen. And that's important scale, requires investment, investment of money into building the capabilities of the platform but also investment of leadership time, having all of the executive leadership team at every level lead the change and lead the deployment of the capabilities of that platform, so it takes hold in the business. and everybody gets the benefit of having put in the time and the effort to have the platform.

So what we've done in the project business is we've connected everybody together. We spent several years building a unified technology platform. We use the same technology to win our business, run our business, manage our business everywhere in the world where we operate. We also have connected processes. We have governance, we have risk management frameworks, health and safety playbooks. We have a commercial framework, that's all built on our best practices. We have the shared service centers. We've been very aggressive in that area in the project business, and we have centralized knowledge databases. And what that allows us to do the impact of that as we're delivering more efficiently for our clients everywhere we operate, we're delivering a higher quality service, a more consistent service everywhere in the world.

And then with that results in for our clients, is they have a better experience with us, and they have a consistent experience with us everywhere where we serve them and we're seeing improved KPIs from our clients. We're seeing our client metrics move in a favorable way. And what it also helps us do is operational leverage, margin improvement as well. And higher quality jobs for our people. We've become a destination for talent, which is exciting.

And just as a follow-up to that, when you put these platforms in place at scale. We talked about give the example of the Ingenious and some others previously. You obviously, been generating a lot of proprietary data, can you kind of bring to light for us some of that data and what that does for our client value proposition?

Yes, for sure. Technology and AI is huge for us. And where we started on our journey is, Richard talked about Project Intelligence. That's our platform where we connect everything together. So we having spent the time to put that in place has allowed us to accelerate in our AI development and deployment. And the way we began that is we just took all of our service delivery processes, and we mapped them down to the core element of each step in our delivery. And we found each place in that process where an agent or assistant could add value to a client or add value to us. And we've been methodically as you know, with you, developing with you and your team, those agents and releasing them into the field in phases, and it's really starting to take hold, and we like the traction that we're seeing.

And then what that allows us is as we're executing these projects. And we have over 5,000 that are in our system across 30 countries. We're generating constantly more and more proprietary data that does 2 things for us. First, it gives our team access to know-how wherever they are. So wherever in the world they're delivering service, they have immediate access to all of our know-how, all of our proprietary data, all of our best practices, all of the learnings. So if they have a question or they need to understand something, it's sitting right there next to them. And it's just like having the most senior experienced person on whatever issue you want more information on, literally sitting there next to you.

And for us, that element right there, it does -- it's interesting. It doesn't eliminate entry new career jobs or earlier career jobs. It actually enhances them. It gives our people the opportunity to get in front of clients more quickly and accelerate their career progression because they get smarter faster, which is super exciting for them.

And then that second feature of having that real-time data and intelligence that's helping us derive greater insight for our clients, more real-time analysis. We can respond to requests faster. We can respond to bids more quickly. And it's just accelerating how we operate, where the AI engine is doing a lot of the programmatic work and freeing our teams up to do that high-value advisory with their clients, which is what our clients need from us and value from us.

It's a phenomenal benchmarking data. We used to advise our clients, which again is taken from what Cynthia's team are delivering.

Sam, competitive advantage?

So our advantage, I mean, certainly, our platform and the scale that we operate is a tremendous advantage. Our experience is a tremendous advantage. I think our culture is a tremendous advantage. A lot of companies will claim to have the same thing. What I found here in my time here thus far is that I think it's really unique and very special. What I think really differentiates us in the market and what gets me really excited is tech. I think technology is a real differentiator for us. I think technology is really what's going to give us a strategic advantage in the marketplace.

One of the things that really attracted me to JLL is the investment that JLL has made in technology through [ JLLT ] and through JLL Spark. The combination of those 2 platforms is incredibly powerful. And I like to think that we're pretty far down the road on a lot of this stuff. We've yet to unlock the full power and the potential of all the technology and what it's going to be able to do for us and for our investor clients. But we're on the cusp of it, and I'm very excited about it. We're rethinking about how it is we deploy technology and how it is we use it, probably most importantly, how it is we interpret that, what insights we can offer to our investor clients. What we can learn from it about with property intelligence and how it is we operate these investments on behalf of our clients. And that's, I think, what really sort of sets us apart.

There's a lot of talk about technology and building a moat in a defensible tech stack, which is nice. I like to think of it as we're gaining distance between ourselves and our competitors, right? I want to get further down the road, create more daylight and advance more proprietary software that's going to allow us to continue to accelerate and grow the business. And I think that's a real differentiator for us.

Great. So final question, thinking down the road, right? Put on your 2030 hat and tell us what's the future of your business in 2030? How is it going to be different?

Yes, you want to start this one?

Sure. Yes. It goes back to the competitive advantage. For me, it is our coverage. Christian put up a map of where we see our enterprise clients and we are in all of those locations, and we provide the outsourcing services that we talked about. Our proprietary data for us in the portfolio space, it's leveraging the data that is in Azara. We are putting a new module on that called our portfolio Navigator, which is taking that data combining it with client data and then market data as well.

And similar to what Cynthia is doing, we are now using agents to do what traditionally strategic consultants were doing of just doing portfolio optimization, that's becoming real time. Taking that insight to our clients and allowing them to execute quickly. I'm going to go back to one of the huge opportunities as One JLL. So as far as I'm concerned, 5 years forward, we're continuing to drive that competitive advantage for the top enterprise clients that Christian referenced earlier, and we are a true partner of choice for them going forward, and we're using data insights to drive real-time decision-making.

I think the Property Management business in 5 years is transformed in a fairly dramatic way. And I think AI and technology is going to accelerate a lot of that and get us to that point. We're in the business of solving problems most of the time, right? Nobody picks up the phone to call us and tell us that they had a great ride on an elevator. They call us and tell us they had a bad ride on the elevator, right? AI is going to help us understand and anticipate and technology is going to help us anticipate when problems are about to service or when they surface. We can solve problems faster, but we still need humans running these buildings. The buildings aren't going anywhere. People still need to occupy them. The human experience matters.

So I think what you're going to find is that we're going to be operating these buildings much more efficiently, and we're going to be able to offer a much higher touch point, a much better experience for our customers and a better outcome for our investor clients. We're going to drive occupancy. Occupancy drives retention. Retention drives value, that makes investors happier, makes our customers, our tenants happier, and I think that, that's the point that we get to in 5 years, if not sooner.

I was with a client the other day, Sam and I were with them. And they said the future is AI, which is freeing up cost to invest in experience. So I think that human and the human element around experience is so critical but it's the AI that's advancing that isn't it.

Yes, absolutely. And in the Project Management business, it's -- in 2030, it's going to be far more consolidated, and we're seeing that happen. It's far more professionalized as technology continues to accelerate in the space, it's a much more elevated professional service that we provide a far more tech-enabled in an industry that historically has been very fragmented, 3 guys or gals with a computer and a garage can compete with you for a project. And it's just -- it's a different environment in 2030. It's far more sophisticated.

Great. So I'm supposed to end this panel with a couple of reflections. My first reflection is Christian has a way better sense of humor than I do, and it's going to be hard to catch up, and I hadn't learned that in the last 9 years.

The second reflection I have is I'm the only one who gets to wear a T-shirt. But luckily, as contrast to the last Investor Day, I have to say very little about data technology and AI because everybody else here is completely on board. And I think that is a seriously a fundamental shift and something we've worked really hard as a team to make happen, and I think you're seeing that manifest itself.

But otherwise, if you really look at all 3 of these business lines, it fits with our deepened client relationships. They're working together to expand the portfolios and expand enterprise relationships. And obviously, they're using both platform and data and AI to start differentiating their business lines.

So with that, and on the topic of AI, I'm going to introduce a little video that features our CTO, Yao Morin, talking about AI. Thank you, everyone.

[Presentation]

Hello, everyone. It's great to see you all here today. It's nice to see some familiar faces and to meet some new people. For those of you that don't know me, my name is Kelly Howe, I'm the Chief Financial Officer here at JLL. And I think this is going to be the most exciting part of the day, but I'm biased.

Christian shared with you some of the secular growth drivers that we're seeing in our industry, talked a little bit about JLL market momentum we have, financial momentum we have. We've shared with you Accelerate 2030 and the key imperatives associated with Accelerate 2030. And hopefully, you have a little bit more insight into our -- some of our resilient business lines and our outsourcing business.

There are 3 things I wanted to cover today. So the first is to just talk a little bit about the financial journey that we have been on and the foundation that, that creates for us. The second would be to talk a little bit about Accelerate 2030 and what you can expect going forward from a financial perspective. And then the third is, of course, to talk about our capital allocation strategy. and our value creation framework.

So let's start with the first topic, financial foundation. Christian threw this slide up here at the beginning of his presentation, and I think it's really important. It's what underpins all of the financial modeling that we have done and why we're so confident that we can deliver on the plan we've put together. We have, over the last decade, really invested a lot to build a very resilient foundation, both in the market with our large market positions, our integrated service offering, but also the investments that we've made on our side around platform. We have a really strong financial profile, which I'm going to share a couple of data points with you as we get into this. But most importantly, we have an investment-grade balance sheet. We've got very strong cash generation and cash generation potential, and we've got a disciplined focus on capital allocation.

And then finally, which you've probably heard woven through all of the conversations today, we've really created a structural advantage in our industry. We do have a tech-enabled proprietary data advantage, which we are leveraging. We have global scale and scope. We've got a unified global platform. We've got a culture that is supporting all of this. All of those things work together to create really truly a structural advantage.

So let me share a little bit of data. If you think about where we have been since 2016 from a financial performance, we've grown our revenue on average annually, 8% per year. We've grown our EBITDA 12% per year and we've grown our adjusted EPS 15% per year. That's a pretty incredible track record. Over that same time period, we generated over $5 billion in free cash flow. Today, we have ample liquidity, almost $4 billion, and we're operating with very low leverage. If we dive into growth for a minute, and we've talked about growth today, but if we look at growth over the last 10 years, our average growth, as Christian noted, has outpaced GDP by 3x over the last 10 years. Our resilient business lines, which you had the opportunity to learn a little bit more about earlier today, are now 80% of our business. And you can see from the 2020 and 2023 kind of more difficult market years, we recovered very quickly because we have created a more resilient business.

The other thing that I would like to point out about this growth is that it's almost all organic with the notable exception of our HFF acquisition, which built out our capital markets business line, which we did in 2019.

Karen talked a little bit about our platform earlier today, and we've made really meaningful investments in our platform. We believe those investments are delivering value. Our EBITDA margin has expanded by 340 basis points over the last 10 years. That's on average 40 basis points per year. How did we do it? Well, we invested to create scaled businesses and a full portfolio offering that has depth and breadth. We globalized our business lines. We do not always operate on a global basis. We globalized our business lines, we put global leaders in place. We made the investments so that we could invest in people, process and technology. We developed a shared service capability that now represents 12% of our total workforce. That's been a very important part of our platform journey. And we believe we are now poised as a result of the technology investments that we've made to really drive productivity gains, meaningful productivity gains with proprietary data, end-to-end processes and AI. So we think there is more runway on this platform journey.

Let's talk about profit. We have grown our adjusted EBITDA and our EPS pretty consistently over the last 10 years. You can see again here that even in the more challenging market years of 2020 and 2023, we delivered reasonably strong adjusted EBITDA and EPS. Both of those metrics ended at record highs in 2024, 2025 -- sorry, not 2024, with adjusted EBITDA hitting almost $1.5 billion. Like I said, that represents 12% annual growth since 2016. And our adjusted EPS was [ $18.80 ] in 2025, which represents 15% average annual growth since 2016. Christian noted that in 2025, our adjusted EBITDA margin was 16.2%. That was an important milestone for us, achieving the midterm target that we set for ourselves in 2022. The important thing for me as I think about our revenue growth, our EBITDA, our earnings per share, is that what we've really done is built a very sustainable operating model that is consistently delivering value year-over-year.

Let's talk about cash flow. We've delivered over $5 billion of cash flow over the last 10 years. That's an 83% cumulative cash flow conversion rate. Also, pretty good. Our business model is capital light. We've worked hard, as Karen noted, to improve working capital, and we've made improvements there.

We think we have more opportunity. And we've been really focused on making smart investments.

Our balance sheet is investment grade. We have a leverage ratio of between 0 and 2x. We've operated pretty much within our target range every one of the last 10 years.

An investment-grade balance sheet is really important to us. It's really important for us as we serve our enterprise clients, particularly in our workplace management business. So we work hard to maintain that investment-grade rating.

Today we have almost $4 billion in liquidity and, like I said, a very low leverage ratio. This provides us, if you think about this as our starting point, with the agility to weather market headwinds should they come, but also to be able to make the investments that we want to make, whether they're organic or inorganic, in our business.

So I am a numbers person. I get really excited about the numbers, as I think probably many of you do, and I think that's a pretty fabulous story. But the thing, as we've dug into this, that I think is even more exciting is that we put all the pieces in place underneath to really, like I said, create a sustainable business model that not only has delivered results, but is positioned to continue to deliver results.

Our organizational model is now a global -- is globally aligned now to meet the needs of our clients. As I noted, we were not always organized this way. We have organized this way now to meet the needs of our clients. We have really strong leadership in place across those global business lines. You saw some of them on stage earlier, and there are a bunch of people in this room, and hopefully, you'll be able to stay for lunch and get to know our leadership team better.

Our client value proposition is now an integrated global service offering that is targeted to both investors and occupiers, as you've heard us talk about today. And it's delivered in an integrated way through our global infrastructure.

Our business mix is more resilient than ever. I think you've heard us note several times today that 80% of our revenue is coming from our resilient business lines today.

Platform. We've talked a lot about platform. Our platform is a global platform. It's a scalable platform. It's even more scalable now with technology, proprietary data and AI embedded in the delivery of our platform. We think it's going to continue, as you've seen it already has, continue to drive efficiency, but also differentiation in the market.

Finally, our financial profile is strong. We have structurally higher margins. We have very strong cash generation and cash generation potential. And we've got low leverage with high liquidity.

The results: resiliency, scalability and agility. Those are the things that give us confidence that we can deliver on Accelerate 2030.

Okay. So we just talked through the journey we've been on, our strong financial position. I want to talk a little bit about Accelerate 2030 and what you can expect going forward. You've heard Christian, Neil, Karen and Richard talk about Accelerate 2030 and the core imperatives associated with our strategy.

First and foremost, we are prioritizing our core business lines for growth. We've got great market positions and scale-sensitive businesses, and we will invest there to grow those positions.

Second, you heard Neil talk about clients and, specifically, enterprise clients. We have the market depth and breadth to be able to serve those clients. We've got the full scope service line offering, and we've got the investment-grade balance sheet.

One of the really exciting things about our enterprise client strategy is that investments that we make to serve our enterprise clients actually serve -- are able to serve our full client base in a really synergistic way, and we can do that at high incremental margins.

Third, our scalable platform, which you heard Karen talk about, will continue to deliver operating leverage and market differentiation. And finally, our scale, industry expertise and technology investments provide us with a proprietary data and AI advantage that we think reinforces our structural advantage.

You saw these numbers earlier, Christian put them up there. As we look forward, we believe that we can deliver, on mostly an organic basis, on average through the cycle, 8% revenue growth, 12% EBITDA growth -- adjusted EBITDA growth, 16% adjusted EPS growth, with a free cash flow conversion ratio of 80% or more. And we will do that maintaining leverage within our 0 to 2x range.

I think it's worth touching on our business segments and how each of them will contribute to Accelerate 2030. Our Real Estate Management Services segment, you've met several of the leaders from that group just a minute ago, serve our largest enterprise occupier and investor clients. They serve those clients with a very compelling outsourcing, project management and technology-enabled value proposition. Again, I think our leaders articulated that very well in that last panel.

This business segment delivers consistent growth and resilient growth. And it does it with a scalable platform that helps drive margin expansion. We think the global infrastructure, full-scope offering and investment-grade balance sheet will be critical going forward. We also think that there are continued industry tailwinds in this space, and we are uniquely positioned to compete and win.

Leasing Advisory is a business that has delivered growth and has become more resilient over time. We've observed modest EBITDA impact when macroeconomic conditions shift. Leasing Advisory serves both our occupier and investor clients as well. We think there are more connection points -- more opportunities for connection points with our Real Estate Management Services business as well as our Capital Markets segment. We expect Leasing Advisory to continue to grow relatively consistently given structural tailwinds, consolidation in the space and investments we are making around intentional client segmentation strategies and market share growth. This business delivers strong incremental margins in the 30% range.

Capital Markets is a segment that serves primarily our investor clients with connectivity to our property management business as well as our agency leasing business. It's a bit more impacted by the macroeconomic cycles, particularly capital flows, but we believe we are relatively early in the post-pandemic recovery cycle and that there are tailwinds in this space for the coming years. We have a meaningful proprietary data and technology advantage in this business segment that has allowed us to gain share -- to steadily gain share.

