JLL’s first-quarter 2025 earnings reveal a notable revival in the office real estate sector. The company reported a 13% increase in leasing activity overall, driven primarily by robust growth in office leasing and an acceleration in industrial leasing. Particularly in the U.S., office leasing rose for the fifth consecutive quarter, surpassing first-quarter 2019 levels, buoyed by several large leasing deals.
Christian Ulbrich, JLL’s CEO and chairman of the global executive board, attributed the leasing business’s momentum to an “increasing return to office mandate.” He highlighted the scarcity of new developments as a key factor supporting continued rent growth, especially in top-tier, Grade A and A+ office buildings.
Ulbrich noted a clear “flight to quality,” with premium office spaces benefiting the most, while some spillover demand is beginning to extend into upgraded Grade B buildings. However, many Grade B properties remain in a precarious position, often constrained by lenders or owners unwilling or unable to invest further capital.
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JLL’s CFO, Karen Brennan, emphasized that a favorable mix of transaction sizes contributed to the company’s strong overall performance. Larger office transactions, where JLL holds a significant market share, were particularly instrumental.
Capital markets services saw 16% growth, propelled by debt advisory and investment sales, reflecting improved investor sentiment, greater interest rate stability, and increased liquidity. Investment sales, which constitute 40% of capital markets revenue, grew by over 35%, while global debt advisory revenue surged approximately 70%.
The positive trends at JLL align with broader industry observations. Cushman & Wakefield, for example, reported that office and industrial leasing fueled its first-quarter revenue gains.
However, the impact of tariffs on business outlooks was mixed among major commercial real estate firms. CBRE expressed concerns about tariffs clouding its future outlook and shrinking project pipelines, while Blackstone has described a “turbulent market backdrop” due to the uncertainties lying ahead despite a strong quarter.
On the other hand, Cushman & Wakefield reported tariffs had “not materially” affected its operations, and JLL did not bring up tariffs in its earnings release or call transcript.
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