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Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.10pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.10pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.10pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
cyberattack+3
fail+2
critical+2
cyberattacks+2
challenges+1
Positive rising
efficiency+2
successful+1
profitability+1
success+1
efficiencies+1
Risk Factors (Item 1A)
9,451 words
ITEM 1A. RISK FACTORS
In addition to other information set forth in this report, you should carefully consider the following risks that, based upon current knowledge, information and assumptions, could materially adversely affect our business, financial condition and results of operations. Some of these risks and uncertainties could affect particular segments or geographies, while others could affect all of our businesses. Although each risk is discussed separately, many are interrelated.
These risk factors do not identify all risks we face; our operations could also be affected by factors not presently known to us or that we currently consider to be not significant to our operations. Our business is also subject to general risks and uncertainties which broadly affect all companies.
Categorization of Enterprise Risks. This section reflects our current views, as of the issuance of this report, concerning the most significant risks we believe our business faces, both in the short and long term. For purposes of the following analysis and discussion, we group the risks we face according to five principal categories:
• Operational Risk Factors
• Financial Risk Factors
• Strategic Risk Factors
• General Risk Factors
• Legal, Compliance and Regulatory Risk Factors
Although risks we identify may fit the criteria of more than one category, we chose the category we view as primary. We do not present the risks below in their order of significance, the relative likelihood we will experience a , or the magnitude of any such . Certain risks also may give rise to business for us, but our discussion of risk factors in Item 1A is limited to the effects the risks may have on our business.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
deficit+3
restructuring+2
absence+2
unfavorably+2
adverse+1
Positive rising
effective+6
enhanced+3
improvement+2
beautiful+1
favorably+1
MD&A (Item 7)
8,812 words
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis contains certain forward-looking statements generally identified by the words: anticipates, believes, estimates, expects, forecasts, plans, intends and other similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, achievements, plans, and objectives to be materially different from any future results, performance, achievements, plans, and objectives expressed or implied by such forward-looking statements. See the Cautionary Note Regarding Forward-Looking Statements after Part IV, Item 15. Exhibits and Financial Statement Schedules.
We present our Management's Discussion and Analysis in the following sections:
(1) A summary of our critical accounting policies and estimates;
(2) Certain items affecting the comparability of results;
(3) Certain market and other risks we face;
(4) The results of our operations, first on a consolidated basis and then for each of our business segments; and
(5) Liquidity and capital resources.
In this Item, we discuss results for the years ended December 31, 2025 and 2024 and the comparison between these years. Discussions of results for the year ended December 31, 2023 and comparisons between 2024 and 2023 results can be found in Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2024 .
Operational risk relates to risks arising from systems, processes, people and external events that affect the operation of our businesses. It includes information management and data protection and security, including cybersecurity; supply chain and business disruption; health and safety; and other risks, including human resources and reputation.
INSUFFICIENT ORGANIZATIONAL AGILITY ACROSS OUR STRATEGY, STRUCTURE, PROCESSES, PEOPLE AND TECHNOLOGY MAY IMPACT OUR COMPANY’S SUCCESS.
Our business is evolving at a rapid pace. Our organizational agility underpins our ability to mitigate many other risks, minimize impacts from adverse events, and capitalize upon opportunities when presented. The sheer size and footprint of our company - with over 113,000 employees across more than 80 countries - makes change-management and responsiveness challenging. Any global change is a complex undertaking. Insufficientproactive and reactive organizational agility and responsiveness to industry trends and other external factors may negatively impact our results, reputation, and the differentiated services we provide as compared to our competitors.
WE MAY FACE CHALLENGES IN RETAINING OUR SENIOR MANAGEMENT, MAINTAINING OUR WORKFORCE CULTURE, AND ATTRACTING AND DEVELOPING QUALIFIED EMPLOYEES.
Our success largely depends on the expertise of our senior management team and key personnel who possess extensive knowledge of our business and strategy, as well as colleagues critical to developing and retaining client relationships. The competitive nature of our industry presents ongoing challenges for retaining and attracting skilled personnel with relevant industry experience and knowledge.
Regional and national labor policies, which can be difficult to predict, may indirectly impact our ability to retain and attract key personnel.