Our platform in Capital Markets is also very scalable. Incremental margin delivers high incremental -- sorry, high incremental revenue delivers high incremental margins, in the 35% range, depending on the business and the geo mix from year-to-year.

Our final segment is Investment Management. This is a little bit smaller of a segment and has been flat over the past 5 years, but we believe it is now at the bottom of the cycle. We've revamped our strategy in this segment. We've installed new leadership. We're focusing on institutional and high net worth investors with credit and core strategies. As we increase fundraising and deploy capital, we expect to grow our advisory fees in the coming years. Incentive and transaction fees are an important part of this business. And while they're lumpy, they are delivered at very high incremental margins.

So how does this all come together? This is a symbiotic integrated portfolio with a strong operating model that reinforces our structural advantage. It delivers consistent growth year-over-year. If you look since 2020, it's been very consistent growth, with the exception of 2023, which was a very challenging market environment. 80% of that growth has been resilient. 96% of it has been organic since 2020. Has an expanding and resilient margin profile with very high cash generation potential. We think this sets us up well for Accelerate 2030.

So what should you expect from Accelerate 2030 as we move forward? Well, we've noted the 8% expected revenue growth on average through the cycle. We think that that will be largely organic. And if you break it down and look at Real Estate Management Services, we expect that business segment to continue to deliver in the high teens revenue growth with EBITDA margin growth in the low teens.

We expect Leasing Advisory to deliver mid to single digit -- mid to high single-digit growth with incremental margins in the 30% range. We expect Capital Markets, which I noted is early in the cycle still and has more potential variability year-to-year, to deliver revenue growth in the high single digits. And again, very attractive incremental margins, which depend a little bit on geo and business mix from year-to-year. And finally, Investment Management, we expect to grow at mid-single digits with upside from incentive and transaction fees.

So those are our financial objectives for Accelerate 2030 and what you should expect moving forward. We've covered foundation, Accelerate 2030, so the third topic I want to talk about is capital allocation and our value creation model.

So I hope we've been very consistent around our capital allocation priorities. There are 3 pieces to our capital allocation priorities with what we view as productive tension across the 3. The first is organic investment for growth and margin expansion, which will continue to be our top priority. We will invest in our businesses and our business positions. The second is capital return to shareholders, and the third is strategic M&A. I will talk about those 2 in a minute.

I think our objectives are also worth reiterating because it's very important. It's what guides our decision-making as we make trade-offs. We are looking always to be strengthening our competitive position. You heard about the competitive positions that we have in the markets where we operate. We will invest to reinforce and grow those competitive positions. We want to reduce variability in both revenue and margin.

We are looking to optimize capital returns. This has been an area that we've been focused pretty intensively on over the past couple of years and will be an area of continued focus for us, all, like I said, while maintaining an investment-grade balance sheet. We'll do this with a through-the-cycle lens because we want to make sure that we're set up to be resilient and agile.

So our plan is built largely on organic growth. We think that that's actually benefited us. However, M&A, disciplined M&A, can and will play a role. We are interested in M&A where the strategic fit makes sense for us, where it helps us to build scale since we operate in scale-sensitive businesses, where it helps us to increase resiliency or where it fills an important capability gap.

We are looking for M&A where the economics are favorable, where we can underwrite good return on capital. And very importantly, where we think we can execute. We're always looking where we can find good cultural fit and acquisitions that we can integrate into our platform.

We have 2 case studies. Both of them have been referred to today, but they serve as good models for what is possible for us going forward. SKAE, you heard a couple of people reference, was an acquisition we did in early 2024, a data center outsourcing and project management company, that when we brought it together with JLL, put 2,500 combined technician -- data center technicians on the ground. It helped us with a very important market that we are addressing, and we were able to integrate that business fairly easily into our platform.

The second, Karen and others have referenced, was a company called Raise, which we've now -- we now call Leasing OS, but it was called Raise. We acquired that at the end of 2024. Raise is a leasing brokerage firm with a technology-enabled workflow tool that has allowed our brokers to be more productive, get better win rates in the market and, importantly, help us to collect critical data sets. Also integrated very easily into our platform with kind of rollout and adoption, frankly, exceeding our expectations in that case.

So we're pleased with both of these acquisitions, and I share them just as models for the kinds of things we're thinking about.

Okay. Shareholder returns, very important. We have, over the last 10 years, delivered $1.5 billion of shareholder return. $1.4 billion of that has been in the form of repurchases since 2020. That represents, that $1.4 billion, represents about 50% of the free cash flow we generated during that period. And you will also note that we have reduced our share count during that time by about 9%.

As a commitment to continuing to return capital to shareholders, we've recently expanded our share repurchase authorization to $3 billion. That's an incremental $2.2 billion, bringing our share repurchase authorization to $3 billion. And we're also announcing an accelerated share repurchase program today worth $200 million, which will be effective imminently.

If you put the accelerated share repurchase plus the nearly $75 million of shares we've already repurchased year-to-date, that puts our total year-to-date number at $275 million, which compares with the fourth quarter of 2025 at $80 million and full year 2025 at $212 million. Returning capital to shareholders is something that is very important to us. The exact amount will vary from year-to-year depending on the operating environment, depending on our outlook for leverage and also contingent on investment opportunities and where we make trade-offs.

Okay. So bringing it all together, I hope that we've given you confidence, the same confidence that we feel that we have an operating model and an operating system that can deliver Accelerate 2030 and that it will create a compelling long-term value creation framework. We have a plan, we have an established operating model to deliver organic growth in addition to margin expansion.

The Accelerate 2030 imperatives that we talked about today are to accelerate our core market leadership where we are advantaged and have runway to grow, to deepen client relationships, particularly the enterprise client relationships where we are uniquely positioned to win, to deliver on platform excellence, which we believe, and you have seen in the data, delivers operational leverage as well as differentiation in the market. And finally, to accelerate through data and AI, which further reinforces the structural advantage we've spent the last 10 years and more building. The secular tailwinds further support our growth and the operational excellence that we've instilled into our operating model will further support our margin expansion.

We're building -- so I guess another point I would say is what else are we focused on? That's the operating model, the revenue and the margin expansion. We will also be thinking a lot and working on cash generation. We have a set of very highly cash-generating businesses. We think we can do more. We've got strong quality of earnings. We've made a lot of progress on working capital with more room to go. And we're focused intensely on where we actually invest our cash to make sure we get good returns on those investments.

The other thing that we are intensely focused on, we have been for the last couple of years and we will be going forward, is around disciplined capital allocation. We, like I said, are very committed to returning cash to shareholders, but we will also invest to build our business, both organically and inorganically, and we will take those investments very seriously and with rigor.

So what are we doing? How do we bring this together? We're building on what we've created over the last 10 years. We're increasing resiliency. We're strengthening our competitive position. We're sustaining our margin expansion, which we fundamentally believe we can do. We will generate cash. And we will optimize our returns on capital. That creates a pretty compelling value creation framework.

We went through it before. I'll say it one more time. On average through the cycle, 8% revenue growth, 12% margin growth, adjusted EBITDA growth, 16% adjusted EPS growth with a free cash flow conversion at 80% or more through the cycle.

This plan, when you put it together, we will -- we expect to generate almost $6 billion in cash. That, of course, is contingent on no major market disruption. We will use that cash to make smart investments in our business, to build our business, to optimizing return on capital, and we will also be very active on our expanded share repurchase authorization.

Okay. That was my final slide. And I would just like to say in closing, I think it's been a great day. I hope you all have learned a lot about JLL. For those of you that didn't know us well, for those of you that have been with us for a long time, hopefully, you learned something new or you had some points that you've been kind of watching reinforced.

We talked a lot about our clients today who we are grateful to every day for placing trust in us to help them optimize their commercial real estate outcomes. We've got 113,000 employees around the world who work every day to deliver our value proposition. And I would also say thank you to all of you for being here today, for investing to learn more about us, to ask the questions when something doesn't make sense to you or you want further clarification, and for continuing to believe in our value creation potential. Thank you.

All right. Well -- oh, sparkling water exploding to kick off the Q&A session. Exciting. Well, hopefully, all of you have seen the QR code on the leaders sheet in front of you. So we are encouraging everyone to submit questions where they have them. And again, we are taking and we'll take as many questions as we can. And for everyone joining us by live stream, please submit them through the Ask a Question section of the live stream.

So I'm going to kick off with one question, which we get a lot and we talk to a lot of you about frequently, which is how the competition for producer talent has evolved. And if we can address any trends in our retention rates and what we're doing to attract and retain talent.

That's great that this question made it to the top of the list because it provides me with an opportunity to bring Laura in. Laura is one of the backbones of that global leadership team, our Chief HR Officer. So Laura?

Thank you, and thank you for having me. I think there's a few things that really make our producers stick to the organization. First, I would say they gain a huge amount of benefit from our platform. So all of the data and everything that you've heard today around the AI, the technology that we provide them, they see huge benefit for.

What drives that benefit is really our culture, and we've talked about that today. So that idea of information sharing, and not only sharing within the business line of Leasing Advisory, but across the business, is a huge advantage to them about the knowledge that they'll gain.

And then more recently, we've been very intentional about starting to bring equity into our senior-level producers in what we call the [ Mini-Mo ]. We believe that increases the retention rate and also gets them aligned with the full-on enterprise.

I would just call out, and I'm sure some of you noted this during the presentation, I expect it was actually part of the basis for the question, that if you look across our total producer population, over the past 3 years, our producer retention has been 93%. And the average tenure of that producer population is 9 years.

So to the points Laura was making, I think that reiterates some of the high retentions and tenure figures that are a reflection of some of the strategies that we've been deploying as a firm.

We have a related question, and I think this in part goes to the presentation that you gave earlier, Neil, which is, what changes have we made around structure or producer incentives to drive better cross-selling across JLL?

You take it?

Yes, I'm happy to jump in as a start. One of the things that when I -- when you ask the teams what makes them come together and really show the full power of One JLL, they just say simply, we win more, right? When we go into pitches and we have a collective view, we're showing up as a team and we can solve all the problems in one go, that's pretty compelling. So that's certainly been an element. And it's about building the connectivity within the teams and how they are not just pitching together, but actually executing together, that will come through. And then as those muscles are built, really generates a really strong flywheel.

I would just add, if I may, I try to refer to it as I kind of cantered through in 12 minutes deepening client relationships. But the structural changes are real, the interconnectivities between all of our service lines that the clients expect from us are very real. If you're not integrated with every part of your organization, if clients are not buying that way, they're leaving dollars on the table. And so from our perspective, I think the market has come to us a lot. We need to make sure we get out of our own way.

I mentioned the trade-offs that organizations like ours make between scale and specialism. And it's all brought together by culture. And the culture point is hard to measure, I'm sure, for you all, but it's really, really important. This notion of One JLL flows right through the organization, through every producer and through every frontline engineer because we talk about it every single day. So yes, the structure and culture, and I think those things have to work in harmony together.

Yes. And we have clear processes too. So we don't just leave it hanging there. There are clear articles of collaboration, fee sharing guidelines to systemize and operationalize how we recognize value add in the organization.

I want to transition to the technology topic. I appreciate there are some technology questions before AI questions. I'm sure those will come through any minute. When you look across the entire tech stack, which products are you most excited about?

No bias, team.

That's like asking me which of my children I like the best. But I'm going to use that and pivot a little bit because you said technology, and I'll talk about AI because that's what I'm generally most excited about.

I think there are 3 ingredients that we need to be successful with AI to really create value. Ingredient number one is you have to digitize all your workflows. And you've heard that throughout from all these folks, right, when Karen talked about Leasing OS. We've got Corrigo. We've got Ingenious in the project management business, our building engines in property management, I can sort of go on. All of these products have 75% plus adoption, 100% in some cases, like debt insights in Capital Markets. That's been 5 years of work.

When you get to that, you get to the second ingredient, is all of those digitized workflows are producing proprietary data at scale, the billions of data points that you've heard about, right? And then as Richard said, AI eats that proprietary data. And when it eats that proprietary data, it creates all the insights that create value, second ingredient.

The third ingredient is sort of a softer thing that we've alluded to a bit, which is you fundamentally need a cultural shift in your organization where you don't have a technology organization and a business line organization. They need to be completely intertwined, sort of in a symbiotic relationship, in order to succeed with AI. And I think we've spent the last 5 years practicing that motion and to get better and better at it, which positions us perfectly for AI.

So if you look at a lot of our AI teams, it's a combination of technologists and business line folks all working together to iterate. I don't think that's something we could have done 5 years ago. And that's exciting.

I have a follow-up question related to it for the group, which is, what are you doing to protect all the proprietary data that JLL has created and the advantage that has come with it?

I think you should take that again.

Well, I think that the first step is that we've created and invested in the last 5 years an enterprise data architecture and a platform where we can take all that proprietary data and really store it, right? But I think the key is, and Richard was talking about this in his presentation, is it's because we participate in so many transactions across so many properties, manage so many millions of square feet, we're going to keep generating that proprietary data at scale.

There's very few companies in the world that can do that. As long as we do that, that's our data. We protect it, we own it. And we apply it to our AI, but we don't share it externally. We only -- to use Neil's analogy, that's the crude oil. We then derive the insights on top of that crude oil for our clients and for our benefit.

I'll just add, the 2 elements protecting our data, there's obviously the cybersecurity dimension, which appears to be the only cost that we're not getting any operational leverage from every year, after the cybersecurity spend. And sorry, it's true.

We try. We try.

And beyond that, in order to own this data, you have to be the company that's transacting, that's executing the work order, that's doing the fit-out, that's advising on the debt or recording underbids in Richard's business. Like it's proprietary because we're doing the work, and the data is not available to those who aren't. So the continuity of our business is creating new proprietary data every single day.

JLL has 113,000 employees today. By 2030, how many employees and how many AI agents do you think the company will have to meet your financial objectives?

We have to look into the glass house or what is it -- I have to explain here that we have 2 types of employees. We have a very large set of employees which are working client side and which are reimbursed by our clients. And so the more clients we win, that number will grow.

And then we have those employees who are within our offices. And when you look at those, if we continue the organic growth path, which we have shown over the last couple of years, I expect that number to be pretty much the same as we have today, because all those technology tools will enable us to significantly increase productivity per employee. So that number will not grow.

Now the question on the AI agents, I pass that on to Mihir again, but where I would start with is we have to be very careful how we define the word AI agent. Is it something which you are kind of creating by using Claude or OpenAI and you get a little kind of app for yourself. Is that already an AI agent? Those are thousands. We are releasing thousands that we would define AI agents slightly differently. So I pass that over to Mihir.

Yes. And I think as Christian is saying, there will be thousands because an agent -- the definition of an agent is just something that can complete an autonomous task. But our philosophy on AI, if I look out 5 years in the future, is we've got personas of folks that do a particular task, like a facility manager or a project manager, a property manager.

I think each of those personas are going to have an AI teammate. I'm going to call it an AI teammate. And that AI teammate is going to work with them and have a bunch of agent capability allowing us to do those services at the highest level of client outcomes, with the best insights and with the highest efficiency. And that's how we think about the world.

I would probably add, I think we're really leaning into AI with our people. So teaching them the fundamentals of AI, as Mihir just said, giving them the technology and the tools to make them more productive. And then the last thing we're doing is trying to predict, okay, what are the future skills that they're going to need and how do we equip them with that capability?

So one follow-up on a related topic. As AI creates industry-wide productivity gains, do you expect that JLL will see fee compression while maintaining or increasing win rates?

Well, this is a question which is actually asked very often. And I would say we are currently at a moment in that evolvement of technology and AI where you can really create a competitive advantage and you are creating enormous additional value to your clients. And usually, if there is only a very few companies who can create this competitive advantage, with this enormous additional value to their clients, that allows you to actually raise your fees.

And so at the moment, we are honestly not particularly concerned about fee compression on the back of technology and AI. We see more opportunity to deliver additional value to our clients, and our clients will honor that with a fair kind of divide between that value which we are creating between them and us.

Let me just add to that a little bit. I mean on the REMS business, we have -- we haven't got a single client who asks us to find ways to spend more money every year for them, right? Every single client has a savings glide path, what we refer to as our gross contract costs, the pass-through. All the things we manage on their behalf, we have to reduce year-on-year. We do that for a living. So to Christian's point, it's -- when we do that well, it's opportunity for more fee for JLL, not less.

So I want to shift a little bit to the business lines and the business line strategies. Can you provide some additional information on how the strategy applies to each of the business lines at a more granular level?

Richard, do you want to kick it off?

Sure. I think Accelerate 2030, it was both a top-down strategy, but it was also born in the business. It was through our experience, through our interactions with our clients, through our experimentation with technology and data. So it was very much a dual process.

So I think, first of all, readiness for 2030 in each business line is high. I think specifically, if I look at the Capital Markets business, we have our core business, we are in investment sales and a debt advisory business of scale, the largest debt advisory business in the world in real estate and the second largest investment sales organization in the world. We believe we can significantly grow those businesses.

