Jones Lang LaSalle (JLL) 3 Aug 232023 Q2 Earnings call transcript

Thank you for standing by. My name is Ian, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2023 JLL Earnings Conference Call. [Operator Instructions] Thank you. Scott Einberger, Head of Investor Relations, you may begin your conference.

morning. good and you, Thank Welcome to Jones conference for XXXX second LaSalle Incorporated. quarter Lang earnings call the Earlier we to slide presentation remarks. this with and along morning, Excel issued our file intended supplement prepared release our earnings the materials website. our These section available Investor on Relations are of the visit ir.jll.com. Please

reference earnings provide of call we our useful GAAP and investors. include in reconciliations information financial Excel and measures, measures in financial the slide presentation for non-GAAP During accompanying slide presentation. which non-GAAP to and release our file, certain we believe We

a recorded. reminder, posted of call today's live As call is be A this webcast being will to and recording our website. transcript and conference

forward-looking Any in any are statements Actual may results and performance, about the those result undertaking on results other in performance company forward-looking filed as factors XXXX, of plans, statements report XX-K expectations our annual a publicly discussed statements. Form future to year and update statements. and disclaims objectives December XX, from SEC. and fiscal made differ revise with forward-looking The any the reports for or

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

elevated lending and real has Federal muted. Reserve standards estate U.S. with uncertainty Overall, in earnings tone capital, thank regards you, the second were XXXX Thank for transaction global the interest estate volumes. markets call. from markets kept coming tighter the unchanged real cost joining Conditions to and all largely second quarter tightening quarter. cycle impacting has consistent and rate inflation our higher limited Scott. of you Hello, The price

sales effectively into slowdown our year-over-year decline while To grew we industry-wide lines a according Commercial JLL and in XX% quarter, second investment Estate second perspective, Real totaled Global leasing to the through this Investments $XXX activity. the also During of the put in Research. managing business billion quarter, resilient

that was quarters, in found the The would support investment second the to with view two regards volumes. last dollars the which seen its transaction over bottom in the with decline market line quarter deceleration has

down office decisions. according to but rates remains with make global to JLL On sequentially second of slower are second modestly the than office for and was the activity Large-scale leasing year-over-year macroeconomic side, to a showing the cautious in are their Global the have from extending XX.X% signs up vacancy leasing second the a activity is first result, market normal, last timeline continue quarter as quarter. XX% XX.X% improvement year. compared the Research. to to quarter in Occupiers outlook up on environment, volume quarter,

in last U.S., Asia remained Pacific declined more to market than compared locations. rental Demand, despite sustainable remaining prime volumes particularly overall best-in-class slowdown U.S. both stable positive the These and continues assets in growth with much the be spaces resilient to leasing have in types high on office the quality proven of and focused in year, Europe with be but leasing activity. volumes the

rates the at three buildings lower-quality We our many space week, which occupancy capacity days quality to leading at high also corporate is employees a office for or to setting to return are observing least peak clients. directing near in while of

a comes revenues these buildings. fee in JLL's high-quality As percentage a transactions or office significant reminder, from of Class-A leasing

activity Turning quarter. moderated sector. the Industrial leasing to Global the second

globally, sector vacancy become grown of boosted benefited and low Industrial Overall, rebound the volumes the international from the coming during services. Europe to has the sectors markets spending the travel tourist have A particularly industrial in Pacific. in to in remain And retail Asia leasing with asset healthy rates we years. expect market retail and Pacific and rental positive revenue. on corridors and has in many quarter, class gross in absorption in and hotel total sector growth showed leasing consumer fee X/Xrd positive also this our in fundamentals healthy net experiences while hotel of markets. slowed. Asia U.S. growth the continue The Europe and The

playing year a largely slightly out and began, incentive during quarter. better the as and property strength second expected, collectively management, growth expected quarter trends these of decline had Overall, revenue demonstrating than well asset business the the given portfolio. in by Technologies of fee and forecasted the business In our highlighted real we in when JLL resilient performed fees our were we though workplace industry-specific stronger LaSalle's in line. estate positive transactions diversification contrast, delivered the business macro lines are second advancement growth this management values