Our ability to achieve our strategic vision, maintain business continuity, and ensure high-quality client service depends on successfully identifying, attracting, developing, and retaining talent in key positions, as well as maintaining a strong pipeline of successors for important management roles. Failure to do so could disrupt our business, impact revenues, increase costs, and affect staff morale.
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As technology and market demands shift, we recognize the need to continuously upskill and reskill our workforce to maintain our competitiveness and efficiency. Failing to address this need promptly could affect our ability to adapt to changing market conditions.
OUR RELIANCE ON THIRD PARTIES COULD EXPOSE US TO INCREASED ECONOMIC AND REPUTATIONAL HARM.
We rely on third parties, and in some cases subcontractors, to perform activities on behalf of our organization to improve quality, increase efficiencies, reduce costs and lower operational risks across our business and support functions. We continue to use a Vendor Code of Conduct, which is published in multiple languages on our website, to communicate to our vendors the standards of conduct we expect them to uphold. Our contracts with vendors also generally impose a contractual obligation to comply with our Vendor Code. In addition, we leverage technology at an increasing rate to help us better screen vendors, with the aim of gaining a deeper understanding of the risks posed to our business by potential and existing vendors. If our third parties do not have the proper safeguards and controls in place, or if appropriate oversight cannot be provided, or if they fail to comply with service level agreements or regulatory or legal requirements in a high-quality and timely manner, we could be exposed to increased operational, regulatory, financial or reputational risks. Our reliance on third parties is increasing, particularly for critical technology and data services. This creates heightened exposure to supplier-related risks, including operational disruption from system outages, cybersecurity breaches originating from vendor systems, and vendor lock-in that may lead to aggressive pricing or costly migrations. Failures by either our technology or non-technology service delivery suppliers could cause damage to our reputation and harm to our business.
OUR HEALTH, SAFETY, SECURITY AND ENVIRONMENT PROGRAM, POLICIES, AND PROCEDURES (INCLUDING THOSE OF OUR CONTRACTORS AND SUBCONTRACTORS) MAY NOT BE ADEQUATE.
Health, safety and security is a prominent part of our purpose and values, which is why we have taken steps to implement what we believe are strong operational health and safety controls. Our goal is to ensure those with whom we work and interact are unharmed by our operations. We have a multi-disciplinary safety management structure, with executive sponsorship, aimed at managing existing and emerging health and safety risks, and achieving continuous improvement.
However, despite significant investments in our safety platform, management systems and vendor due diligence program, if our health and safety policies, procedures, and programs are not adequate, or if our employees or contractors do not receive or complete adequate training or comply with our policies and procedures, we may be, and have previously been, exposed to significant consequences including seriousinjury or loss of life, which could have a material impact on our financial performance and reputation. Despite our efforts, we recently experienced an increase in the number of serious safety incidents, including fatalities of both employees and contractors. As a result, we have identified and implemented additional safety measures for our employees and subcontractors including electrical safety and work at heights training, and enhanced controls for approving work. Our contractors and their subcontractors are highly integrated into many aspects of our operations and therefore are involved in a significant proportion of the safety incidents we experience. Additional efforts are necessary to ensure our vendors are aware of our high health and safety expectations and consistently comply with our policies and procedures.
WE FACE BUSINESS DISRUPTION AND RELATED RISKS RESULTING FROM HEALTH EPIDEMICS.
Health epidemics that affect the general conduct of business in one or more urban areas (including as the result of travel restrictions and the inability to conduct face-to-face meetings) have occurred in the past, for example from influenza or COVID-19, and may occur in the future from other types of outbreaks. Such instances can adversely affect the volume of business transactions, real estate markets and the cost of operating real estate or providing real estate services.
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DISRUPTIONS IN COMPUTER SYSTEMS, PRIVACY BREACHES OR CYBERSECURITY ISSUES, OR FAILURES TO EXECUTE OUR ENTERPRISE-WIDE DATA STRATEGY, COULD IMPACT OUR ABILITY TO SERVICE OUR CUSTOMERS AND ADVERSELY AFFECT OUR BUSINESS, DAMAGE OUR REPUTATION AND EXPOSE US TO FINANCIAL RISK.