And the reason why we're so confident about growing those businesses is because we have a data and technology ecosystem that's enabling our producers, our advisers to be more productive to meet more clients, to identify more opportunities. So there, I've got the core growth strategy and data and AI.

We do great work with our investor clients. We have great relationships with our investor clients. But as Neil pointed out in his presentation, there's low-hanging fruit. We're still not capturing that fifth additional service. We have a derivatives business. We are -- we have an opportunity to cross-sell more often.

Within the business line, every investment sale we do, the debt advisory opportunity exists. So I think we feel very confident with our clients about creating that clearer value proposition that we work more collaboratively and more effectively across the business lines with our colleagues in -- on the investor side with Leasing Advisory, with property management and project development services. So we believe in the deepened client relationships, there's a big unlock for us.

And we can't do any of this without the platform that Karen described. We have to build clients. We have systems that require delivery. We have people to pay. All of these things get done more efficiently when I've got our platform working properly. So that would be a little illustration of how we're embedding the 2030 strategy in our business.

Karen, do you want to continue?

Sure, I'll talk for a minute on Leasing Advisory. So if you think about what does accelerate the core mean for Leasing Advisory, you have 2 primary business lines. We have our -- when we work with our occupier clients and our tenant representation, Leasing Advisory, and on the investor side, our Agency Leasing Advisory.

And what we've done is mapped out in the major markets in the world that we want to be operating in what is our share -- market share relative to the competitive set. We strive to be #1 or #2 in every market. And we've looked at this now across property types, also transaction sizes. If you think about breaking up in a market, right, transactions over 100,000 square feet, 50,000 square feet, 20,000 and so on. And then looking at those cross-sections and where we want, we have opportunity in white space where we can go faster and take more share.

Importantly, we look at the distance between #1 and #2, when we're #2, and look at the size of opportunity there relative to the rental rates in that market and most of the high-value markets and are circling those to go after.

If you move to then what is -- I won't go through all the pillars, but if you move to the deepen client relationships, tremendous opportunity there as we look across what we can do together with the Real Estate Management Services teams as well as Capital Markets. And so really leaning into, again, I've mapped out, right, where are we amazing at this and the muscles are very well developed and where do we have some room where we can reinforce this, and build out some more of the rigor with our teams.

And so still the first year in this business, but I have to say that looking across the opportunity set, I'm very excited about what I see and the talent in our teams to be able to go and capture that and deliver it.

Do you want to add anything, Neil?

No, just -- I guess just that we built this strategy together. And Christian and I know you talk about this, for the first time, with real deep data on every market we operate in and everything we do. And maybe we didn't have that 10 years ago when it was beyond...

We didn't have that 10 years ago.

And so these are not sort of hunches or beliefs. These are like anchored in real data, that if we do these things well, if we stay true to who and what we are, to our culture and turn the dial, being programmatic, systematic, data-led with aligned incentives across everything we do, we're going to achieve some special results.

I think that's a very important aspect. When we did the Beyond strategy, the real estate industry was very much a thing-in-the-air industry, roughly this. And there was a lot of gut and instinct. What we have achieved now, this strategy is not gut and instinct. This strategy is based on complete facts, data-driven. We analyzed it. We can see exactly where we need to grow, what we need to do. And so that's why our comfort going forward is so strong with this strategy.

One related question. So we talked a lot about our scale advantages. When we look at the long tail of the markets that we participate in, what are the areas where we have the greatest opportunity to gain market share?

Do you want to?

Yes.

As Karen suggested as well, there are a range of transaction sizes that you can be involved with. And traditionally, institutions tended to be involved in larger transactions and private capital, private individuals used to be involved in smaller transactions.

But those worlds have changed, particularly with institutions getting access to more and more private wealth, we're seeing a merging of high net worth individuals buying larger assets, needing greater financing solutions and institutions active in what we might call the private markets or the middle markets. And so the opportunity for us to take the clients that we know very well on that journey into the smaller transactions space, but also migrating those clients that we know well from the smaller transactions into the larger transaction space is super exciting.

I would say the additional point I would add is the way in which you invest in real estate now is so broad. Like if you just sell buildings, you're not a capital solutions provider. So we're providing services across investment banking, we're active in the derivative space, providing asset management solutions. So the whole gamut of potential capital solutions, and that's what's going to allow us to migrate up and down the transaction stack and the size of assets much more fluidly and fluently. And we definitely see huge potential for us to increase our market share in the middle market space.

So we're going to keep the questions generally today to kind of longer-term strategic questions, but there's one that's related to the advisory businesses that I did want to ask, and then we'll shift to some other sections of the Q&A as they're coming through, which is what gives us confidence that we'll continue to see sustained growth? And are there any signs out there that are worrying us at the moment?

Karen, do you want to start off with that one?

Yes. So one of the biggest things we look to is overall business confidence index and how -- right, that, with a 2 to 3-quarter lag, typically translates into further revenue growth for us. And so at this stage, we see continued confidence and stability and haven't noticed any material changes in the path ahead. We'll continue to monitor it, of course, in the current environment, but so far, so good.

And on the capital side, the -- we obviously monitor our pipeline very carefully. Our pipeline is constructive as Kelly and Christian alluded to on the last call. I think it's helpful to remind ourselves that the scale of our capital flows in the capital markets is the U.S. is the biggest market, and it's actually relatively contained and robust to external influences.

And I'll bring that to light in one stat, which is only about 4.5% of all transactions in the private real estate markets last year in the U.S. were foreign overseas capital. So it's pretty robust. I think the economic indicators remain positive. Economic confidence, as Karen alluded to, is an important guardrail to investors' confidence. And at the moment, we're not seeing any weakening in our live bidding data, as I showed earlier.

We have a number of questions related to what our nonorganic growth could look like when you're thinking about Accelerate 2030. The first ask is in which business lines or markets do we see the most attractive non-organic growth opportunities?

I want to start off with reiterating we have tremendous runway to grow organically. And I cannot reinforce that often enough. Because when you grow organically, you know exactly what the pitfalls are, where you can accelerate and where you can really drive value. So the risk return of organic growth outpaces by miles any acquisition you can do.

Having said that, we do acquisitions. We showed 2 of them to you earlier. And what we are observing is that you see this technology and data kind of drive into our industry is benefiting the very large players. The flip side is the medium and small players find it difficult to keep up. So when you look at market pricing, look at share price developments, you can see very nicely how the leading players are gaining more share and more value compared to some of the mid and smaller players. So saying it bluntly, they are getting cheaper and cheaper from the valuation.

That's one aspect which we have to kind of keep in mind here because when we were -- if we were to go after one of those over the next couple of years, we can bolt on our technology platform. So we immediately enable all their salespeople who may be very, very talented with what they don't have. They don't have that data. They don't have those software tools, which will make them much more productive. So that is becoming an interesting kind of development, which we are observing.

The other thing which we obviously look at is what kind of skill sets do we need to continue to enable this differentiation in our corporate business, in our property management business, in our project management business, because the -- how that is professionalizing is truly remarkable.

And so as we did with SKAE, we saw, well, this is developing in a certain direction where this will be difficult for us to get the talent on board. So we went after SKAE and got it in one deal that was for us a really excellent use of capital of our shareholders. So this is something you will see us continue to do.

Where we will be very, very skeptical is to try to compete with private equity on those type of deals which we see where they are willing to pay enormous multiples on businesses which are kind of side businesses to us, where we have very little opportunity to take benefits of cost synergies which would justify those type of acquisitions. That becomes a very discrete market now, which is private equity dominated. We stay away from that.

Anything you guys want to add? Kelly?

I would just go back to the framework that we talked about in the capital allocation framework. We're looking for things that have strategic fit, which is exactly what you just articulated, can help us build scale, help us drive resiliency or fill a very important capability gap. And SKAE is a good example of that.

We want the economics to be good, and we are very focused on fit. We want any inorganic move that we do to be integratable into our business and our business platform because we have spent so much time pulling that together and we see it as such a value creator for our business.

Neil?

Just another point, if I may, and Cynthia on the stage did a great job articulating some of this. Until that business was centralized, standardized, I would have had no confidence coming to my colleagues and the Board and saying we wanted to buy something of scale, because it's much more difficult to integrate when you have not standardized your end-to-end processes and your technology stack.

So we're in a position now across our major businesses that we've done the hard yards of standardizing process, standardizing tech stack. So we've created a platform that's easier to plug into now.

But I want to reinforce once again, with the AI [indiscernible] trade coming and then now with the repercussions from the recent global developments, our share price was hammered down again. We feel this is completely unjustified, and that's the reason why we released today that accelerate share repurchase program. It is very, very difficult to find an M&A target which beats the metrics which we calculate when we buy back our own shares at those share price levels.

So we have a few questions around all of the cash that we've talked about we're going to generate as a part of the Accelerate 2030 financial plan. What's the return on free cash flow assumed in the 5-year plan? And anything we can share around our repurchase or M&A assumptions within the 2030 guide?

You want to take that?

Sure. Well, you can do the math on kind of the metrics around kind of the 8%, 12%, 16% and then the 80% plus free cash flow. When we kind of look at our capital allocation strategy, we're -- we've got the 3 things that we are focused on that create productive tension, organic investment to build our business, returning capital to shareholders, which is very important to us. Hopefully, you've taken that away from today. And then third, strategic M&A.

There are a couple of things I would just point you to as you think this through because, again, this is going to vary a bit from year-to-year that our -- since 2020, we have returned 50% -- almost 50% of our free cash flow to shareholders. And over the past couple of years, we've done that in a much more programmatic and increasing way.

And then the other thing that I would just point out is we will make active use of the share repurchase authorization that we have just expanded. Again, we view that as an important part of our capital allocation strategy. It will vary likely from year-to-year, just depending on what the operating environment is, but we will make active use of that repurchase authorization.

We talked about all the working capital improvements over the past few years and that there are -- there's still significant runway for more opportunities. Where do you see the greatest opportunity? And can you quantify that to any extent?

It's again for you, I would say.

Can you repeat the first part of the question?

Just thinking about all the working capital improvements that we've made, and we said that we have a lot of runway. So where do we see the most runway?

There are a couple of places. But the biggest one is, frankly, just in how we operate the business day-to-day, getting invoices out the door, getting the collections done, making sure that we're doing that in a timely manner, getting contract terms that are -- have attractive payment terms in them. Again, this is something that we see AI being able to really, really help us improve around in a very smart but also operational way.

I think the second thing that we're really focused on is, again, where we are actually deploying our cash to invest organically and inorganically. And on the organic part, we invest working capital to grow our business. And so making sure that where we're putting that working capital is actually earning us a return, and just trying to be much more rigorous around what that looks like is something that we've been focused on for the past couple of years and making progress on. But we see more opportunity to keep getting better.

Based on Accelerate 2030, where do you see the business mix looking in 2030?

Well, I mean, you can do the math yourself. We see growth opportunities in all of our services and the growth trajectories are not massively different amongst those different services. So in the absence of any material M&A, the overall mix will not fundamentally change.

But what I would like to reiterate is, and I tried to do that earlier already, we have to be careful with kind of saying these are the resilient business lines and the advisory businesses are less resilient. What we are doing with our technology platform is we're making all of our businesses much more resilient.

Now that doesn't mean that when the transaction volumes in Capital Markets are falling from a cliff as they did in '23, that we are completely immune against it. But what will happen is that we will take much more market share in those environments because we have the better data and clients feel more comfortable to trade in those times with us. In easy markets, everybody can sell a building. In difficult markets, that's where you really can make a difference.

And so the resiliency of our platform has grown very significantly, not only over the last 10 years, I go back to where it was before the GFC, but that trend is even accelerating now over the next 5 years. So even if the mix of the business lines will stay the same in their contribution in the absence of major M&A, the resiliency will grow very, very significantly over the next 5 years.

So we have a few more minutes here for a select few more questions. We have a number of questions around markets. What are the top focus markets for JLL outside of the U.S. at the moment?

Well, you say outside of the U.S., I always want to reinforce the U.S. is the most attractive market in the world, and it will continue to be the most attractive market in the world. I mean I was with my colleagues at the World Economic Forum in January and I had the opportunity to talk to the Secretary of Trade. And his kind of growth outlook was very, very bullish. And I don't know whether it will be exactly like that, but the growth outlook for the U.S. in comparison and considering that this is the largest economy in the world, is pretty stunning. And we are taking direct benefit. As you know, we are correlating heavily with GDP.

If you go away from the U.S., India has been a very, very strong growth play for us. Our Head of India sits over there, grab her over lunch, Radha. We have a really exciting growth performance in India on many levels. And so that is the country which, to some degree, has replaced for us what we cannot do anymore in China due to the geopolitical environment we are living in.

Now the other growth area I always like to mention is at the moment a little bit in challenging times. But as you know, we have been growing massively in the Middle East, especially in Saudi. I very much hope, not only for all of our colleagues living and working in that region, that this is coming down very quickly again, so that they can continue that successful growth journey. It's very exciting what you see there on the ground and also with regards to the improvement of the quality of life for all the people who live there.

The last market I would like to mention is Japan. Japan may surprise you. It's a very mature economy, fourth largest economy in the world. But Japan is on a journey over the last couple of years from a very inward organized economy, they have always been an exporting nation, but they were organized very inward looking, to an economy which is opening up significantly. And we have been there for a very long time on the ground with a very large team, and we are benefiting massively from the development of that economy. And so it's a big growth area for us.

All right. Last question, and I tried to get to as many of these as possible, but please grab us during the lunch for those that are with us in person. And those from afar, please reach out to us directly and we're happy to talk through any of these questions with you. And I expected this question to come up. I think we all did. What gives you confidence that the demand for CRE will not substantially decline given some forecast for AI dramatically driving down the demand for real estate over the next several years?

Well, I can try to kick it off and then I invite my colleagues to chip in. I think we have to be careful that we are not overrating the near-term impact from AI on the footprint of corporate real estate. The first thing I want to say, which are the 2 countries where AI is being driven forward at scale, where all the products are coming from? It's the U.S. and China. All the other countries are pretty much irrelevant with regards to AI products at this point in time.

And then who is actually using AI at scale? It's the most successful companies who have the means, who have the data, who have the talent, who have the rigor to really deploy AI tools. Those are our clients, because we tend to do business with the most successful companies in each industry.

And so what we are seeing for the time being, the demand of those clients with regards to space is growing. I mean our success in leasing, especially in the fourth quarter, was very much driven by AI demand of companies in San Francisco and New York. So for us, that was an additional requirement. And I mean, even if you kind of listen to these "We can take out a couple of thousand people because of AI deployment." But what they do with the additional kind of earnings they have, with the productivity gains, they invest it into other areas. And in those other areas, they employ people. And so they add additional space.

So we have absolutely no sign for now that, within our client base, there's a fundamental shift to be expected with regards to the space they will require.

But even if, even if that is going to happen, just think about what happened during COVID. You had clients who were dropping space in the best buildings here in New York. Did we experience any vacancy in the best buildings here in New York? No. What happened is that people who were in less good buildings were trying to get that space, which other people vacated in the best buildings here in New York.

And now you know where we are active. The vast majority of what we are doing is in the best buildings, in the Grade A buildings. And then we have a bit of business in Grade B buildings. So our target markets will be occupied. They will definitely be occupied. And if that would filter through the kind of the rankings of the different buildings, you will see the worst buildings, the worst locations will be vacated at some point if some of those prognosis will be true. My assumption is, don't worry about those prognosis over the next couple of years. And if I'm wrong, don't worry about JLL because our target market will still be occupied and our services will still be needed.

Can I make one follow-on comment to that?

Absolutely.

Which is we actually serve a diversified set of asset classes as well. So office is one asset class that we serve. We have an industrial business. We have a multifamily business. We have a retail business. We have a hotels business. So we have a pretty diversified set of asset classes that we serve.

I do want to just make sure, because I think earlier there was a comment made about office as a percent of revenue, which was a little higher than you might have expected. It was referring specifically to the property management business. Our overall office portfolio or office revenue mix is about 40% of our total mix, which we have shared previously before. I just wanted to make sure nobody was confused about that. I don't know if that question was a setup to make that clarifying point, but it was a good point.

Christian?

Are we good?

Yes.

Okay. Well, then we are coming to an end. You only have a little bit of me and then lunch in front of you.

As a service provider, we are always very focused to kind of put ourselves into the perspective of our clients, because that's what is key. We want to serve them. So we need to really understand what are their expectations to us. So if you take that theme, when we invite you to come to an investor meeting, we tried very hard to think what are you interested in? What is it what you want to hear from us? So I hope very much that we succeeded with that and that we were able to kind of give you the information you need to continue to be a loyal investor into JLL, to continue to be an analyst who is happy to cover JLL.

And I hope that we came across as what I take as my most important task. Because I'm asked very often, Christian, you are now almost 10 years in your role, what are you feeling most proud about? And the answer is pretty simple. When you run a company which has a legacy going back to 1789, you want to create something which sustains. And in order to develop something which sustains, you need an exceptional team. Nobody can run a business like JLL on its own. The smartest CEO in the world will fail. You need a great team.