JLL turn will who Before on want more touch detail quarter Karen, I Technologies the the to segment. on call share over the I to

While of build spoke briefing our our business to last platform markets five the the this and our AI-powered is the strategy, we to it of pipeline strategy value at the investor life identify, smallest coming it team using is partner example best opportunities. is our to which by substantial. segments, our clients and core company is about is fall. Perfect the business capital brings analyze our and At source of

real our Technologies step in-house. took a estate that team Earlier this GPT, JLL JLL further secure generative model one of AI unveiling for we week, with this the commercial built

further positioned the in consider you Part out in prop-tech to real or, estate especially commercial transformation projects our are tool better market. examples that in the These playing long-term into of real on tech-driven use provide that insights industry. just are commercial few drive will team clients cases, technology this to even shareholder that strategies, investments beginning value, sector. estate disrupt into translate is efficiencies teams the is the when Our some our of we a companies working current believe with to are

that and to strategic technology will and into reminder, As and clients tools our gain solutions; companies drive to our main productivity; these the a disrupt second, direction. in invest the potentially reasons provide industry with that three best-in-class with to business will technology growth we improve are: enable third, technology insight first, inform

approach subject Venture in investments, have invested is cycles. these Capital we increased a to to during volatility While economic disciplined

capital our these gains losses the loss In rounds. after losses the companies two result, These of of these past from investments. years. in losses, down primarily comfortable second with over we is investment after that a resulted at X.Xx equity few with raising gains original As reflecting Even amount million investment valued generated to quarter, portfolio JLL $XXX noncash came approximately $XXX have portfolio million. equity Technologies a equity the recent be associated the and

The out be continue investments many notably for and companies, dollar companies the than strategic we the than investments more have mature includes while our XX And of portfolio incremental years. less invest will in have Today, and to will three proptech built that clients. we medium-term outlook on a companies. of past these we we focused healthy remains the company benefits to the are bringing of in, invested amount

more will the results will Karen, to on provide detail now turn the I over for quarter. who call that, With our

Thank you, Christian.

Before of described. noted. was of a begin, I the I considering trends fundamental period the backdrop challenging with Overall, am reminder consistent particularly year local that the two the our unless against are otherwise prior with operating continuation pleased Christian in currency, which quarter, the quarters, the past market in variances performance

of improving of At important including the number our good platform. are fixed same reducing on time, we costs capital global a efficiency, working the fronts, making and progress resiliency enhancing

delivering significant and we As a high builds and flow. business, remain the near-term capturing client opportunities both profitability to on level focused across long-term of and service market growth, cash our drive

a $XXX margin of down the in year At $X.X equity A adverse year-ago. revenue XX% reduction. million, earlier. billion, EBITDA the X.X% Adjusted quarter XX.X% fee our change decline XX% for from of consolidated totaled carried a accounted level, of reflected a earnings second was net margin million a interest non-cash with $XXX XX% over compared and

business equity the to due lines. our equity fee lower predominantly advisory sales, and the in and loss headwind, Beyond investment decline debt the revenue was in margin leasing

were share in Our losses, over per contributions reduction the business made offset EPS. interest losses equity to $X.XX drive to and diluted higher business expense ongoing line. transactional Adjusted actions cost the EPS investments reflected $X.XX XX months adjusted The equity headwind from mostly future past of growth. lower the quarter's our the

and year quarter. types, grew Beginning mainly Leasing fee exchange detailed Both saw fee the to material average segment industrial activity, sectors particularly growth in Americas across XX% modestly contraction rate in leasing declined the office in U.S. office sector. a industrial across performance with operating Advisory, a declined XX% Moving and asset in the volumes retail while was a especially fee industrial prior in of by most revenue while deal also and decreased sectors the EMEA. revenue in and segment. Transaction to asset Markets notably the decline review due XX% most in revenue types, comparison. size the our following decline,

according with years. office global is declined to a which industrial revenue fee sector contraction and in given office growth we’ve quarter In significant XX% Research. leasing line JLL to second industrial a the Research. global XX%, favorably largely with our decrease market in activity over tight volume XX% activity revenue fee in seen past with decline in The consistent The the JLL was in leasing supply sector industrial contraction expectations the according compares several sector,