Our business is highly dependent on our ability to collect, use, store and manage organizational and client data. If any of our significant information and data management systems do not operate properly or are disabled, we could suffer a disruption of our businesses, liability to clients, loss of client or other sensitive data, loss of employee data, regulatory intervention, breach of confidentiality or other contract provisions, or reputational damage. These systems may fail to operate properly or become disabled as a result of events wholly or partially beyond our control, including disruptions of electrical or communications services, as well as disruptions caused by natural disasters, political instability, terrorist attacks, sabotage, computer viruses, deliberate attempts to disrupt our computer systems through "hacking," "phishing," or other forms of both deliberate or unintentionalcyberattack, or our inability to occupy one or more of our office locations. As we outsource significant portions of our information technology functions, such as cloud computing, to third-party providers, we bear the risk of having less direct control over the manner and quality of performance.
Our enterprise data governance is responsible for identifying, defining and providing direction and oversight of significant data-related business needs. Failure to effectively execute our enterprise-wide data strategy may lead to a loss of sensitive or critical data, costly remediation of data-related issues and possible regulatory or contractual penalties.
Cyber threats are proliferating and advancing the ability to identify and exploitvulnerabilities, requiring continuous evaluation and improvements to our security architecture and cyber defenses. The risk of cyber threats also extends to suppliers and vendors we engage on a principal basis to perform various services. We also face increased cybersecurity risk as we deploy additional mobile and cloud technologies. We service clients across multiple industry verticals - many of which are higher-profile cyber targets themselves - including financial services, technology, government institutions, healthcare and life sciences, and because of this the risk that we are subject to cyberattackincidents may increase. In addition, the rapid evolution and increased adoption of artificial intelligence technologies amplify these risks. We are continuously hardening our infrastructure built on these technologies, monitoring for threats, and evaluating our capability to respond to any incidents to minimize any impact to our systems, data, or business operations. However, we cannot ensure that these measures will be successful in preventing any cyberattacks.
We have experienced various types of cyberattackincidents which, to date, have been contained and not material to us. As the result of such incidents, we continue to implement new controls, governance, technical protections and other procedures. We maintain a cyber risk insurance policy, but the costs related to cybersecurity threats or disruptions may not be fully insured. We may incur substantial costs and suffer other negative consequences such as liability for damages, reputational harm and significant remediation costs and experience material harm to our business and financial results if we, or vendors or suppliers we engage on behalf of our clients, fall victim to other successfulcyberattacks.
In addition, we collect personal information and other data as part of our business processes and activities. This data is subject to a variety of U.S. and foreign laws and regulations, including oversight by various regulatory or other governmental bodies. The European Union ("EU") General Data Protection Regulation, for example, imposes stringent data protection requirements and provides significant penalties for noncompliance. Any inability, or perceived inability, to adequately address data privacy and data protection concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly-acquired companies) could result in additional cost and liability to us or company officials, damage our reputation, inhibit sales, and otherwise adversely affect our business.
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RISKS RELATING TO SERVING LARGE CLIENTS AND THE TERMS OF OUR CLIENT CONTRACTS.
We provide services to many of the world's largest and most sophisticated corporate and investor clients. Our business could be adversely affected by the loss of a major client or the disruption of key client relationships.
Deepening relationships with our large enterprise clients may intensify client concentration risk, where a service delivery failure or relationship issue in one service line could jeopardize our entire relationship with that client across other or even all business lines. We are dependent on long-term client relationships and revenue received for services under various service agreements. In this competitive market, if we are unable to maintain these relationships or are otherwise unable to retain existing clients and develop new clients, our business, results of operations and/or financial condition may be materially adversely affected.
In addition, the competitive environment for servicing large clients may require us to agree to contractual terms that increase our potential risk and liability. To secure and retain business, we may need to compromise on terms related to liability limitations, indemnification obligations, credit terms, and the allocation of risk. Where competitive pressures result in higher levels of potential liability under our contracts, the financial impact of operational errors or other matters for which we have indemnified our clients could be significant and may not be fully covered by our insurance.
WE ARE EXPOSED TO LEGAL AND REPUTATIONAL RISKS ARISING FROM BREACH OF FIDUCIARY OBLIGATIONS CLAIMS PURSUANT TO CLIENT CONTRACTS.
