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JLL, the world’s second-largest real estate brokerage by revenue, reported declines in leasing and capital markets in its latest earnings report as the industry prepares for what executives hope will be a rebound in deal activity later this year.

The Chicago-based company, which is the last of the six major real estate brokerages to report 2022 financial results, posted a 19% drop in revenue from fees and commissions to $2.2 billion in the fourth quarter from the same time a year earlier. Leasing, sales and other capital markets activity slowed down markedly in the final months of 2022.

The brokerage joined rivals CBRE, Cushman & WakefieldMarcus & MillichapColliers and Newmark in reporting a slowdown in deal activity in the fourth quarter. JLL reported a 7.7% revenue gain to just under $20.9 billion for the full year of 2022, with most of the growth recorded before rising interest rates contributed to capital markets freezing up in the third quarter.

“JLL’s fourth-quarter performance reflected the industry-wide slowdown in investment sales and leasing volumes caused by the rapid increase in interest rates, and the peak of recent inflationary pressures,” CEO Christian Ulbrich said on the company’s earnings call Tuesday.

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Real estate investors are waiting too see how debt markets will develop over the next couple of months before making major decisions, Ulbrich said.

“Especially the last two weeks, we saw interest rates moving up again and spreads widening again, immediately creating an additional kind of irritation to the market,” Ulbrich said. “And so we have just had to be patient and let that go away. We have to wait for the third and the fourth quarter before markets will really return. The first and the second quarter will be slow quarters, especially if you compare them to 2022 where the first and the second quarter were absolutely record quarters.”

 

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