leasing we more our of see Christian majority assets, for to sustained represents As business. demand the continue high-quality described, which

global us hold in which improvement Our sequential revenues. growth gives continues continued to for optimism pipeline leasing up,

economic uncertain backdrop. pace However, the the of considering acceleration is

and in portfolio previously other Also, The the from fees quarter to Markets incremental of revenues expansions primarily interest margin contraction last to of in of contracts grew EBITDA revenue. within and part exit the fee Advisory business in leasing the The attributable the fee was Markets in Advisory, revenue property revenue the U.K. in with due associated management consulting advisory, primarily Americas fee due was quarter decline that fourth X%, we to second lower year. a adjusted absence announced rate-sensitive

our a segment growth revenue. and strong in The Christian decline and Markets market second XXXX The is quarter fee described of Capital XX%. to segment. a were condition key off rate as XX% contraction Shifting factor

which Our asset a was and for global global with as accounted sales revenue, in geographies fee approximately revenue, most fell segment XX% volume referenced. compares fee and The decline decline sales the investment favorably Christian across classes XX% XX%. of

market For XXXX. just volume was above quarter the the second X% perspective, quarter first

EMEA Growth a offset reduction the Americas in total fee in advisory Pacific revenue fee than Asia in X% advisory valuation leading was declines by and to more valuation revenue. the in

prepayment portfolio. of $X fees, refinancing driven the generates revenue growth Fannie fee underlying approximately rise loan has fees. in slowed which X% masked was servicing growth fees on of lower growth of The Mae Our servicing fees. recurring which servicing our rates prepayment in activity, interest X% The million about early fell by

line adjusted adverse in the offset partially was reserve, expect change by by lower the earnings, impact which not Capital contraction margin and equity decremental compensation loan geographic $X reserve and Markets a million the loss margin in to in within markets $X EBITDA our structures, of predominantly do expectations, credit loss revenue loan items. fee The The was with million driven our considering we discrete recur. capital impact other differences of

talent markets on capital in position and platform investments a volume. past over capitalize Our transaction rebound in to several the us years

equity capital and last percentage year. a trends mid-two building compared typical rate Looking with debt investment ahead, is a and advisory and the pipeline in markets time down is historical global sales than at year slower this

we influenced timing While of be impacting by U.S., year activity, amount the Christian that field remainder heavily early growth the improving the see do revenue closing of factors of and described. particularly signs the through rates the pace and within will

lower project East Fee revenue. in France, X% management in Work of management, in X% Dynamics. result growth services to project revenue of and portfolio was growth Middle fee other next Australia, the by fee is a the The strength and by led partially increase demand revenue offset U.K. Moving notable continued

XX% the impact EBITDA higher-margin adversely revenues. in quarter. to The Work revenue in on margin. of in workplace in portfolio back continued in support mostly services new drove to The Dynamics the future portfolio Americas, was The growth, due services investments growth fee slowdown and leasing moderate decline of the adjusted revenue headcount activity, year continued management contract growth in X% earlier to the a technology timing and growth particularly in contraction

of and over and coming performance are underlying margin the Dynamics confident with in trajectory our pleased Work growth the segment's business are We years. the

workplace trends the ramp We secured momentum continue progresses new Fortune management solid the will companies XXX as renewal solid to we into contract begin Revenue and this see from new year contracts and earlier strong and year expansion sales to support XXXX. rates. from

remain Our as the further management corporate globally increases. demand real focused professional backdrop. solid moderating We amidst for mandates project despite demand pipeline build to trends the the continues of adding on estate economic management

our increase existing Turning Technologies. solutions leading of our to continue grew the utilization enterprise revenue platform, to clients XX% including JLL and Fee as offerings. large services

JLL We carried strong focus on profitability, consistent the Technologies growth. our JLL excluding Technologies strong operating earlier of also year retention interest, revenue despite the of saw segment Indicative were with expenses, recurring revenue rates fee-based largely base.