In certain cases, we are subject to fiduciary obligations to our clients, which may result in a higher level of legal obligation compared to basic contractual obligations. These relate to, among other matters, the decisions we make on behalf of a client with respect to managing assets on its behalf, purchasing products or services from third parties or other divisions within our Company, or handling substantial amounts of client funds in connection with managing their properties or complicated and high-profile transactions. We face legal and reputational risks in the event we do not perform, or are perceived to have not performed, under those contracts or in accordance with those obligations, or in the event we are negligent in the handling of client funds or in the way in which we have delivered our professional services. The increased potential for the fraudulentdiversion of funds from a "hacking" or "phishing" attack exacerbates these risks.
The precautions we take to prevent these types of occurrences, which represent a significant commitment of corporate resources, may nevertheless be ineffective in certain cases.
WE ARE SUBJECT TO ACTUAL OR PERCEIVED CORPORATE CONFLICTS OF INTEREST CLAIMS.
Corporate conflicts of interest arise in the context of the services we provide as a company to our different clients. Personal conflicts of interest on the part of our employees are separately considered as issues within the context of our Code of Ethics. Our failure or inability to identify, disclose and resolve potential conflicts of interest in a significant situation could have a material adverse effect. In addition, it is possible that in some jurisdictions, regulations could be changed to limit our ability to act for certain parties where potential conflicts may exist even with informed consent, which could limit our market share in those markets. There can be no assurance potential conflicts of interest will not adversely affect us.
After reductions in the market values of the underlying properties, firms engaged in the business of providing valuations are inherently subject to a higher risk of claims with respect to conflicts of interest based on the circumstances of valuations they previously issued. Regardless of the ultimate merits of these claims, the allegations themselves can cause reputational damage and can be expensive to defend in terms of counsel fees and otherwise.
EVOLVING WORKPLACE STRATEGIES AND REAL ESTATE TRENDS, INCLUDING VARYING OFFICE REAL ESTATE OCCUPANCY RATES IN SOME GEOGRAPHIC MARKETS, MAY AFFECT DEMAND FOR OUR SERVICES AND CLIENT PORTFOLIOS.
The ongoing evolution of corporate workplace strategies continues to alter how companies use real estate, impacting demand across asset types, particularly the office sector. As organizations seek to optimize their portfolios for cost, efficiency, and employee experience, they are re-evaluating their real estate needs. This dynamic has created opportunities for our advisory services in areas like workplace strategy and design, but it also presents potential risks to our business.
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A sustained “flight-to-quality,” where clients prioritize modern, well-amenitized buildings, could lead to bifurcated market performance. This may result in reduced transaction volumes and downward pressure on asset values for older or less competitive properties, which could, in turn, affect our brokerage revenues. However, while lower quality assets struggle, the high-quality segment of the market is filling up rapidly, and limited financing availability for new office construction constrains the addition of new high-end supply. This supply shortage in premium office space could limit overall market activity and present challenges for parts of our business. A shift in the mix of services demanded by clients, such as changes to the size and nature of their managed facilities, could also affect long-term annuity revenues from our Real Estate Management Services business.
For our Investment Management business, these evolving real estate dynamics may influence the performance and valuation of office-focused investment portfolios and affect investor sentiment and capital allocation decisions.
Our financial performance is linked to our ability to anticipate and adapt to these market shifts. Our success depends on our continued ability to advise clients effectively, evolve our service offerings, and help investors navigate the changing risk and opportunity profile of commercial real estate.
WITH RESPECT TO LOANS WE ORIGINATE AND SERVICE, WE FACE THE RISK OF POTENTIAL BREACHES OF REPRESENTATIONS AND WARRANTIES, WHICH MAY HAVE A MATERIAL IMPACT ON OUR BUSINESS.