So I hope what we brought across is we have an exceptional team here on stage. We have a couple of more on stage. We have some more which you can meet at lunch. But I can tell you that it's a fraction of those exceptional people at JLL. So you can trust that we have a real bench of talent, which will drive that company into a very prosperous future going forward.

Thank you very much for coming. Please enjoy the lunch.

Good morning, thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter 2025 Earnings Conference Call for Jones Lang LaSalle Incorporated. [Operator Instructions]

I'll now turn the call over to Sean Coghlan, Head of Investor Relations. Please go ahead.

Thank you, and good morning. Welcome to the Fourth Quarter 2025 Earnings Conference Call for Jones Lang LaSalle Incorporated. Earlier this morning, we issued our earnings release, along with the slide presentation and Excel file intended to supplement our prepared remarks. These materials are available on the Investor Relations section of our website, please visit ir.jll.com.

During the call as well as in our slide presentation and supplemental Excel file, we reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures to GAAP in our earnings release and slide presentation. We also referenced resilient and transactional revenues, which we define in the footnotes of our earnings release.

As a reminder, today's call is being webcast live and recorded. A transcript and recording of this conference call will be posted to our website. Any statements made about future results and performance, plans, expectations and objectives are forward-looking statements. Actual results and performance may differ from those forward-looking statements as a result of factors discussed in our annual report on Form 10-K and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statements.

Finally, a reminder that percentage variances are against the prior year period in local currency, unless otherwise noted.

I will now turn the call over to Christian Ulbrich, our President and Chief Executive Officer, for opening remarks.

Thank you, Sean. Hello, and welcome to our fourth quarter 2025 earnings call. This morning, I'm pleased to share our strong performance for the fourth quarter and full year of 2025. We reported our seventh consecutive quarter of double-digit revenue gains and ninth consecutive quarter of double-digit EPS growth. We have executed our strategy with discipline, building a resilient foundation for future growth.

In 2025, JLL achieved new highs across key top and bottom line consolidated financial metrics, notably revenue, adjusted EBITDA and adjusted EPS as well as free cash flow. In the full year, revenue increased 11%, and adjusted EBITDA was $1.45 billion, growing 22% and reaching the top end of our financial target for the year. We have consistently delivered disciplined operating rigor and strong margin expansion, largely through organic revenue growth and our focus on enhancing platform efficiency in part due to tech-enabled productivity gains.

We are proud to have achieved our midterm margin target in 2025, in line with expectations established at our last investor briefing in 2022 and despite the volatile macro environment since that time.

Our fourth quarter revenue was up 10% driven by accelerated transactional revenue and the continued growth of our resilient business line. Our deep global expertise across capital solutions drove broad-based growth in investment sales, debt and equity advisory up 26% during the quarter. The investment markets demonstrated sustained momentum through the end of 2025.

Investor confidence is rising. More investors are deploying capital and real estate debt markets remain robust, which we expect will lead to further growth in 2026. Momentum is similarly building in our leasing business as office demand reached its highest level since 2019, and industrial demand is improving and diversifying across more industries.

Fourth quarter leasing revenue increased 17%, led by significant growth in the U.S. as well as notable contributions from India and the U.K. Looking ahead to 2026, we expect ongoing growth in our leasing business based on an overall improved sentiment and a robust global economy, which supports increased leasing demand across asset classes and geographies.

We remain focused on continuing our recent track record of revenue growth and margin expansion across our resilient business line. Revenue in Real Estate Management Services increased 9% in the quarter and 11% in the full year, and we are encouraged by a strong pipeline for continued momentum, especially in the second half of 2026. We maintained high conviction in the long-term growth trajectory of these resilient businesses.

Before turning the call over to Kelly, I'd like to address the market volatility, which has impacted the real estate services industry over the past week. We have been acutely focused on both the opportunities and disruption risks associated with technology including AI for nearly a decade. We are senior leaders with backgrounds in technology data and AI. Through JLL Spark, we have gained a deep understanding of the technology ecosystem and real estate across all stages of maturity and have directly invested into disruptive companies including in AI. And we have been successfully embedding technology and building proprietary data sets across our core services throughout this time.

Relative to our industry at large, we have a uniquely informed perspective on this topic. When we assess the past 30-plus years and look across industries, a consistent theme has been true. The services businesses with scaled proprietary data, unified platforms and the best people outperform and win. We strongly believe this will continue to be true.

For JLL, we see significant runway for profitable growth and minimal risk of this intermediation. The complexity of the commercial real estate asset class, the criticality of real-time local market expertise and the fiduciary responsibilities involved create structural barriers that favor scaled service providers with a proprietary data and technology acumen to drive client outcomes and results.

With that, I will now turn the call over to Kelly Howe, our Chief Financial Officer, who will provide more details on our results for the quarter.

Thank you, Christian. Our strong top line and bottom line performance for the quarter and the year reflects the continuation of our momentum in driving client success through the strength of JLL's people and differentiated platform. The revenue growth, along with our ongoing focus on operating efficiency, produced meaningful margin expansion and earnings growth in the quarter and full year. The combination of our earnings growth and ongoing initiatives to improve working capital efficiency helps drive robust cash flow performance and cash flow conversion. We see significant opportunity to gain client lion's share and further penetrate the expansive and growing addressable market, while also enhancing our operating leverage.

Now a review of our operating performance by segment. Beginning with Real Estate Management Services, growth was led by workplace management and project management for the quarter and full year. Within workplace management, a reasonably balanced mix of new client wins and mandate expansions drove strong revenue growth, reflective of both the value we bring to clients and the significant market opportunity. In the quarter, an approximate $11 million impact from higher U.S. health care actuarial costs associated with a significant uptick in claims led to an increase in pass-through costs and consequently, lower management fees.

New and expanded contracts globally drove double-digit project management revenue growth inclusive of high single-digit management fee growth. Property management revenue growth continues to be tempered by the anticipated elevated contract turnover we mentioned last quarter.

The overall segment revenue growth drove the increase in adjusted EBITDA and margin in the quarter and for the full year. The higher U.S. health care costs were a headwind to profitability in the quarter though this was largely offset by discrete cost management actions.

Looking ahead, we remain confident in the trajectory of the workplace management business. Our contract renewal rates are stable and our pipeline is strong, albeit second half weighted. Considering this and the time to onboard new business wins, revenue growth is likely to be modest in the near term and build in the second half.

Within project management, client activity remains healthy, particularly in the U.S., positioning us for continued momentum. In property management, we anticipate the elevated contract turnover we are actioning to pressure revenue growth through midyear before gradually rebounding. For this segment overall, we continue to balance investing to drive long-term growth and profitability with near-term business performance. We remain focused on driving healthy annual margin expansion inclusive of the transition of our direct revenue-generating technology businesses and higher health care costs.

Moving next to Leasing Advisory. Revenue growth in the quarter and for the full year was led by continued momentum in leasing, notably in office. Globally, both office and industrial leasing revenue growth accelerated with office up 26% and industrial up 11% in the quarter. The office revenue growth meaningfully outpaced the 1% increase in market volume according to JLL Research.

On a 2-year stacked basis, leasing revenue growth accelerated to 31%. The increase in Leasing Advisory adjusted EBITDA for the quarter and full year was primarily driven by leasing revenue growth as well as incremental platform leverage. The timing of incentive compensation accruals was a benefit to the fourth quarter offsetting the correlating third quarter headwind. Absent this phasing impact, the fourth quarter incremental margin would have been much closer to our historical norm. The full year incremental margin was 35%.

Looking ahead, our leasing pipeline remains healthy as client demand for high-quality assets continue. In the face of a dynamic macro backdrop, the GDP growth outlook remains constructive and business confidence as measured by the OECD has been resilient, providing optimism for continued growth in the near term. We continue to invest in enhancing our talent and platform capabilities to drive long-term profitable growth.

Shifting to our Capital Market Services segment, the improvement in better dynamics and strength of the debt market continued in the fourth quarter, driving an acceleration in investment sales growth to 27% and a 20% increase in debt advisory revenue. On a 2-year stack basis, growth meaningfully accelerated from the prior quarter with investment sales up 63% and debt advisory revenue increasing 90%.

Investment sales revenue notably outpaced the global market volume in the quarter and full year, a direct reflection of our differentiated data-driven global platform. The transactional revenue growth and improved platform leverage drove the increase in the adjusted EBITDA and margin expansion in the quarter and full year. Incremental margin for the quarter was impacted by business mix and higher commission tiers being met.

Looking ahead, our global investment sales, debt and equity advisory pipeline remains strong, and we are encouraged by the highly liquid capital markets, fundraising activity and better momentum globally. We see meaningful runway for continued growth.

Turning to Investment Management. The expected decline in incentive fees drove the lower revenue for the quarter and full year with higher transaction fees from a pickup in acquisition activity, providing a slight offset. Advisory fees were largely unchanged for the quarter and on a full year basis as growth from U.S. core open-end funds was offset by declines in Asia Pacific.

We raised $4 billion of private equity capital in 2025 compared with $2.7 billion in the prior year, reflecting continued strong demand for credit and core strategies. As it takes several quarters to deploy new capital and as valuations have seemingly bottomed, we expect a gradual recovery in advisory fee growth in 2026.

Moving to Software and Technology Solutions, double-digit growth in software revenue within both the quarter and full year more than outpaced reduced discretionary technology solution spend from certain large existing clients. The segment achieved profitability in the quarter, in line with our expectations and despite slower-than-anticipated top line growth.

With the transition of our direct revenue-generating technology businesses into the Real Estate Management Services segment effective at the start of the year, we remain focused on driving closer alignment as well as top and bottom line synergies between our technology products and core businesses.

Shifting to free cash flow, balance sheet and capital allocation, the higher free cash flow in the quarter was largely due to earnings growth and an increase in accrued commissions, partly offset by growth-related working capital headwinds. Full year free cash flow marked an all-time high, and our cash conversion ratio was meaningfully above our long-term average, reflective of earnings growth, ongoing efforts to drive working capital efficiency and discrete benefits like lower cash taxes paid in the year. Our cash generation contributed to a reduction in net debt, which along with higher adjusted EBITDA over the trailing 12 months led to the improvement in reported net leverage to 0.2x at year-end. Our full year average leverage ratio was 0.9x, generally where we anticipate managing the business over time.

Capital deployment priorities remain focused first on driving organic growth and productivity across business lines. Organically, we are continuously and diligently enhancing our platform and service differentiation as well as investing in our people strategy. Our acquisition pursuits remain focused on augmenting organic initiatives that enrich our capabilities as well as deepen our client relationships across multiple business lines and provide synergistic scale particularly within our resilient businesses.

Returning capital to shareholders remains a top priority. In the quarter, share repurchases totaled $80 million, bringing the year-to-date total to $212 million, notably above stock compensation dilution and full year 2024 repurchases of $80 million. We look to further increase share repurchases from fourth quarter levels with the total annual amount depending on the broader operating environment, our leverage outlook and valuation as well as relative returns to other investment opportunities inclusive of M&A.

Regarding our 2026 full year financial outlook, the market backdrop overall remains constructive. Given our strong pipelines and underlying business trends, we are targeting an adjusted EBITDA range of $1.575 billion to $1.675 billion, reflecting 12% growth at the midpoint. We continue to target healthy margin expansion, balancing investment in long-term profitable growth initiatives alongside further enhancing our operating rigor.

Christian, back to you.

Thank you, Kelly. Over the past year, our global executive board and leaders from across JLL have engaged in a focused, rigorous process to define the next evolution of our strategy. Since globalizing the business lines in 2022, we have made significant progress in developing the strategic foundation to drive continued top and bottom line growth.

Reflecting on the volatile macro environment of the past few years, our results demonstrate our resilience, and we see significant runway ahead. In 2026, we are confident we have the people platform capabilities and financial profile to drive our strategy forward with a strong balance sheet and a disciplined approach to capital allocation.

As a result of our scale, exceptional people, differentiated offerings and most importantly, the trust we have developed with our clients over more than 240 years, many of the world's leading most sophisticated investors and occupiers choose to work with JLL. We are continuing to evolve our strategy to be the most intelligent, efficient data-led service provider for our clients. We expect these strategic moves will directly benefit JLL's performance as AI and future innovations integrate in our business and industry, allowing us to gain market share and scale in underpenetrated markets in the years to come.

We will be introducing our new strategy and longer-term financial targets at our upcoming investor briefing on March 12, and we hope you will join us in person or by live stream. As we look ahead to the coming quarters, we are optimistic clients are motivated to make decisions, transactional market growth is broadening across more industries, asset classes and markets and pipelines indicate runway for growth and further share gains for JLL across both our transactional and resilient business lines.

I would like to once again thank all of our JLL colleagues around the world for our achievements in 2025. We are excited by the opportunities ahead of us and look forward to building on our success in the years to come.

Operator, please explain the Q&A process.

[Operator Instructions] Your first question comes from Anthony Paolone with JPMorgan.

First question, maybe, Kelly, can you give us a little bit more detail on revenue growth expectations for '26 for areas like capital markets, leasing, REMs?

Sure. Tony, just as a reminder, we don't generally provide top line guidance. But to give you a bit of a flavor of how we are thinking about our top line as we look into 2026, we expect continued growth from our REMS business, as I noted, in facility -- workplace management and property management a little bit more back half weighted than first half weighted, but with continued really strong growth in our project management business, which has been boosted by market dynamics.

And then in our transactional businesses, we are seeing continued momentum in both capital markets and in leasing. Pipelines look strong. The economic indicators are all very positive and strong. And we're building on momentum coming out of the fourth quarter.

One thing I will note is that we are starting to face some tougher comps in those transactional businesses, which will probably mute growth rates themselves a little bit, but overall, we see continued momentum.

Okay. And then my second question, you talked about the buyback a bit. How should we think about just free cash flow in 2026 and just your -- just the baseline assumption on what you do with your cash because your net debt is pretty low at this point. It seems like even if you just bought back stock to match stock comp, you still have a lot of cash left over. So what are the priorities there?

Well, I'll take that one. First of all, as we spoke about of the previous years, we we're focused on bringing down our debt levels to where we are now. We are very comfortable with those debt levels, and they are exactly in line with our range that the midpoint is around 1. And so going forward, we will, therefore, have much more capital at hand to invest to the benefit of our shareholders. And even before the more recent decline in our stock price, we think that our own repurchases are a very attractive way of bringing back capital to our shareholders. So you can expect us to increase that over the course of 2026.

Your next question comes from Stephen Sheldon with William Blair.

Maybe Christian, I appreciate your thoughts on AI in the prepared remarks. And from my perspective, it seems like JLL has been very front-footed on AI and data investments in recent years, even arguably more than peers, which I think some continue to underappreciate. So just at a high level, I guess what are, as you think about the business, what are some of the factors that you think gives JLL a competitive moat versus some of the AI-focused start-ups in the space. How are you thinking about that competitive moat over time?

Overall, I think we are in a very good position around that whole topic of AI. As you alluded to, we started very early to invest heavily into our data platform and then also learned a lot about what is going on in the start-up world, and we are trying to bring the best of those both worlds together. And we have a lot of data, which is very hard for other people to gather, which we call our proprietary data. And with our proprietary data, we can build tools, which is enable our people to drive better outcomes for clients, which then leads to higher revenues per head for our transactional people, but also for the other areas of our business.

And therefore, I mean, I don't want to come across kind of naive about the threat, which AI may offer. But for the time being, we don't see any competitive pressure from outside of our industry coming to our industry. And within our industry, I think we are extremely well positioned to take benefit of AI.

Got it. That's helpful. And maybe as a follow-up. On the office leasing side, can you all maybe unpack just a little bit more what you're seeing under the hood there. Specifically, what are some of the factors driving the higher average deal size. Do you think about square footage, type of properties being leased with I think you shift to higher quality? And also what you're seeing in terms of average remuneration?

I can take that one. So as you've noted from our numbers, we had a very good quarter in leasing and a good 2025 in leasing as well. There are, as you know, a couple of things driving that. Office leasing has been very strong in the U.S. but also in other parts of the world as well. We've definitely seen a recovery in large deals. In fact, when we look at deals, 100,000 square feet and out in the U.S., those are up 15% year-over-year. That definitely plays to our strength. And we're seeing strength in core gateway markets as well. New York, San Francisco, et cetera. And so that also really plays to our strength.

We are -- as we kind of look forward, we see that momentum continuing. We're seeing continued flight to quality. We're seeing continued office mandates, return to work mandates. I think the average now for the private sector is at 4 days a week in office. Rents are up in the fourth quarter, 4% according to our data, and lease durations are at 8 years, which has been continuously increasing since kind of COVID.

So again, as we go into 2026, we're seeing continued momentum, particularly in the office space. And also, I'd couple that with feeling good about our pipeline.

Congrats on the strong end of 2026 or 2025.

Thank you.