efficiency totaled fee earnings, The combination quarter, losses operating reversed equity of equity $XXX our JLL which that related gains to the carried over revenue This the growth recognized in half several gains approximately equity years. net had $XXX we noncash of incremental investment portfolio Technologies of the past by adjusted margin the improvement swing interest. in masked adverse was drove and an EBITDA million million,

half been approximately now lower mentioned, Year-to-date, investments XXXX the proptech Christian scaling XXXX. is well have As first back our in our months. companies of and investments the portfolio over are last mature, we than XX XX%

continue will meet proptech in strategic priorities. that to We invest companies our

Advisory United behalf of XX% growth. revenue recent declined leading the clients, reduction States, the consistent declines assets on year management managed assets deployment X%, offset in Net under on earlier. and by primarily earned fees management. was Incentive LaSalle. impact Japan revenue of valuations, our drove that notably assets fee fee to in was capital under of on largely with valuation to the Now the

a capital due compared The from to partially EBITDA environment, the transaction earnings by incentive to by drove deployment equity in the prior year. in be $XX change equity market the evolving the asset subdued, new to there fees. Given reduction adjusted in Moderating largely adverse year. prior revenues million LaSalle's change margin higher was earnings offset continues impacting valuations

earnings we approximately improving million, decline higher priority, on a more than million a conversion the efficiency. than quarter cash inflow performance. in capital free improvement offset Incremental receivables was to from trade was $XXX and Net flow in capital, nearly Markets our lower focused from reimbursables cash due Markets year largely from net and Capital earlier. to drove $XX and Shifting working Advisory is earnings. in cash The cash an the inflow flow. net Cash lower remain business working high which

sheet Turning capital balance our to allocation. and

to carried As of reported XX net net net a ratio. the from interest trailing on months year had leverage our free flow losses. and XX, losses X.Xx second adverse quarter leverage impact cash of lower equity noncash adverse trailing due over the months The of impact primarily June equity X.Xx, was up over a the X.Xx XX earlier, reported the

credit second billion $X.X billion end liquidity of at remains facility solid, position $X.X capacity. Our totaling the the including quarter of undrawn

million our capital Regarding and term, dilution balance offset capital allocation and priorities, repurchased repurchasing shares to shares. while this second are the quarter we prioritizing selectively sheet in to stock continuing near enough deleveraging our are the deploy on $XX repurchase to initiatives towards during comp year. growth We pace

share likely repurchases as long elevated, leverage are be As remains modest. to

as remained our amount share cash the authorization outlook. on of out, repurchase performance particularly XX, the of June and generation business repurchases further be of $X.X will macroeconomic Approximately billion Looking dependent our the XXXX. share on

goals. operating on improvement efficiency Before update closing, long-term provide an like to I'd our

of approximately end million, an to million, in million bringing we $XXX expected the cost to $XX which additional realized total the by July, is fixed $XXX amount of As of XXXX. be reduced annualized

roles The non-revenue structural focused actions identified year. cost global lines our part we in largely are of on that of and nature the business as realignment generating last

we return invest across have believe Importantly, and business. that prospects our in opportunistically continue attractive areas we to growth

of XX% EBITDA recovery Regarding to the a of a articulated second consolidated equity our the assumed earnings minimal and XXXX year. a target which We previously adjusted margin half outlook. financial XX%, in

experienced our on core range. remain which be below stated focused previously year-to-date, target, running our margin While equity business we had would within our losses we margin

in tailwinds industry gaining secular which With our at our intact capital more XXXX and the lower to platform, the business modest confident range. our in leasing and growing we in very at investments a and EBITDA we GDP. a exclude XX% prospects adjusted people our exceeds meaningfully much and share global the be ramp you to margin activity, slightly of our and end equity markets are XX% in losses factor of expect If rate

you. Christian, back to

you, Thank Karen.

the conditions the downward bids of inflation this continue than now top is interest uncertainty. as and in create rate wider on Market ahead, peaked earlier volatility spreads cycle. normal U.S. a interest the trajectory nearing Looking and rates year mixed remain with swift to

the sales for optimism. look as we are However, at reasons believe we landscape, investment there

of developed future reserve. have more from markets moves the certainty First, expected federal the U.S.