Our loan origination and servicing activities include participating in the Fannie Mae DUS and Freddie Mac Optigo loan programs, among others, which require us to provide representations and warranties regarding the loans we originate. These representations and warranties relate to various aspects such as the accuracy of information provided, compliance with underwriting and eligibility requirements, and adherence to program guidelines. There is a risk that representations and warranties in connection with these programs may be breached, either inadvertently or due to unforeseen circumstances. Underlying reasons for such breaches may include inaccurate, incomplete or fraudulent information provided by borrowers or third parties, errors in documentation, changes in program guidelines, or changes in the regulatory environment. If a breach of representations and warranties occurs in loans originated or serviced by us, we may be exposed to various risks, including: contractual obligations to repurchase loans (inclusive of the outstanding principal amount of the loan, accrued interest, and associated expenses) resulting in financial losses; obligations to indemnify for losses or, for loans originated under the DUS program, increase the loss-sharing; legal actions or regulatory or other penalties imposed by Fannie Mae, Freddie Mac, or other governing bodies that could result in reputational damage, financial penalties, increased compliance requirements, or restrictions on our ability to participate in future loan programs; and other outcomes that could result in financial losses or impairment of assets, impacting our financial performance, profitability, and cash flows. Given the inherent risks associated with loan origination and servicing activities, particularly in highly-regulated programs such as Fannie Mae DUS and Freddie Mac Optigo, we maintain underwriting and due diligence processes, compliance procedures, and risk mitigation measures to minimize the likelihood of breaches, though such measures may not always be fully effective in mitigating all risks, especially in the case of breaches tied to the actions of borrowers or third parties, from whom recovery may be limited.
Strategic Risk Factors
Strategic risk relates to JLL’s future business plans and strategies, including the risks associated with: the global macro-environment in which we operate; mergers and acquisitions and restructuring activities; intellectual property; and other risks, including the demand for our services, competitive threats, technology and innovation, and public policy.
WE MAY FACE CHALLENGES IN ADAPTING TO AND LEVERAGING RAPIDLY EVOLVING TECHNOLOGIES, INCLUDING ARTIFICIAL INTELLIGENCE, WHICH COULD IMPACT OUR COMPETITIVE POSITION AND FINANCIAL PERFORMANCE.
The real estate industry continues to be transformed by artificial intelligence (“AI”), including generative AI, advanced analytics, and other emerging technologies. As JLL and the sector increasingly embrace data-driven decision-making, our ability to effectively manage and utilize data and AI tools is crucial for maintaining our competitive edge. Failure to adapt to these technologies or leverage them effectively could result in loss of market share and revenues, particularly if we are unable to meet evolving client needs or align our offerings with industry standards and client expectations.
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Our ability to execute our strategy is increasingly dependent on the successful adoption of AI. A failure to optimally deploy and integrate AI could result in the write-off of significant investments and a failure to realize expected productivity and efficiencygains, negatively impacting our profit margins and competitive position. As we replace human processes, we create critical dependencies on AI systems, which could lead to extended operational disruptions if those systems fail and manual backups are no longer viable. Furthermore, as an established incumbent, our legacy data architecture and the need to retrain a large workforce may impede our ability to adopt new technology as quickly as our competitors or new market entrants.
Our increasing reliance on AI technology introduces risks relating to our dependency on the accuracy and reliability of AI-generated outputs, the potential for data privacy and security breaches, and challenges in complying with rapidly-evolving AI regulations across multiple jurisdictions. Specifically, the rapid adoption of AI tools exposes us to risks of inaccurate or misleading outputs, which could lead to flawed business analysis or client advice. Furthermore, the use of generative AI may create uncertainty around intellectual property ownership of both inputs and outputs, and could increase the risk of inadvertent disclosure of confidential client or company information. In addition, as we deploy AI to create efficiencies, we face risks relating to our pricing models. A failure to adopt our pricing strategies, particularly in cost-plus arrangements, to reflect AI-enabled cost reductions could result in margin erosion or damage client relationships if our pricing is not perceived as transparent and fair.
While we have implemented policies and safeguards governing the use of AI technology and protection of our intellectual property and sensitive information, we cannot guarantee complete adherence by our employees, contractors, or other agents. The misuse or improper implementation of AI could lead to erroneous decisions, biased outcomes, regulatory fines, or reputational damage.
The legal and regulatory landscape surrounding AI also is rapidly evolving and fragmented. Jurisdictions are beginning to implement distinct regulatory frameworks, such as the European Union’s AI Act, which could impose varying and potentially conflicting compliance obligations on our global operations. Navigating these changes may require significant resources to ensure compliance with both U.S. and non-U.S. laws, potentially impacting our operations and financial performance.