Your next question comes from Jade Rahmani with KBW.

You highlighted proprietary data as one of the key defenders against AI potential disruption. I would also add the heterogeneous and complex nature of commercial real estate.

That said, would you agree that there is more disruption risk at the low to middle market part of the landscape because those assets would be simpler, less complex, more homogeneous in nature. And if so, can you give any breakdown of how much of JLL's business is truly institutional, maybe $40 million in size and up or however you define it, versus at the low to middle market.

Well, that's an interesting way of putting the question. I would start off with the more scaled you are in a business, the better protected you are because you have data. And your point about whether less sophisticated deals or sites of transactions are more at risk to be disintermediated, potentially, at the end of the day, somebody has to execute the deal. And so there will always be human interaction for pretty much everything you see within our space. Whether at some point, you can completely cut out human interaction, I think we are very far away from that.

So with regards to JLL, I mean, we looked at it and we looked at it again after last week's stock price decline, whether we are missing a trick here. And honestly, we cannot see anything up the horizon, which will disrupt parts of our business in the next couple of years. And we cannot look further out there. The momentum is very fast on AI.

But just at the end of the day, there will be human interaction. And then that human interaction will be executed by people who have the right data at hand and have the knowledge to deliver that service. And so I don't know who should disintermediate us.

And on the positive front, can you talk to the areas in which JLL is utilizing AI today, deploying it across the platform, which businesses you believe most clearly benefit? And if you could quantify, as one of your peers has, the percentage of revenue or earnings currently coming from data center management services in such businesses.

Okay. These are two very different parts, but I will kick it off. On the AI front, we have, obviously, 2 major areas. We have those areas where AI is driving efficiency into our organization. And that goes across all business lines, but it also goes very much into the functions. And we see that momentum has been very strong, and it's part of the very strong margin performance we were able to deliver that we are becoming just more productive and more efficient through the use of AI.

Specific to the business lines, we have tools in place across all service lines now. We have spoken about them before. We identify potential opportunities for our brokers, which they then work on and we help our project management business with tools to be really on the spot, what the current pricing for certain works and how to do that in an optimal way for our clients. So it goes across the board, and it's very much also in our workplace management business.

So that was the first part of your question. The second part of your question was around data centers, which we had a very strong fourth quarter around data centers. This is an asset class, which touches pretty much all of our business lines on the workplace management side, as you know, we manage those data centers, and that has doubled year-over-year the amount of work we do there. But what was specifically in the fourth quarter, we saw a lot of transactional business across leasing and capital markets in the data center business.

So I want to stay away from -- I know that our competitor is always giving revenue number. Well, I don't know what part of that revenue number includes developments and what doesn't include developments, but I want to stay away from giving you a precise revenue number, I can only say overall, it doubled year-over-year over the last 12 months.

Your next question comes from Seth Bergey with Citigroup.

I was just kind of wondering if you could comment on how do you think AI will kind of impact office demand? And I appreciate that you don't want to put specific numbers around how much of the data center as a piece of the business. But in your comments on kind of how you think about the longer-term impact on office demand, could you also kind of maybe quantify in some way kind of how much office comprises the overall business?

I'll start off with the demand, and then the team will look during the time I'm speaking about the proportion of offices to our overall revenues.

Listen, the demand side was very much impacted by COVID and people staying at home. Now we are on a trajectory that people are coming back to the office, and we have seen now the second largest take up since 2019. So the office markets are actually very strong. And then within the office markets, as you know, you have that movement around that a lot of companies are trying to secure the best buildings or the best spaces for their people. So we have a shortage on the top end of the market. And from there, it moves down.

So if we were to see a significant decline in office work because of AI, what happened is that you would see the worst buildings, back office spaces and those type of buildings suffering first, and any kind of reduction in Grade A buildings would be probably picked up relatively quickly by people who are currently sitting in a C or B building, and then they will move up the letter.

So overall, frankly, first of all, there is no sign. It's the opposite. When you look at markets like San Francisco, the market is boosted very much by AI-driven demand, and we also see that in New York. So for the time being, it's growing. But if it would go the other way through AI, I don't think there will be a significant impact on the business we are focused on. As you know, we are very focused on the best buildings and the large transactions and in the main gateway cities in every country. So there's absolutely nothing on the horizon that we see that shrinking over the next couple of years.

Guys, can you provide the number, how much of our exposure to office is at the moment?

Yes. Yes, I can follow up on that. So if you look at our leasing business, about 60% of our leasing business globally is in the office space. For capital markets, it's closer to mid-teens. Our project management business, about half is office. And so when you look at our consolidated portfolio, it's about 40% is exposed to office.

Great. And then maybe just a follow-up. You kind of mentioned that the way you're currently using AI is creating efficiencies in your processes. How do you think about just that impacting the business from a head count perspective? And do you think that any of those efficiencies kind of put pressures on top line fees at all?

Can you repeat that again? Top line what?

Does AI kind of put -- does some of the efficiencies that you're able to achieve with AI put pressure on advisory fees or any changes in the way you think about head count needs for the business?

Well, what you have seen, we have shown a pretty robust top line growth in '24 and '25 without adding much head count to the organization other than those people who are working client side and are reimbursed by our clients. But if you put that to the side, we were able to drive that revenue grows without adding more head count to the company. And that is a clear kind of outcome from us deploying AI in a successful way. I see that as a trend going forward. We will be able to drive more revenues through the company without any significant amounts of headcount.

To your second question, the arrangement of fees with our clients are impacted by many aspects. Most of it is the competitive environment. So far, we haven't seen any pressures, which we could kind of bring down to AI coming into our industry.

And if I would maybe just add one more point on that. That's on the kind of workplace management side. On the transactional side, we absolutely see continued productivity improvements around our producer productivity. And so we think that with a lot of the investments that we're making around data, AI, et cetera, that we'll actually be able to drive more productive top line growth on the transactional side. So that's just another view on the portfolio.

Your next question comes from Brendan Lynch with Barclays.

Investment sales was up 24% in 2025. You kind of alluded to this, the market kind of overcoming the wide bid-ask spreads. What are some of the lingering impediments to recapturing the pace of transaction the industry was on in prior cycles?

We believe that this will be an ongoing upward trend but not a hockey stick. So what we have seen, we have seen a recovery chipping in, into '24. That has continued in '25, and we expect that to continue in '26, but nothing which will blow you completely away from a transaction volume globally.

The U.S. is doing pretty good already. We will see more recovery coming into Europe in '26. Europe is still, especially on the continent, is still at very, very low transaction levels. So there is significant room to grow that again. But as I said, I don't expect that to be a hockey stick uptick in that transaction volume.

Okay. That's helpful. And then maybe one on workplace management. You had a nice mix of expansion with existing clients and new client wins. Can you provide any details on the new wins component of that as it relates to either customer vertical or themes that they're trying to address?

What we see there is kind of almost a continuation of what we have seen in the past. You have within each industry companies who are doing extremely well and they are growing much stronger than other parts of the industries, and that brings a lot of revenue growth for us going forward. And we have a very high market share in the technology sector and the financial sector, and those are 2 sectors which continue to do well.

From a geographic lens, as you know, the outsourcing has been around for a long time and in a very sophisticated way in North America and it's lagging quite significantly behind in Continental Europe for many reasons. We see that now accelerating. So a lot of new business wins are coming from a geographic lens now out of Europe. And we also see that moving stronger into the Middle East and into Asia. You may have seen that we have entered a joint venture in Saudi because the market is developing there at high speed.

Your next question comes from Julien Blouin with Goldman Sachs.

Congratulations on the strong quarter. Christian, I was wondering how you feel about tech and AI investments going forward? You have historically been one of the most front-footed in making those investments. But those investments have often been criticized for the difficulty of parsing out the returns and the occasional write-downs that have been associated with them.

But I wonder if these fears of disintermediation maybe make you even more aggressive in sort of making those investments going forward to sort of protect and strengthen the moats around your business.

Well, the irony is that I was much more fearful about disintermediation 10, 15 years ago. And after investing now for so long into that area of proptech start-ups, at least my personal fears about disintermediation have significantly shrunk over time. It is not that easy to overcome the benefits of the incumbents. And most notably, I want to go back to the amount of data, which we are collecting.

So we spent indeed a tremendous amount of money to get our data and order, which is not trivial in an organization, which was built country by country over such a long period of time, but we turned the corner on that one, and that is really helping us in a meaningful way to provide our clients with insights, which are not easy to get by people who don't have that data.

And therefore, yes, we will continue to invest into our own platform very much so, and we are investing heavily into developing new internal tools, which we are providing to our colleagues so that they can be even better in servicing our clients. But we have, for the time being, no intention to increase our investments into third-party proptech start-ups. We will continue on that journey, which we have been doing over a more recent history but not more than you have seen already.

Okay. That's very helpful. And Kelly, I wanted to ask about how we should be thinking about cash flow conversion in 2026. Do you think you could reach sort of that long-term 80% conversion level? And then sort of related to that, I appreciate the comments around looking to sort of increase share repurchases in 2026. But I was wondering if you're considering maybe a more aggressive stance on share repurchases as a signal of your conviction around the limited risk that AI poses to your business?

Yes. I can take the first part of that question. And then Christian, I'll turn it over to you on the repurchases. We had an extraordinary cash conversion year in 2025, as you all have seen, truly extraordinary. As we look to 2026, we don't generally provide specific guidance on what we expect cash flow conversion to be. I will say our long-term history has been about 80%, a little bit higher than that. And we certainly, after this strong year, expect to return to something that looks more in line with our long-term average.

Christian, maybe I turn it over to you for the repurchase question.

Yes. I mean, it depends how you define aggressive. So maybe I use too much of a muted language, but we have our debt levels where we want it to be. The current share price after last week is at a level which makes it very, very hard for any M&A opportunity to be more attractive to our shareholders than buying back our own shares. So you will see us to allocate a significant amount of our free cash flow to share repurchases in 2026.

[Operator Instructions] Your next question comes from Mitch Germain with Citizens.

Congrats on the year. Some of the noise that the disruption that you're experiencing within the property management sector segment. I mean, obviously, I think you're exiting certain contracts you talked about being kind of low margin. Is that offsetting growth from other contracts? I'm just kind of curious about how the segment is performing on a more normalized basis?

Well, we were quite transparent around it. We globalized that business line as the last business line, which we globalized and we identified some contracts in -- especially in our China business, which didn't meet our thresholds on margins. And we are now in line with the interest of our clients there, exiting some of those contracts and move them over to other providers if clients are not willing to pay us significant higher fees, which would mean our margin expectations.

And so yes, that has clearly impact on the overall growth rate of that subsegment. If we weren't doing that, you would see that subsegment growing in pretty much in line with what you see in our workplace management business. So high single digit. But for the time being, we are still exiting more contracts, and we expect to get back on to a growth trajectory in the second half of 2026. And from then on, you will see normalized growth rates in that business again.

Great. That's helpful. And are we -- are you seeing an increase in global capital flows? I know that, that was one of the themes that was impacting the capital markets industry. Are you seeing the global capital becoming a more meaningful aspect of the growth on a go-forward basis?

Well, lower capital flows have been very, very strong until kind of the more recent crisis and then it became a bit more muted. And now global capital is becoming more active again. And so that is a driver of transaction volumes growing. But as I said earlier, it will not kind of jump up to the levels where it was immediately. It's a more gradual increase in transaction volumes, and you see that also from global capital.

And then one aspect which we shouldn't underestimate, global capital is very reactive to kind of any issues in the world which impact confidence levels. And so whenever there's a lot of noise in the world, then global capital gets more careful where domestic capital will continue to invest.

So the longer the period is where we don't have a lot of exciting things happening in the world of geopolitics, you will see more global capital being active in the U.S., in Europe and elsewhere. And if we have a lot of noise coming, then it will be more driven by domestic capital in those countries.

Your next question is from Anthony Paolone with JPMorgan.

[indiscernible] In health care costs in the quarter, and then it sounds like those were offset by these discrete cost saves. The health care costs sound more onetime, but are the cost saves, do those continue? Or just any color there?

The first part of your question, Tony, cut off. But I think you're asking about the health care deficit that we noted that hit our fourth quarter.

Yes. So we saw an uptick in claims in the fourth quarter. We did face a health care headwind in our fourth quarter. We did manage to offset most of that headwind with very discrete cost actions that we don't expect to repeat. And we are, on a go-forward basis, as we look into 2026, managing, of course, our broader health care costs accordingly and have it worked into our plan with a broader set of actions that we were taking holistically around our cost structure to make sure that we're managing for that.

Okay. Got it. And then just second one, back on capital markets. I think the GSEs up their caps pretty substantially for '26. And just does that help give you visibility and growth in debt originations? Or just in general, can you talk about just the visibility on the debt origination side going into '26 and growth there?

Well, the debt business has been very, very strong in '25, and we expect it to continue to be very strong in '26. And that aspect, which you just mentioned is one driver of our expected growth, but it's not the only one. The sources of debt have widened significantly. And it was a trend in the U.S., which has now moved over to Europe very strong, and we see a really significant uptick in our services, in our debt services in Europe and now also starting to be active in Asia. And so we have a very optimistic outlook for our debt business going forward. And not only for '26, that will be an ongoing trend for multiple years.

Your next question is from Jade Rahmani with KBW.

On the AI disruption risk, I wanted to ask if you see another buffer being network effects. If you're a large money manager looking to deploy into real estate, you want to be part of, say, the JLL ecosystem of transaction deal flow and that also adds benefits on leasing as well as management services. Do you see that as a meaningful part of the business?

Listen, clients do reduce the numbers of service providers they use. This has been an ongoing trend now for multiple years. I always bring it down to the fact that the world has significantly increased the complexity. And so people are trying to reduce the complexity they have to deal with. And one way of reducing it is they are choosing their service providers, which they really trust and where they get superior outcomes and provide more assignments to them. And that is something where we and other very large players in our industry are benefiting from.

And yes, that will also help to protect us against potential disruption. But again, one major aspect why it helps us is we are collecting more and more data. As we grow, we do more transactions, we manage more buildings and every single building, every single transaction provides us with data. And that data, we turn around and we provide insights to our clients, which other people who don't have that data cannot provide. So it's a bit of a self-fulfilling story here, but it is kind of something which is not only unique to us, it is unique to all large players in our industry if they have their data in order.

Next question comes from Patrick O'Shaughnessy with Raymond James.

So by my calculations, your workplace management revenue, net of the gross contract costs, the growth decelerated to flat year-over-year in the fourth quarter versus 6% in the third quarter. Can you speak to the cause of that deceleration?

Yes. As Kelly alluded to, we had to kind of take the health care costs and deduct it. That's the way the accounting works, if you kind of take that out, the revenue growth net of gross contract cost would have been roughly 4%. We had 5% in local currency in the third quarter. So somehow in line with the third quarter.

As a general comment there, our strategy is to be very focused on margin. And we do not accept any contracts, which are margin dilutive to us. And it is always between 6 to 9 months. You have to go back when you win those type of work before it turns into revenue. And so there will have been some potential assignments out in the market 6, 9 months before the fourth quarter, which didn't meet our margin requirements, and we don't take them up, and you see that in our constant widening of our margin in that business. But as we said earlier, we are very confident that the average growth of that business over time is always in the high single digit, and we don't expect anything else for 2026.

Got it. That's helpful. And then secondly, what's your outlook for industrial leasing in 2026? It looks like it started to improve, but still off of relatively depressed levels?

Yes. When we look at industrial leasing and if you look at our performance on a 2-year stack basis, it's actually been quite strong relative to the market. We believe that, that industrial leasing business has bottomed out and looks like it's building momentum again. As we look into 2026, we expect continued acceleration around that particular segment and our pipelines look strong, look good for industrial leasing as we head into 2026.

There are no further questions at this time. I'll now turn the call back over to Christian Ulbrich for any closing remarks.

Well, thank you, operator. With no further questions, we will close today's call, and I hope to see you all at our investor meeting on March 12.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Jones Lang LaSalle Third Quarter 2025 Earnings Conference Call. [Operator Instructions]

I'd now like to turn the conference over to Sean Coghlan, Head of Investor Relations. Please go ahead.

Thank you, and good morning. Welcome to the Third Quarter 2025 Earnings Conference Call for Jones Lang LaSalle Incorporated. Earlier this morning, we issued our earnings release along with a slide presentation and Excel file intended to supplement our prepared remarks. These materials are available on the Investor Relations section of our website. Please visit ir.jll.com.

During the call, as well as in our slide presentation and supplemental Excel file, we reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures to GAAP in our earnings release and slide presentation. We also referenced resilient and transactional revenues, which we defined in the footnotes of our earnings release.

As a reminder, today's call is being webcast live and recorded. A transcript and recording of this conference call will be posted to our website. Any statements made about future results and performance, plans, expectations and objectives are forward-looking statements.

Actual results and performance may differ from those forward-looking statements as a result of factors discussed in our annual report on Form 10-K and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statements. Finally, a reminder that percentage variances are against the prior year period in local currency, unless otherwise noted.