started credit to and to helping begun have tighten, to spreads Second, more debt make narrow. predictable bit has costs a

lenders Third, fundraising highest year in last the and assets. the in appropriately are the priced second for quarter was at level active

clients with supported fact, activity lows a Weighing a aspects, year. uptick desire but to bidding sequential still a these since powder. this earlier different transact. lack we uptick towards this seen there conversation There our dry addition, is in the activity In notable is has indicate no by fall. This the been in of transaction lean

to to business, cost brokerage transpires. been great over we we made out months, business doing the Downturns and diversify over stable to perform invest allow take lines to ago past current a we take our years present have the will our platform. base will have and are recovery an downturn. several made as select to business investments several during a adding it The our teams opportunities markets often last more us The the years lead recurring further this well that dividends, of the to advantage business the paying have in changes continue resilient and to earnings provide structural continue to in couple of position more even us when

more global JLL manage than by on market and the are they as Now, approach scale clear guidance insightful through One and relying ever, our our environment. clients current

work each their serving thank to commitment of close, to hard our employees clients. I would our like Before and I for

the comes from [Operator Instructions] with of Sheldon line question William Stephen Blair. Your first

the on here, one just First JLLT.

doing on more you assets your equity some assets that two give the well to can to there. assets that detail the within especially you write-down. some own some generally, I curious if how are -- are right? We the out, guess, are performing And detail, expectations? more especially particularly that And hood just those give love there just of their those drove some relative that of Just under

Sure.

capital companies completely. of investments. in have companies. our own relatively we We part of predominant two proportion those don't two of all, The the always of losses, small anything our First which those created venture a largest portfolio,

bad actually very environment, the cash was doing muted out luck very, just has which in they running but had them of of One valuations. fine were an that

participated And so we in that round.

raised going successfully well we they expect And to equity, perform and them forward.

The environment. other one choose take this to

Although no is but need saw equity liquidity for was was exposure doing opportunity there use big they to although the very liquidity, to now need potential. We company to company that for our to but accelerate their and participate. growth a to that enough was participate, not and well, choose us no raise attractive there

that with are happy very strong -- And portfolio. are in the It the our the well has well used past. is performance products very been we Overall, they creating within are clients. used major

have years. we what now we the up valuation have recognized in previous is over appreciation the partly So, the given

so capital, uptick see that in we when strong years. multiple over And venture as a a invest into very situation we was there valuations normal

now by equity last in companies to raise down. valuations equity to have quarters And or choose over these have of hit seen that now environment. raise And in we that had couple the who we environment that were come

generally rest the And capital as the just then what That's outlook you're helpful. of follow-up, over given the year seeing. markets it. activity a on Got for

But you activity I in commentary, XX% that, say range. end isn't this Christian low that out fall. to included that up it pick the the XX% that also for necessarily laid to of capital the to said, likely think think markets you you Karen fair guidance is seems

kind those drill guess, to wanted I Just two down, on of comments.

stay we environment. of want prediction overall on on capital the first all, away giving Well, a to markets

provides year. we the the want seen lately, uptick in guidance, strictly the in of very included the about on what of on of working clients judge us that with with the months notable forecast margin focusing we amount we achieve, uptick do have we earnings. still what is because best. And year, we that that the regards the assignments that us to own see are portfolio which towards our the this is are We they our our are we what should And and expecting are a excluding of markets activity to that conversion we ratio, see the what confidence telling this lower year, end that equity to last talk capital end when couple of can

Anthony question next from JPMorgan. of with comes line Our the Paolone

Just on Steve's question. last following up

on quarter some does of that does that your little Just end modest that? a just overall lower for up see broad fourth brackets that I lot, half like you to ramp be put revenue margin trying to -- the lens for need the just second mean around, mean guidance. just bit, the a to any on Like JLL needs fee

the a not or predictions, than Well, against year. revenue development but our are It performance whatever. on in but a we that's up last year in very side up bit a last relative better discretion quarter, little here, expecting own a will be fourth the massive

just Okay. be the needs share goals versus that? getting you're How terms sticking to what And in then to you characterize here. like 'XX market just the by achieve to would overall there that just of

financial investments implied with we reduce grow margin streamline time, that we predicted strategic confident XXXX. on us have share XXXX margins position that were our what then at same expansion And and targets have our Well, organizational our changes the our and that platform we to predominantly we cost us which medium-term allow made market base. expand margin expansion. can line mean, I And our the made, based achieve around to in we

are first in But and achieve targets. have the is are confident into which we the we coming cost on those investments would savings that we to to and seeing targets XXXX were months, these XX the get this efficiencies taken. can become we exactly development of two over next market pretty market year, those the based stay it it tough Our really then quarters to as margin

boost that's half, quarter-to-quarter free just flow in you of reimbursements? -- then It just you receivables volatility one, unwind Do help receivables can, Karen. full Okay. that working just some if like something Or just I reimbursements. maybe going last just and had is seemed capital the benefits something for from year? the And and the think those cash second this to for that's could

Yes. Maybe outcomes and a step working I earnings. capital first in offset take highlight just back that the decline actually those

So, what and transaction very as we year is think happens flow on perspective full overall. of the cash dependent free an about earnings from outcomes certainly recovery and the pickup expected volumes

that, drag of tailwind we payments, of puts prior payments working as tailwind capital wins, and there outcome, incentive lower a bit from a full from of right, in tax are year the the the new impact that year. a about and having contract collections, takes Outside to upfront number will compensation final compared talked past,

drive working So the capital moving outcomes continuing focused and -- earnings, and on largest of there. then will to right are pieces, number we of be impact of highly which strong the

of Our comes next Michael with Griffin Citi. the line question from

transaction want go prices in to had Christian. you to up a spreads need spreads on those this do kind and activity? briefly, of or sense about pick that comment of on credit asset where of much you touched to being adjust, Just prices asset need kind of how the narrowing narrow to release I back adjust you know more kind to but to the have

and for prices asset have already, narrowing seen we down. see many come we actually spreads Well, to are

to starting we is activity speak. as grow so And

room get more ongoing massive there's that go expecting months. that of in we in taking order changes what it's already to some classes, in the today which rate needs But it other We in that line that believe of to trend So, the to very not any in uptick some lead more adjustment, close are are couple current in is classes, transactions. expecting not uptick. of And that kind where price asset that place to seeing we environment. interest trend to in for will last a massive asset for line, kind are we we really to still it unlock an difference are as

then it performance Are any kind APAC, there? should be read And EMEA, Great. regions. in I just of markets difference we Americas, transaction on and seeing anything you into mean, activity, maybe from

Yes.

Europe. across go that we It's will quickest side. than drag talk And see along expect until can that North about hard a all market significant not several the to about will regards the fundamentally Europe, Asia that differential more come region, uptick. environment from is earlier With always sale Pacific, over the same the You to other. American U.K. and activity different out transactional on quarters countries because we The the to the Pacific each continent. Asia is there very situation talk but that will

versus different markets. Japan So, than China versus we situation and have we in a completely have Australia in other

is life anyway. months. couple see us, relevant the But most U.S. the you down not be much in most market two regions, kind And where and Overall, the for the there far the that the over next environment, if is better than coming uptick obviously to the it now go the U.S. is we could of bring it all back therefore, didn’t expected together, environment that there market because slightly market is other of

comes next with Instructions] [Operator Our question KBW. Rahmani from Jade

trying a have Technologies followon these very you I taken lot a mean, did technology. wondering approach portfolio, wherever to two undergoing not On entire technologies. also optimistic now if on have you're value to those plans. prove really prove the adoption the have you market And current really of side, rethink holistic space had is entire I broker just the metal, think businesses the a fundraising? the across JLL JLL as companies this their this environment, proptech the And comment to they or the that could in rates of at

business if they to gaining I there's traction? are think Are drop this be in Is segment. going investors to catching more shoes the on? wondering

Sure.