I will now turn the call over to Christian Ulbrich, our President and Chief Executive Officer, for opening remarks.

Thank you, Sean. Hello, and welcome to our third quarter 2025 earnings call. This morning, we reported strong results with our sixth consecutive quarter of double-digit revenue gains and eighth consecutive quarter of double-digit adjusted EPS growth reflecting the strength and resilience of JLL's diversified platform.

At the consolidated level, revenue grew 10%, adjusted EBITDA increased 16% and adjusted EPS was up 29%. Top and bottom line growth was led by a reacceleration in our Transactional businesses after market recovery, which began building momentum late last year, further progressed. Transactional revenue grew 13% in the quarter, led by 26% growth in investment sales, debt and equity advisory.

Though the macro environment remains dynamic, the economic outlook and forward indicators for Transactional markets have stabilized and improved during the quarter. Both occupier and investor clients are motivated to transact.

Looking at our largest market, the U.S. This was reflected in broad-based activity across Capital Markets, office and industrial leasing as well as an improvement in large deal activity. Investors in particular, are increasingly shifting to risk-on mode supported by healthy and robust debt markets. We continue to invest in the people and platform to drive long-term revenue and margin growth across our resilient business lines, positioning each of them for sustainable, profitable growth. The result of our investments was evident in the seventh consecutive quarter of double-digit revenue gains in real estate management services. Data, technology and AI are central to JLL's overall strategy, differentiated platform and financial performance.

We continue to create a suite of impactful and transformative technology products that drive revenue growth and increase the profitability of JLL anchored in both an AI forward approach and one that enables us to deliver the most valuable outcomes for our clients. Over the past 6 years, we have accelerated the pace of innovation at JLL. Today, our platform is driving significant value by enabling the core businesses. Our people and clients are leveraging our data technology and AI to derive unique insights, informed decision-making and drive productivity. We were an early adopter of generative AI in our industry and are now building Agentic AI capabilities into our products to address complex problems and needs. We are scaling rapidly across both adoption and frequency of use.

More than 41% of our addressable population are now using our proprietary AI tools daily up from 35% weekly adoption earlier this year. We would not have been able to achieve these milestones, if not for the combination of our people, global footprint and culture. Of our broader technology suite, the direct revenue-generating software products and our Technology Solutions business comprise the Software and Technology Solutions segment. The segment allowed JLL to incubate a portfolio of revenue-generating products including Corrigo and Building Engines, primarily serving clients in our Real Estate Management Services business.

Since being formalized as a segment in 2022, Software and Technology Solutions have matured strategically and operationally, and the segment has meaningfully progressed in its path to be profitable in full year 2026. Given its maturity and focus on serving clients in our real estate management services businesses, effective January 1, Software and Technology solutions will run as a fifth business line within the Real Estate Management Services segment alongside Workplace Management, Project Management, Property Management and Portfolio Services. Going forward, this new structure will allow us to further scale the business align on the most effective and client-centric go-to-market approach and fully realized top and bottom line synergies.

With that, I will now turn the call over to Kelly Howe, our Chief Financial Officer, who will provide more details on our results for the quarter.

Thank you, Christian. I'm pleased with our third quarter results overall, highlighted by an acceleration in top line growth, robust profit and margin increases and strong free cash flow generation. The revenue growth, which came on the back of a tougher comparison, reflects the strength of our platform and people as well as the continuation of our strong momentum in driving client success across multiple services.

Growth was led by our Transactional businesses, which outpaced a slight deceleration in resilient revenue growth that was in part the result of our active decision to exit certain contracts that didn't align with our desired long-term margin profile. Our profit growth materially outpaced the increase in revenues despite headwinds from a few discrete items. We continue to invest to drive long-term growth in the context of the ongoing market recovery and long-term secular tailwinds for our industry. At the same time, we remain very focused on enhancing our platform leverage and see ample opportunity ahead to drive further margin expansion.

Now a review of our operating performance by segment. Beginning with Real Estate Management Services, client wins and mandate expansions continue to drive strong performance in Workplace Management as incremental pass-through costs augmented mid-single-digit management fee growth. On a 2-year stack basis, Workplace Management revenue increased nearly 30% for the quarter, consistent with the prior 4 quarters and reflective of both the value we bring to clients and the significant market opportunity. New and expanded contracts largely in the U.S., Australia and India drove double-digit Project Management revenue growth with low double-digit management fee growth, supplemented by higher pass-through costs.

Within Property Management, revenue growth was tempered by the anticipated elevated contract turnover we mentioned last quarter. The overall segment revenue growth, along with a notably lower gross receipts tax expense, more than offset headwinds from the favorable prior year impact of incentive compensation accrual timing and certain discrete items, leading to higher adjusted EBITDA and margin. Looking ahead, we remain confident in the trajectory of the Workplace Management business as our sales pipeline is strong and contract renewal rates are stable. Given the time to onboard new business wins and as we lap tough comparisons, the near-term growth is likely to moderate.

Within Project Management, client activity remains healthy, positioning us for continued momentum into the fourth quarter. In Property Management, we anticipate the elevated contract turnover we are actioning to continue to dampen revenue growth through the middle of next year, offset by an improved margin outlook. From the segment overall, we continue to target healthy annual margin expansion, though the quarterly progression is not likely to be linear as we balance investing to drive long-term growth and profitability with near-term business performance.

Moving next to Leasing Advisory. Revenue growth accelerated despite a tougher comparison. On a 2-year stack basis, Leasing revenue grew nearly 30%. Growth was broad-based across major asset classes led by office with continued momentum in the U.S. Globally, office leasing revenue growth accelerated to 14% and notably outpaced the 2% increase in market volume, according to JLL Research highlighted by U.S. outperformance from both higher volume and deal size.

Industrial leasing revenue grew 6% globally, driven by continued strength in the U.S. The increase in Leasing Advisory adjusted EBITDA was primarily driven by Leasing revenue growth, mostly offset by the year-over-year impact from the timing of incentive compensation accrual. Absent this phasing impact, the incremental margin would have been much closer to our historical norm, which we continue to target on a full year basis.

Looking ahead, we entered the fourth quarter with a healthy Leasing pipeline as client demand for high-quality assets continue. Business confidence as measured by the OECD has been resilient over the past year in the face of a dynamic macro backdrop providing reason for cautious optimism for continued growth in the near term.

Shifting to our Capital Market Services segment, growth trends accelerated across each business line, most notably within Debt Advisory, Investment Sales and Equity Advisory. Strength in debt markets and an improvement in bidder dynamics drove a 47% increase in Debt Advisory and 22% growth in Investment Sales on the back of more challenging comparisons. On a 2-year stacked basis, Debt Advisory revenue grew 68% and Investment Sales increased 37%. The increase in Capital Markets Services adjusted EBITDA and margin was largely attributable to the higher transactional revenues, partly offset by the $7.2 million of incremental expenses associated with loan related losses. The majority of these expenses were related to the closing of the loan where fraud was associated with the borrower that we discussed in prior earnings calls.

Looking ahead, our global Investment Sales, Debt and Equity Advisory pipeline remains strong, and we are encouraged by the highly liquid capital markets, increased fundraising activity and improving bidder momentum. The strength of our differentiated data-driven global platform positions us to continue to gain market share globally.

Turning to investment management. Revenue growth was driven by higher incentive fees. Strong growth in our U.S. core open-end funds mostly offset the impact of the large client asset dispositions in fourth quarter 2024, resulting in largely unchanged advisory fees from a year ago. We've raised $3.4 billion of private equity capital year-to-date compared with $2.7 billion for the full year 2024, reflecting continued strong demand for credit and core strategies. Capital raising and valuation increases led the sequential quarter increase in assets under management. As it takes several quarters to deploy new capital, we expect a gradual recovery in advisory fee growth over the coming year.

Moving to Software & Technology Solutions. Double-digit growth in software revenue was mostly offset by reduced discretionary technology solutions spend from certain large existing clients. We remain focused on attaining sustained profitability of our direct revenue-generating technology businesses. And as an extension of Christian's earlier remarks, driving closer alignment as well as top and bottom line synergies between our technology products and core businesses. Of note, we no longer include carried interest in the segment performance and have recast historical financials accordingly.

Shifting to free cash flow, balance sheet and capital allocation. The higher free cash flow in the quarter was largely due to improved collections and earnings growth. Year-to-date free cash flow achieved its highest level since 2021 and in part reflects our ongoing efforts to drive working capital efficiency and approve upon our long-term average free cash flow conversion ratio of 80%. Our free cash flow generation contributed to a reduction in net debt, which, along with higher adjusted EBITDA over the trailing 12 months, led to the improvement in reported net leverage to 0.8x. We continue to manage to a full year average leverage ratio of 1.0x, the midpoint of our 0 to 2x target range.

Capital deployment priorities remain focused first on driving organic growth and productivity across business lines. Our acquisition pursuits remain focused on augmenting organic initiatives that enhance our capabilities and deepen our client relationships across multiple business lines, particularly within our resilient businesses. Returning capital to shareholders remains a high priority. In the quarter, share repurchases totaled $70 million, bringing the year-to-date total to $131 million, notably above expected full year stock compensation dilution and full year 2024 repurchases of $80 million.

Looking ahead, we intend to continue to at least offset annual stock compensation dilution with the total repurchase amount depending on the broader operating environment, other M&A or investment opportunities, valuation and leverage outlook. Regarding our 2025 full year financial outlook, the market backdrop overall remains constructive despite mixed economic indicators in the evolving policy environment. Given our strong year-to-date performance, pipeline and underlying business trends, we increased the low end of our full year adjusted EBITDA target range by $75 million, resulting in a new range of $1.375 billion to $1.45 billion. Additionally, our consistent progress in margin expansion and focus on operating efficiency has put us on track to achieve this year, the low end of our midterm adjusted EBITDA margin target range. This is in line with our original time line provided in November 2022 and consistent with our expectation of achieving the margin ahead of the top line target, reflecting our continuous commitment to drive stakeholder value.

Christian, back to you.

Thank you, Kelly. Back in 2017, we communicated our Beyond strategy backed up with a financial target for 2025. Since then, we have demonstrated a consistent ability to both raise and achieve our margin targets as a company. As we near the end of 2025 and approach our midterm target margin range, we are actively developing the next evolution of JLL's strategy charting the path to top and bottom line growth to 2030 and refreshing our financial targets, which we will share with you all during the first quarter of 2026. We are encouraged by improving tailwinds for our industry as well as the opportunity to fortify and scale the contributions of our resilient and transactional businesses. There's significant runway ahead for our company to continue to drive long-term value creation.

I would like to once again thank all of our colleagues around the world for their resilience and collective focus on delivering for our clients and shareholders. We're excited to continue building an even stronger leading business with you all in the years to come.

Operator, please explain the Q&A process.

[Operator Instructions] Our first question will come from the line of Anthony Paolone with JPMorgan.

My first question revolves around Property Management and REM, just more broadly. You talked about moderating growth there. And I just wanted to make sure I understand, was that for the broader business segment? And can you put some brackets around what that means? And just also like what is the reason for the churn and on Property Management and what's kind of the drag there?

Anthony, it's Christian. As we explained, we have taking our Property Management business into a global business line last year, and we are evaluating now all the different country businesses, the profitability of those businesses and we are really focused on driving margin in that business. And so we are getting out of some of those contracts, most notably in Asia Pacific, and so when you look at the overall growth ratio, it is muted, but there are still areas, especially here in the U.S., where we still show nice single-digit growth in that business.

So I guess if we move away from Property Management and just think more broadly around like traditional outsourcing and facilities, I think is there any real change in what's happening with the growth rate there?

No, not at all. That business is still striving ahead very strongly. As you saw, we had really strong growth in the quarter and our Project Management business was plus 24%, and our Workplace Management business was plus 8%, and we see that continue going forward as we have said multiple times. This is a long-term trend, and we don't see any kind of barriers to that trend. So what you see within the Property Management business, it's still a result of us taking a very localized business within JLL now into run as a global segment and we have seen just contracts, which we don't want to pursue longer term, but these are all pretty much exclusively down in Asia Pacific.

Yes. Thanks, and maybe I'll just layer a couple of thoughts on top of that. For our Facilities Management business, as Christian noted, we do expect continued growth over the medium and long term. That's, of course, not linear. And just given timing of some contract ramping and things like that, we do expect a little bit of moderation on top of some particularly strong comps in prior year as well over the next couple of quarters. On the Property Management side, as Christian noted, we are taking a hard look at a set of contracts and intentionally making choices in order to drive margin. We expect that process to continue through the first 2 quarters of next year as well, at which point we expect to have kind of turned the corner on that and be looking at on a more global basis, a positive growth outlook.

Okay. Got it. And then just my follow-up is just as it relates to free cash flow, it seems like the conversion there is tracking and you're just inside your leverage target. So just trying to bridge like the buyback and whether or not that ramps up more dramatically in the next couple of quarters or not?

Well, as you have seen, we have ramped it up already in the third quarter, and you can probably assume that this is describing a bit of a trend. Leverage ratio is now very low. And as long as we don't identify any really strong M&A opportunities, which will add immediately value to our shareholders, we will continue to see the repurchasing of our shares as a very attractive use of our cash.

Our next question will come from the line of Stephen Sheldon with William Blair.

Christian, on your Agentic AI solutions, I guess as we think about that from an investor standpoint, where could we start to see some of these solutions impacting financials? Is it a combo of both producer productivity gains that could help top line growth along with efficiency gains and the cost structure. And then is there any detail you can share on where you've seen the biggest benefit so far as you look across the organization?

Yes. For the time being, the main benefit is around efficiency gains. What we are doing is we are going thoroughly through all our processes within the organization and define those processes, if possible, move those processes in one of our shared service centers and then within the shared service centers within a couple of months, they are trying to replace some of that by using AI tools in order to take those efficiencies up. And that goes across the board that is within our support services, but it is also within our business lines. So we see productivity, for example, going significantly up in our Capital Markets business where the revenue per head is going up very significantly. And it's not only because the market is more supportive, but we have a whole load of tools, which are supporting our brokers to drive their efficiency.

Got it. Very helpful. Maybe then on Capital Markets, I guess, how are you thinking about trends there heading into -- I guess we're talking more than a month through the seasonally important fourth quarter. I know deal closings can always shift the timing of revenue recognition out some, but we think you have decent visibility given the time it takes for deals to close. So just how are you thinking about it? What have you roughly factored into the guide for the year? And what does the pipeline look like as we think about heading into 2026?

Well, as you have seen, the pace of growth accelerated in the third quarter quite significantly. And there is good momentum while we moved into the fourth quarter and frankly, we don't see that changing. The healthy bit about that is we don't see a hockey stick recovery. We see a very steady recovery of the capital markets transaction volumes in the U.S. but also around the globe. And so overall, our outlook for that business is very positive.

Got it. Good to hear. And maybe can I sneak one more in, just in. I am -- I might be wrong on this, but I think this is the first time in a long time where AUM was supported by modest valuation increases. So does it seem like we've maybe started to bottom out for CRE valuations just I thought that was really interesting to see.

Yes. Indeed, what we have seen is that we have had a small increase in underlying value. So we should read that as that the values have bottomed out, and we are now going on a slight increase again going forward. Overall, the outlook for that business is healthy. We specifically, within our own organization, we had a strong equity raise in the third quarter. And as you know, that will then translate over the coming quarters into more assets under management and so it's a very predictable and therefore, a nice income stream for us.

Our next question comes from the line of Alex Kramm with UBS.

Just maybe coming back to the first questions on the Property Management and the exiting. If I heard you correctly, Christian, you said that this is primarily in APAC and the U.S. still grew 2%. So if I heard the 2% correctly, without being disrespectful, that still sounds like a pretty soft number. So just wondering if some of the kind of changes are also weighing in that business? Or if there's anything else going on and what do you think the growth of that business once you get through all this could ultimately be again?

I don't think I said 2%, if I'm not mistaken. I said mid-single-digit growth in the U.S. So not that, that is super exciting, mid-single digit, but it's at least more than 2%. So the decline is coming from -- the overall decline is coming from APAC only.

Okay. And in terms of whether the business could ultimately be in terms of growth, again, sorry if I misheard you, but mid-single digits, like you said, is still probably upside to that over time?

Yes. I mean we have higher ambitions than that. But just when you bring a business like this together, there's a lot of structural work to be done. And we don't want to get ahead of ourselves. We want to deliver exceptional services to our clients. And so you have to be mindful of how much new business you are taking on in a period like that. And we are very focused that we are getting to the right clients and delivering that outstanding service, what they would expect from JLL while we do that restructuring within that business.

Okay. Fair enough. And then secondarily, just quickly on industrial leasing, it sounds like good increase. But if I look at that slide that you have on it still fairly much below where we were in the last few years. So anything that you're observing to get kind of back to normal in that business? Yes, any trends you can share?