returns once again, we three growth improve that enable financial invest productivity. of that It's will first in the with off reasons with drive repeating the technology me Let and start to companies. proptech business beyond tools all, our

disrupt potentially be third, best-in-class technology insights clients solutions. our industry into could revisiting And have always provide three to that developing reasons is our proven strategy. very to And Secondly, valid. for important those gain to with and therefore, and technology very

and across product it is our we And start adoption which information broker of those to within about last you it quarter aspects, already is one markets that that using capital an AI-powered pipeline tool, that capital last opportunities. is being platform And of venture analyze to business we that mentioned XX% just funds. of are pipeline provided with all investment mentioned, was provide and our our early community This we leads sourced source we identify, originally into which our using. from a are quarter, company this the approximately

merged We company, bought And has then much own multiple are used to technology of have our our by later and that that but led product. also clients. used the our within it products platforms, teams, with examples very on which complete we

to investor. so like reinforce, are a we And capital I'd just venture not normal

invest for in game estate for products for in experts our believe be are changer people. And our companies clients proptech real or will servicing clients of our and type a that only those brokers on our into We we and we -- that. where that,

an understanding And here. so of that the closeness underlying this incredible there's is situation --

those proof last we our just do buying we us are doesn't not portfolio. as very have the overall, right witnessed are confident we from points -- protect not into investments. we something just very early That just are we down that But We about over have quarter. before

are two for in somewhat of opaque. And areas company, that the modeling estimates main there's terms

first is JLL equity the within The Technologies. income

generates a to approach next of of quarter, of on you last and I around I've return XXXX taken, $XXX $XX year, X% value invested income. carrying had million XX% which the for and as of million around million capital $XX So, just assume that

one. number approach that's So

to about that and reduce this a on side any LaSalle definition quarter. back historically, should I recovery we would then incentive $XXX provide about more other think and of think how average be so a recovery. about just Technologies JLL incentive an look charge there modeling And million the could you fees? uncertainty would then But we shape on the those guess, is the need fees. by equity income the thinking we around take And

fully to I'm it mean, for I am on model mean, aware, that, you I easy JLLT, fully we I situation. are the aware that Sure. again, doesn't -- make

we very we very reducing new it, as in allocation and as see it don't have Arena, for now to that, not proptech are comfort now are and we to now, it, the starting believe mature take we because five capital Karen we years, to, but in doing believe said, existing I are much we we also and portfolio to should You a alluded investments. our recycle opportunities

to is some seen in to not And those has that to equity we be we in one. for downside. as two by now capital. That's can't new four every the quarters point funded upside number volatility last there new the the have years therefore, earnings the investment But prevent last and

leave LaSalle side, the I to On that question Karen.

Sure.

a recognized are the So, us as recap the $XX we half to think what we we for some of fees, you having just year-to-date, where fee on year, incentive have they'll year. earned do expect be about the majority we expect XXXX LaSalle minimal, but million. significant And of should second further and

Looking of these of as the lumpy, environment certain measurements those are, timing as see, funds, kind you vintage funds. accounts on within they forward, of vary relatively do and separate and based well market and valuation as the right, commingled

to the as Over lower as to $XXX what's will of million closer be range volume on has at expecting right, we're return to the happening, and to the wait this as again, get the happen several year. based some the been as low last $XX we over at transaction range years, And end much million, year. of as this end see we XXXX in we'll what momentum believe to

capital some fair measure management total it check fees funds kind has and of under ratio? as of to Just company to incentive to the the co-investment a assume is are conversion those make or relative forecasts sure amount those reasonable. And sanity

They're We tied a Yes. co-invested question. necessarily have incentive great where on we That's in that do earn we've co-investment. fees don't where have to areas specifically portfolio. not we

could back. multiyear specific come more over give give more Let asking a question and little where I a to work can a bit bit around me we'll kind period you're appreciate on the do thought we shake of point, a be of bands some but how more this out. that of little

this no the Christian, time. further over will call turn I are questions There to at you. back

then like questions, the Sure. there Well, for I'd to no everybody are if in further JLL. thank interest

from all. you Thank now. you will a again quarter in We to talk

This concludes conference today's call.

disconnect. now may You