Yes, I can take that one. Industrial leasing actually performed better than we would have expected. Our Leasing revenue globally in industrial was up 6%, up 9% in the U.S. The U.S. number comes on the back of very strong growth in the first half. I wouldn't read too much into kind of a quarter-by-quarter change. We feel really good about the pipeline. The other thing that I would just note is that if you look at our industrial leasing growth on a 2-year stack basis, we feel really good about that performance relative to the overall market performance.

Our next question comes from the line of Jade Rahmani with KBW.

Capital Markets historically is the industry's highest margin business. I remember HFF margins were always in the 25% range. So how much upside in margins do you expect that business to have. And if you could put any parameters around it and say, the near to medium term, that would be great. I see a lot of opportunity to further scale that business.

Thanks, Jade. I'll take that one. We don't provide, as a reminder, kind of segment-specific margin outlook. That said, given your question, we see a lot of upside in that business as well. As a reminder, as we went through kind of the downturn over the last couple of years, we really did not let go of our producers. And so we maintained that very strong cohort of producers and there is more productivity within that cohort that we believe we could achieve. And then to your point, there is a lot of leverage on the platform in that business. And so we see plenty of runway for margin expansion in our Capital Markets business.

On the multifamily loss, we've now seen multiple real estate services companies take broad charges and increase their reserves. Greystone, which is owned in joint venture by Cushman & Wakefield, had large charges. So I think that in your comments, you alluded to one instance of fraud, which was a legacy issue. It didn't sound like the charge was related to newly uncovered issues. So could you provide any commentary around the credit trends in multifamily and the context for that charge?

Sure. So we actually had 2 loans with confirmed fraud. So one of those loans, we completely closed out this quarter, the loan with the enhanced loss sharing that we've spoken about in prior quarters, completely closed out in the third quarter, a very, very small portion of the charge was associated with closing that out.

There was a second loan with confirmed fraud as well, that as you will recall, we repurchased from Fannie. The underlying property and loan was sold in October 2025. We believe that's in very good standing at this point.

We did take a portion of the charge to cover the sale of that property and loan. And then we just have a normal course of business. We're constantly evaluating the portfolio of loans. And so we adjust our CECL reserves quarter-over-quarter. There can be volatility in those CECL reserves quarter-over-quarter, just depending on what we're seeing in the macro environment and with specific loans.

And so a portion of the charge was associated with the CECL reserve change. If you look at our CECL reserve, again, like I said, that can be volatile quarter-to-quarter. We took a bit of a charge this quarter. But if you look at it on a trailing 12-month basis, we're up $700,000 in net CECL reserves.

Okay. So that sounds fairly modest to me and not indicative of broader deterioration. So is it safe to assume most of these charges related to the fraud instances?

I'm sorry, could you repeat the last part of your question?

Is it fair to assume that the predominance of the charges related to the fraud issues rather than the general CECL reserve?

Yes. It's about a little more than half is associated with the 2 loans that we previously discussed.

Our next question will come from the line of Mitch Germain with Citizens Bank.

The low-margin contracts that you're exiting, is this happening as the contract concludes. So is it safe to assume that we've got a couple more quarters and then that they all burn off. Is that the way we should think about it?

That's exactly right. So as we've gone through and done a pretty intensive portfolio review in our Property Management business. As we noted, we've identified some contracts that just don't make sense for us over the medium and long term, it takes a bit of time to exit those contracts. There are a lot of people associated with them. As you know, we want to make sure that there is a smooth exit from any situation where we've been actively serving a client. And so I would expect continued contract churn, again, very intentional in the Property Management business probably through about the first half of next year.

Got you. That's helpful. And then Christian, maybe broadly speaking, I know that there is some really good momentum across fundraising and also your investment sales business. But we're hearing about some pullback from institutions in terms of their real estate allocations. Are you seeing any of that with regards to your discussions and across the board with your -- either your customers or your talent?

Not really, to be honest. We have -- as we saw -- as we spoke about earlier, in the second quarter, we saw a little bit of hesitation from overseas investors with regards to the U.S., but that has smoothened and we are now back into the longer-term allocations of their investments to the different geographies. We see pretty healthy interest from Asian and Middle Eastern investors to increase their real estate allocation. And so overall, I don't think that there's anything material changing to the long-term trend there that we have roughly 12% being allocated to real estate.

The challenge, which may be there is that there is just too much little -- too much product coming to market. I mean, the new build is at a very low level. And so the scarceness of institutional graded product is just becoming more notable, and that is one of the reasons why for the best products, prices continue to rise.

Just as a follow-up, are you -- is that a suggestion that you think the cross-border capital allocation is going to start to improve?

Directionally, yes. Especially when you look at relative attractiveness, there were some hopes that Europe would come out of the woods faster, which hasn't materialized so far and therefore, the relative attractiveness of the U.S. has increased over the last couple of months, and we can immediately see that by the interest from overseas investors to invest into the U.S.

Our next question comes from the line of Julien Blouin with Goldman Sachs.

Yes. I guess first just on margins. I mean, Leasing top line growth is strong, but I guess the incremental margins were relatively subdued. And I think you called out the timing of incentive compensation accrual timing. I guess just taking a step back, does it feel like the compensation environment for leasing brokers is getting more competitive and making it may be more difficult to realize some of the incremental margins we would otherwise expect.

I think -- I'll take that. I think the market for talent is always competitive, to be quite honest. We continue to -- I feel really good about our broker talent. We get a lot of interest, and we have a lot of stickiness around the brokers that we do have because of some of the investments that we've made in the platform that we provide. And I would say the same on the recruitment side, we get a lot of people who are quite interested in coming over to JLL because of the platform investments that we've made. I don't see retention and recruitment as a significant headwind to profitability in the Leasing business or incremental margins.

Got it. Okay. And then maybe stepping back, just margins more generally, do you still feel like you're on track to get to your sort of midterm margin targets that you've touched on in the past? I think there were sort of 16% to 19%. And also, is the plan when you sort of come up with these 2030 targets to update those sort of margin targets as well, and more generally, I guess, why sort of persist with giving these longer-term targets when the longer-term visibility can be challenging in your business?

So on the first part of your question, we do believe that we are on track to achieve the lower end of those margin targets that we had put out in 2022. So we feel quite good about that. Christian, perhaps I'll turn it over to you to talk about kind of the 2030 targets and longer-term visibility.

When we did the work for our strategy up to 2030, we were very encouraged when we went into the detail of the different service lines how much organic growth opportunity we are able to identify and you pair that with the opportunity AI is offering to our industry, which will help us to become even more efficient and on a continuous basis going forward. So I think we have good reason to believe that the margin trend, which we have shown over the last couple of years will continue going forward.

[Operator Instructions] Our next question comes from the line of Seth Bergey with Citigroup.

I kind of want to go back to your comments on AI. How does it change the way you think about kind of your current head count needs and your future head count needs across kind of the business?

Well, as you will have observed, our overall head count is still growing, and we expect that to continue to grow, but that is very much driven by on-site colleagues who are working directly on the build environment of our clients. We also have a very strong growth of head count within our shared service centers, because the more you are able to define processes, you are able to move them into centers of excellence is.

Where we see a more flattish development around head count is in our front offices, because the people working in those front offices are so strongly supported by the technology which we are offering that they are all becoming significantly more productive in what they are doing.

Okay. Great. And then if I could just go back to kind of the comments on the REMS kind of growth business. And just a point of clarification. I think kind of on the prior call, you had talked about kind of expecting it to grow in the high single-digit, low double-digit range kind of for revenues on an organic basis. Is the comments on the Asia Pacific, is that -- and kind of the growth being kind of high single digits. Is that specifically for the Project Management revenue? Or is that kind of the overall REMS business as well?

That comment was meant to be for what we historically called our Work Dynamics business, which is growing all in all, high single digits, low double digit and then with the impact now of the Property Management coming into the REMS segment that brings it then overall more towards the high single digit, but the impact is not that dramatic. So you take 1%, 1.5% of the overall growth rate, while we are restructuring that business. And as Kelly alluded to, this will go over the next couple of quarters, but then -- but in the second half of next year, we will see growth coming back into that business. And longer term, we don't believe that the Property Management business will be dilutive to the overall growth of the REMS segment.

And just to clarify, it's our Property Management business where we are seeing some intentional contract churn, not the project Management business.

And that will conclude our question-and-answer session. I'll turn the call back over to Christian Ulbrich for closing comments.

Thank you, operator. With no further questions, we will close today's call. On behalf of the entire JLL team, we thank you all for participating on the call today. We look forward to speaking with you again following the fourth quarter.

This concludes today's call. Thank you for joining. You may now disconnect.

Thank you, everyone, for dialing in today. For those I've not had the opportunity to connect with, I'm Sean Coghlan, Head of Investor Relations at JLL. Welcome to what I hope is an insightful discussion with Richard Bloxam, CEO of our Capital Markets Services business. Richard has been with JLL for over 3 decades and is a member of our Global Executive Board.

Before kicking off the agenda, I wanted to remind everyone that today's call is being webcast live and recorded. A transcript and recording of this conference call will be posted on the Investor Relations section of our website. Any statements made about future results and performance, plans, expectations and objectives are forward-looking statements. Actual results and performance may differ from those forward-looking statements as a result of factors discussed in our annual report on Form 10-K and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statements.

Richard and I are live together in London. We'll start with a conversation on the strategy, evolution and outlook of our Capital Markets business. We'll then open up the call for Q&A. Some of you have already shared questions with us in advance of the call, and I'd encourage you all to submit additional questions through the Q&A function on the Event page at any point during the webcast. We'll address as many of these questions as time allows.

Richard, thank you for being with us.

Thank you, Sean.

You've been the CEO of the Capital Markets business since January of 2017, and the business has been performing impressive results at the top and bottom line over that time period. I'm going to call out just a few metrics to level set here.

Since 2020, revenue growth across investment sales, debt and equity advisory and loan servicing has averaged 10% per annum. JLL's market share has grown to a top 2 position in investment sales and into advisory. And over that time period, EBITDA across the segment has increased twice the rate of revenue growth. And I'd be remiss if I didn't mention, all of this happened through a global pandemic and the largest correction real estate since the global financial crisis. How have you seen JLL's business evolve over the past decade to enable this strong performance?

Thanks, Sean. Well, it's certainly been a very interesting period since 2020. Look, I think, first of all, we're informed by the macro trends in the industry, and we have witnessed, in the last 20 years, but particularly in the last 15, an increasing diversification of how investors invest in real estate.

And I think if I look back to the global financial crisis, we were very heavily weighted to investment sales as a business, not too far off the entirety of our business. But as investors look to invest across debt instruments, entity level, fund level as well as buying traditional assets as sales, we've been able to mature and develop our business, too. And that has a couple of effects. One, it makes us a much more strategic partner than we would have been when we were really execution focused on an investment sale. And secondly, it helps us provide a much more resilient business.

If I think about that weighting to investment sales, it meant that in the 2008, 2009 period, we had real profitability concerns, whereas in the depths of the difficult market we've just been through in 2023, we were still able to generate an EBITDA margin of $170 million. So I think the clients have changed how they allocate to real estate, how businesses evolved to meet those needs. And we've also created a lot more diversification in our revenue streams.

One thing that we talk a lot about is how you -- how part of that has also been building out our loan servicing business, which has grown, our value and risk advisory business that has introduced some additional resilience to the segment overall.

Absolutely. They're both very resilient businesses, and we continue to look to grow those activities in our portfolio.

I'd like to double-click a little bit on the debt advisory business because it's been a significant growth component of the business overall. Since 2020, top line growth in our debt advisory business has averaged 14% per annum. And over the past 12 months, that business has been growing at 2x the rate of the investment sales business. For those who are not familiar with it, can you provide a brief introduction to what the debt advisory business is for our industry? And can you talk us through the drivers behind that growth?

Well, at its simplest level, we brought about a service that facilitates achieving the best possible financing terms for a borrower to meet their return requirements, and that industry feeds off an annual transaction volume a 5-year average of about $850 billion-ish of debt financings across construction financing, refinancing and debt origination.

So for me, we have a backdrop of a very active market. I think a really interesting evolution of that business has been the proliferation of different lenders. The fastest-growing component of which has been debt funds. And the debt funds, for those that aren't aware, are really run by the same companies that are also our clients in our investment sales business and across the broader JLL enterprise as investor clients. So it's a very natural area for us to grow into.

But the backdrop of many different choices that lenders -- that borrowers have is providing us an opportunity to provide insight and value to those borrowers in a way that's really dramatic. I'm particularly excited. We inherited an incredibly strong debt business when we acquired HFF. But also, we've been rapidly growing that business in -- outside the U.S. as well, with the fastest-growing element of that being in Europe, where we've over-doubled the revenues we've generated in debt advisory since 2020.

You bring up HFF, and that's one of a few different big strategic shifts that we've made over that past decade. That acquisition happened in 2019. In 2022, JLL also announced a significant organizational shift, from a geographic-centric model to a global business line model. Can you talk through how those decisions, in particular, have contributed to the outperformance we've been talking about?

Sure. When I first took on the role in 2017, it was clear that we didn't have the scale that we wanted, or frankly, that our clients needed to be able to provide value-added services to them across the U.S. And with the HFF acquisition and from a capital markets perspective, I'd very much go to the merger, we were able to bring on board an incredibly talented cohort of leaders and experts in the real estate capital markets.

What I really admired about the business was that they'd already gone down a journey of providing the range of services that met clients' needs. They'd already created an investment banking practice. They'd already created loan sales business. They had already developed an association with the derivatives partner. And so they were thinking very much along the same lines that I was, and so that's been a very big impact for us.

I think you shouldn't underestimate the importance of culture in our real estate advisory industry. And you want to create a culture where there's no inherent competition within your teams. And so that the team is all marching to the same tune, which is to bring -- leverage our shared insights and intelligence across the platform.

And so the other thing that HFF have done, had invested quite heavily in technology in a data platform, and that was also the same direction of thinking that I was having with the broader group. We also inherited some fantastic leaders, many of whom are still with the business today, and we go from strength to strength. And some of the market share that we've been generating as a company, we're now -- we've expanded our market share in investment sales globally by 200 basis points since 2021, and we've outpaced that in the U.S.

I would add that market share isn't necessarily our destination, but if you've got the right people with access to a good platform, we think that's the natural outcome of doing that well.

You mentioned technology, and I want to do a little bit of a deeper dive into AI, specifically at JLL, specifically for Capital Markets. We have talked externally about JLL's AI platform and products as well as the focus on accelerating productivity but also operating efficiency across the businesses. How is the technology strategy evolving for the Capital Markets business? And what do you see as the future role for AI in Capital Markets?

The way that we look at technology within the company, but specifically in Capital Markets, is that it's very much an enabler of our business, our people. I don't think you can separate your overall strategy from a technology enablement strategy. So it's very much integrated. We've been building an ecosystem that allows our people to clean debt insights, value insights, sales insights. When you have that ecosystem working well, then it drives an ability for our people to be more productive than they would otherwise would be, and be able to provide their clients with simply better insights. And clearly, we want to take advantage of being in that position.

I think if you've done all that hard work in making sure your platform is organized, the technology ecosystems in place, you're that much better able to take advantage of all the opportunities that AI can bring. And we're not new to the AI journey. We started early, and we already have platforms that we're developing, leveraging machine learning and our ability to predict which buyer is going to buy an asset, which lender is going to lend to an asset and who's going to buy or sell an asset in the future, is all part of that AI journey.

I think in terms of generative AI, where we're using that most effectively, is in extracting key data points from our meeting notes that people are putting in our systems to allow that unstructured data but organize data to be leveraged within our kind of buyer list and the like.

So for me, the next step of that is leveraging Agentic AI, and I think there are enormous applications for our business in improving process efficiency and augmenting what is already a very high caliber, human intelligence organization with artificial intelligence. So we're very excited, and we feel very well prepared for that evolution.

We've been operating in a more dynamic market environment for a number of years now. I did want to take a pause and talk a little bit about the market. We get a lot of questions from shareholders and investors and analysts around our outlook for the markets. How are you thinking your -- about our outlook for 2025 in Capital Markets?

Well, we've seen a gradual increase in activity since the summer of 2024. And I don't think we were predicting a hockey-stick return to activity. But there are a few ingredients that were coming together, a few different elements that were creating a confluence that meant the market is beginning to come back to more activity.

I think one is we're -- the beneficiaries of a very liquid lending markets. I described that a little bit earlier when we were talking about the debt advisory business. If you combine that with over 585 billion of dry powder at the end of last year that's raised in closed-end funds looking to be deployed, you don't have a lack of capital that's looking to invest in the real estate investment markets. What we were missing was -- and ask that the bid was prepared to get to. And we've been seeing that bid-ask spread narrowing and narrowed pretty quickly for some asset classes and it's taken longer than others.

And if you combine that with those investors that have funds that have now done 1 or 2 or even sometimes 3 years of extension on their closed-end funds, their equity investors, their LPs are also demanding capital back. So we're seeing a bit more, what might be termed as capitulation in terms of pricing. That is all feeding into a more constructive pipeline for us as well as more transactional activity. And we see that with our bid momentum index. We see the bid intensity index improving or certainly, the decline has moderated, and we would expect to see a good and, I think, moderate but improved environment for investment transactions going forward.

We're now in an environment where more central banks around the world are cutting rates. How do you think about the impact of that rate cutting cycle on our business? Is it a catalyst for growth? Is it a risk? How should we be thinking about that?

I think if you look over time, the most important thing for the real estate transaction environment, and frankly, for any business leader to be making kind of decisions with confidence, is a stable interest rate environment. So we definitely don't need interest rates to go down for the market to continue to improve. So I think stability is probably more important than a direction one way or the other.

What the industry really struggles with is very large and quick changes in the cost of capital, whether that's debt or the equity markets. And so that's what you saw really in the period of post-COVID period was with inflation rapidly accelerating, central banks rapidly changed the cost of the capital. And the real estate industry struggles with indigestion when that happens. So a stable environment, if interest rates continue to slowly moderate down, then that will be advantageous. But we also have a very competitive debt market with spreads already tightening because of that competition.

Let's talk a little bit about over the mid- to long term. We've talked a lot over the years around the kind of bigger thematics that have been driving the macro landscape and the opportunity for our Capital Markets business. What are the market thematics that you're most focused on today? And if you reflect on the more dynamic environment over the past few years, how at all have those thematics that have been underpinning your strategy changed?

I think the diversification of exposure, both by the part of the capital stack in which the investor is prepared to invest, the willingness to invest in an entity or a platform level, not only at an asset level, as well as the broadening of the range of asset types that investors are prepared to lend and invest in, have all been thesis that I think we spotted and has contributed, I think, to part of our growth.

As I look forward, I think that cycle, from an asset class being relatively nascent to being institutional has compressed, that time frame is compressed. We're very excited about the evolution of the digital economy and what that's meaning for digital infrastructure, the scale of opportunity, I think, that will emerge in data centers, but further down the line, quantum computing.

If you look at advanced manufacturing with a lot of the changes in domestic political approaches about getting jobs and manufacturing back in domestic markets, that's creating a demand for advanced manufacturing, all of which has high energy needs, which is another component of our business, which is evolving quickly, which is our energy and infrastructure capital advisory capability.

So I think, on an asset class level and an investor allocation approach, those are themes that we've seen.

I think the other is the proliferation of retail capital and how it's trying to get into the private market, so which real estate is clearly an important component. And that's coming in several channels. That's ultra-high net worth, family offices, high net worth individuals investing directly in real estate, financial instruments and assets, but also with rapidly changing regulations around the use of pension fund money in direct real estate investments. We see these as very positive tailwinds for the capital looking to get deployed in the asset class.

And how much has that changed? If you think about how capital is thinking about the market and the landscape relative to maybe how we were -- where we were in 2018 or 2019?

I think it's just an increasing sophistication. And what the client then demands of us is much higher quality advice, much more strategic partnership. And they're looking for insights. And so one of the compelling propositions, I think, for our business, but also a compulsion for us to provide, is access to the best quality insights in the industry, and we're very committed to doing that through great people and excellent platform with access to technology and data that's world-class.

Yes. It brings me to our last question before we open it up for Q&A. And as a reminder, anyone is welcome to submit questions through the Q&A function as we're going through the call.

When you reflect on all that's been achieved in Capital Markets as well as our positioning within the industry, what do you view as the competitive advantages that JLL has developed?

I think I'd start with people and -- both the individual quality of the employees in the business, but also the combined culture that we create. I think it's very important that you have teams that are willing to bring the best out of each other, that share insights with one another to bring the best results for the clients. And you can do that both in a traditional analog way, but you can also increasingly do that, and we do through technology. And you don't create that ability to provide leveraged insights across the platform if you don't have the right culture in place. So we -- I would say that's a primary differentiator.

I think the second would be around platform excellence. As we move to the global vertical, which you referred to earlier in the discussions, this is not necessarily about centralizing or globalizing, it's about standardizing and creating an efficiency in our delivery platform. We've worked very hard to create that structure. That's not just about technology and data, but it's also about governance and operating excellence. I think those are things that are also a differentiator at the firm.

And clearly, we have a global footprint, not everybody has that. And for our biggest clients who, I think, is a trend of being growing increasingly large, being able to marry up our services to those investors that are investing around the world, at the same time as providing the very best service to clients in a local context, is something that we feel is a real differentiator for us at JLL.

Excellent. We're now going to transition to the live Q&A section of the agenda. Thank you to everyone who has already submitted a question. As a reminder, as I just said, anyone is welcome to submit additional questions through the Q&A function. We'll respond to as many as time allows.

So the first question we have Richard, how do you measure the impact of the technology and platform investments you've made in the Capital Markets business?

Well, I'll refer a little back to my previous discussion point, which is that we see the people and the technology ecosystem as one. It's an ecosystem that can't be successful on its own without the other. And so when I think about how we measure the effects or the impacts of that technology, sure, we have the same metrics that any product-oriented organization would have around utilization, time spent in particular applications, and whether it's creating efficiency or productivity improvements.

But overall, I think we are seeing the combination of platform culture, people and technology manifest itself in sustained revenue and margin growth and market share as an outcome rather than a destination itself. So that's how we think about technology and its impact on the business.

Yes, there's certainly been a focus on enablement and tech enabling our people to be the most productive and efficient and how they're operating for clients.

Absolutely. Yes, it's an essential component of the strategy.

How has the makeup of our client base evolved in Capital Markets? And how do you expect it will evolve in the future?

Sorry, the?

The makeup, the construct of clients that we're interacting with.

Okay. Yes, sure. Well, I think being a global footprint and both being represented on the ground in a local market context as well as globally, I think probably the biggest trend that I would say is when I first started in this role in January 2017, and the average assets under management of the big investment managers were somewhere around 100 billion. Although the largest investment managers had 100 billion, whereas now, there are a plethora of those groups that are significantly ahead of that multiple hundred millions, billions under management. So that's a significant shift in the concentration of capital amongst a fewer number of investors. And that's been a shift in how the industry works. And clearly, we're well set up to solve that.

And I think the other area that you see is the advent of retail capital. And that manifests itself also in a lot of what I call mid-market trades sub-25 million, I think finding out $25 million in value, sorry, to be specific. And I think there's also a huge opportunity for the industry to provide a better quality service in that space.

Double clicking on that for our next question. What are you seeing in terms of activity from the more sophisticated CRE investor base, so thinking out probably the more core groups. And are they becoming much more active in recent months?

I think the recovery period out of the last 3 or 4 years of very volatile markets is following a little bit of a similar pattern to post-global financial crisis, where the higher return or value-add investors move first. And we've absolutely seen that happen this time around as well.

There's no doubt we're seeing more institutional bidders on all the products we're bringing to market, and we expect that momentum to continue, so that you have the full range of return criteria investors. I wouldn't necessarily call institutional core investors more sophisticated or less sophisticated, but they certainly have a different approach to risk-adjusted returns.

And yes, for the real estate markets to be truly dynamic, you need the full spectrum of return and risk profiles to be active because that's what creates buyers and sellers in any given situation. So the momentum around institutional investors, core and core plus, is certainly positive, but it's still nascent.

Okay. How would you characterize the current backdrop in terms of attracting and retaining producer talent?

Well, first -- first and foremost, I would say that we focus on our own business. We're very conscious there's a market out there, but I don't control what happens in the external market. But me and my colleagues leading the Capital Markets business can certainly control what we're doing. And so we emphasize what we can do in terms of offering producers that are already in the business, but also those that we're trying to bring to our platform, the benefits that they wouldn't receive anywhere else. And that includes the culture that includes a productivity level per producer, which we believe is comfortably at the higher end of the industry and a technology platform that is unique. And I think it's that combination that we focus on in terms of attracting and retaining the best talent in the industry.

We also have an evidence of what our high water mark in revenue per producer can be, which was in 2021. Now that was a slightly unusual year in terms of the dynamics. But we know inherently that even with our existing teams, we have plenty of room for revenue and incremental margin to be derived for our existing teams. That absolutely does not mean that we want to go out and hire good quality people, good talent, and there are clearly areas around the world where we feel like we've got an opportunity to take that group in and drive it.

But what you definitely won't see from us is just chasing market share by hiring talent for the sake of hiring the talent. What we will continue to do is focus, first and foremost, on revenue and margin accretion of our talent base, and the market share will be a happy outcome of getting that right.

The recovery in the CRE Capital Markets has been gradual. Are you seeing the market shift gears into a more robust phase of recovery?

Yes. I think if you look at the range of data points that we see, the number of bids per deal, the concentration of those bids around a common price and the maturity and how prolific the debt market is today, these are all indicators that would suggest there is going to be continued upward momentum in the transactional market.

Clearly, we are in a world where a tweet or a quote can change dynamics pretty quickly. But if things remain stable, I see no reason why we won't see the evidence points where we're getting to see today, continue to provide momentum in the market. We've certainly got the capital available and we've certainly got an increasingly -- increasing willingness from sellers to meet the price.

Alternative capital has filled a void from more traditional lenders, if you think about over the past few years. I think the question is probably referring to the proliferation of private credit in our space. Do you think this trend is sustainable?

I think, going back to my previous comments around LP capital, so the people that are putting investments into the hands of investment managers are looking for access to credit markets. And so this is a demand-led approach. And clearly, in any industry, there are going to be waves when you have more demand or less demand for those kind of products.

I would say at the moment, that's proving very resilient. But even without that proliferation of debt funds, the range of potential lenders still looks very attractive, if you look across the insurance industry across the U.S. with the agencies, money center banks. So I feel pretty confident in the stability of the availability of debt. But sure, the desire to invest in different types of products, obviously, changes through cycles.

Next question here. Where do you think the white space is in the JLL Capital Markets platform? The question specifically calls out geographic white space, property type, deal size.

I think we feel with the market momentum alone, the chance for us to grow is high. I would say that we kept our producer head count pretty steady throughout the volatile market. In fact, we're 10% up. I think it is since 2021, but I can be corrected at the end of the call, but it's been something we've consciously retained that capability.

And so the white space, first of all, is what each of our producers is able to do in a more active market. That said, I think we have a clear proclivity towards kind of mid- to higher value asset sizes, and we've been growing our market share in smaller asset sizes. So that's clearly an area that continues to be of interest to us. And geographically, we would continue to look to expand in markets that we think we has real momentum. And I would call out the growth in the market in India, market share growth in Japan as other areas of real interest for us.

And just to clarify Richard's data point on producer headcount. So producer head count in the U.S. has grown by 10% since 2021. Just metric you're referring to.

As scale and data become more important to the business, have you seen smaller competitors struggle to compete? How do you expect market share will evolve over time as a result of this dynamic?

I think, again, we try to focus on what we can do for the clients that we're interacting with and our ability to leverage insights from around the world, what investors are thinking, what they're prepared to price, what lenders are thinking, what their prepared to price, clearly gives value to scale.

I think it would be wrong to dismiss the notion that a small scale boutique is not always going to have its role in the industry. There is a huge amount of the market, still and particularly outside the U.S., where there is no intermediary involved at all. And so you don't need to kind of run around trying to take market share from other advisers to find a really strong trajectory for growth in gaining market share.

So finding ways of ensuring that those groups that don't believe an intermediary adds any value, that they begin to use more of us, I think, is an exciting opportunity. But overall, I would agree that scale and data advantage together with really talented people is likely, and we would project, to allow us to grow incremental revenue, drive incremental margin and share being the outcome, I think, of being successful.

Next question we have here. Can you talk about any changes to fee structures as the business has evolved to -- more from a one-off principal selling an asset with a broker to large sponsors doing business across a variety of JLL business lines and geographies? I think the question really is, how is JLL thinking about their work and how they structure their work as they're working with clients who they're working with across multiple business lines across the firm?

So what we tend to find with the investor universe in particular, is that they will use companies for various different activities. There is no doubt over the last 5, 6, 7 years that there has been a tendency for the larger clients to try and work with fewer advisers. Like it's complicated if you've got to go to 100 different groups every day. So that evolution to go into a fewer number of advisers means that there's a natural opportunity for JLL to do more work with those clients across a range of services.

And in fact, one of the interesting statistics that came out of our HFF acquisition was that since 2021, we've generated 800 million of cross-selling fee revenue at an enterprise level, which has delivered incremental projected to deliver an incremental margin of around 250 million. So there are real benefits of combining the abilities of our different service lines to service those clients.

I would add, though, that the clients are going to continue to look for best-in-class as well. So it's a combination of strategic relationship allowing you to do more with the same client, but also you can't take your -- you can't put your foot on the brake, you have to keep focused on delivering the best quality service in the specific execution role that you've been asked to provide for that client. So it's a little bit of both, Sean.

Yes. I mean it's part of how our teams work together, too, that I think is a cultural mindset and facet of how we operate as a business, that can be hard for people to understand if they're not working in a gel office every single day.

It's easy to say on a screen like this, but it also happens to be true that it is a really incredibly collaborative culture. And the ability for us to kind of think how an occupier thinks because we're managing occupier space all over the world, provides a level of insight into how we should be thinking for investors and vice versa. So it's a compelling proposition.

What is your view on the longer-term margin profile for the Capital Markets business?

I think we should be thinking about the margin profile of Capital Markets, there's about a 35 to 40 basis point incremental margin in our business. And I would see that the Capital Markets business is always going to need to be at the very upper end of the range of margins that the company is operating in. So if you think about the margin expectations that Christian and Kelly have outlined in the earnings calls, the margin aspiration for Capital Markets needs to be the very highest end of that, if not above.

Excellent. Do you see the potential for cross-border investment activity to accelerate?

That's an interesting question. I was kind of expecting the opposite question, which is that with all kind of geopolitical challenges around the world, where that would be the opposite is the case. Actually, I think cross-border capital is alive and well.

I think the challenge that domestic capital faces is that if it does not diversify, there is always going to be the risk that something goes wrong in your market and you haven't acted in the best fiduciary interest of your pension holders or your insurance holders. And so I don't see an era where, irrespective of tariff policies and geopolitical challenges, that you won't see capital continuing to move around the world.

And I guess one of the key tenets of our strategy and capital markets is to be the most connected real estate adviser in capital in the world. And we say that for a very important reason because if you want to advise a client in New York, you have to know Japanese capital. And if you want to advise a Tokyo multifamily owner, you have to understand capital that's coming to Japan from outside as well as domestic market. So I think it's alive and well, and I don't see any reason why international capital movements won't continue to be an important part and indeed, accelerate.

So one last question from the live Q&A. What are you seeing in terms of bid-ask spreads across property sectors and geographies? How are buyers and sellers thinking about rent growth?

That's a good point to make. I think when I was describing the change in the market dynamics, I think one thing I probably forgot to mention was in addition to there being lots of capital available, the capital has also switched from being laser-focused on the 10-year treasury or 10-year gilts or 10-year bonds, to GDP growth. And that's why you saw, post the September blip in 10-year treasuries for the first time last year in 2024, that the investors really saw through the noise. So GDP growth is a very important underwriter for real estate. It's where real estate, which is essentially where all industry happens, you kind of need GDP growth to create the foundations for rental growth.

The dynamics of the market are too specific to go into here, but there are clearly now with all-time low deliveries or ground breakthroughs for offices. In Europe, it's a 10-year low. In the U.S., it's an all-time low. You're seeing a pressure cooker begin to build around lack of available office space. So that would be one example. I guess, of where rental growth is likely to come through. But it's a very detailed and broad picture and very dynamic city by city, sector by sector.

It's been really interesting to watch the evolution of how people are thinking about the office sector, especially given some of the outperformance at the top of the market and some of the scarcity challenges that we're starting to wrap up against.

It is. It has kind of like an echo of maybe what the retail industry went through in the digitization era. But like all things these days, the cycle seems to move much more quickly.

Yes. Yes. So one lighter question to close the call. You've been in our industry for over 30 years and you've been through multiple cycles. What aspect of the capital markets business continues to energize you the most?

I think our clients are so innovative, and they're constantly challenging us to work with them on what the most effective themes are that they should be following. And I get very energized by how dynamic those conversations are. And I feel much better armed to have those conversations with access to great quality data.

But in the end, me being able to have that conversation doesn't grow a business, doesn't transform our business. So what really excites me is it's frankly that we continue to be able to hire and retain the very best people in the industry, and watching what they can do with access to the kind of information we have and the technology that we're delivering, and we're not the finished article yet, that's what kind of I really enjoy that, to see what they can do with that level of support. It's amazing.

Awesome. Well in closing, I'd like to, again, thank each of you for taking the time to join us today, and to Richard, for all of the insight and perspective into a very dynamic and important part of our company.

Well, thank you for the time, Sean.

Enjoy the rest of your day, everyone. And to the extent you have any further follow-up questions, please don't hesitate to reach out.