As AI capabilities continue to advance, we may face challenges in maintaining the relevance and competitiveness of our traditional service offerings, balancing AI-driven efficiencies with the need for human expertise in complex real estate decisions, managing client and public perceptions regarding our use of AI in service delivery, and attracting and retaining talent with the necessary skills to develop and manage AI systems.
Failure to address these challenges and risks adequately may negatively impact our operations, reputation, and financial performance. Additionally, as AI technology continues to evolve rapidly, other unforeseen risks may emerge that could adversely affect our business, financial condition, and results of operations.
IF WE FAIL TO PROTECT OUR INTELLECTUAL PROPERTY ADEQUATELY OR INFRINGE UPON THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS, OUR BUSINESS COULD BE MATERIALLY IMPACTED.
Our business depends, in part, on our ability to identify and protect proprietary information and other intellectual property such as our service marks, domain names, client lists and information, business methods and technology innovations, and platforms we may create or acquire. Existing laws of some countries in which we provide or intend to provide services, or the extent to which their laws are actually enforced, may offer only limited protections of our intellectual property rights. We rely on a combination of trade secrets, confidentiality policies, non-disclosure and other contractual arrangements, and on patent, copyright and trademark laws to protect our intellectual property rights. In particular, we hold various trademarks and trade names, including our principal trade names, "JLL" and "LaSalle." If either of our registered trade names were to expire or terminate, our competitive position in certain markets could be materially and adversely affected. Our inability to detect unauthorized use (for example, by current or former employees) or take appropriate or timely steps to enforce our intellectual property rights may have an adverse effect on our business.
We cannot be sure the intellectual property we may use in the course of operating our business or the services we offer to clients do not infringe on the rights of third parties. However, we do obtain representations and warranties, as well as indemnities, from the licensors in order to mitigate this risk. We may have infringementclaims asserted against us or against our clients. These claims may harm our reputation, cost us money and prevent us from offering some services.
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GEOPOLITICAL VOLATILITY AND TRADE TENSIONS, INCLUDING THE IMPOSITION OF TARIFFS, COULD ADVERSELY AFFECT OUR BUSINESS.
As a global company operating in over 80 countries, we are inherently exposed to risks arising from geopolitical volatility, conflicts, and shifting international relations. The current global landscape is marked by significant tensions, including the ongoing war in Ukraine and broader instability in the Middle East, which have disrupted energy markets, global supply chains, and international trade through events like attacks on commercial shipping. Strategic competition between major global powers has led to a more fragmented and unpredictable trade environment characterized by tariffs, investment restrictions, sanctions, and controls on technology transfers. These trade barriers can directly increase the cost and complexity of real estate projects by raising prices for essential construction materials and technology, which particularly affects our Project and Development Services and Workplace Management businesses and can lead to project delays or cancellations.
Collectively, these geopolitical conditions contribute to widespread economic uncertainty, currency volatility, and reduced investor and corporate confidence. This environment can cause clients to delay or reconsider real estate investment and leasing decisions, leading to longer sales cycles and potentially lower transaction volumes that would negatively impact our capital markets, leasing, and investment management revenues. Geopolitical developments may also restrict or limit our ability to provide services in countries where we operate today. Navigating this complex landscape of sanctions and evolving trade regulations also increases our operational costs and compliance risks and can pose direct risks to the safety of our employees in affected regions. While we actively monitor these global developments and adapt our strategies to mitigate their impact, a significant escalation of conflict or trade tensions could materially harm our operations, financial performance, and reputation.
REAL ESTATE SERVICES AND INVESTMENT MANAGEMENT MARKETS ARE HIGHLY COMPETITIVE, WHICH COULD MAKE IT DIFFICULT FOR US TO MAINTAIN OUR MARKET SHARE, GROWTH RATE AND PROFITABILITY.
We face significant competition from other real estate service providers, institutional lenders, insurance companies, investment banking firms, investment managers, accounting firms, technology firms, consulting firms, co-locating providers, temporary space providers and firms providing outsourcing of various types (including technology and building products), any of which may be a global, regional or local firm, and from firms that self-perform their real estate services with in-house capabilities.
Many of our competitors are local or regional firms, which may be substantially smaller in size than us but hold a larger share of a specific local market. Some of our competitors have expanded the services they offer in an attempt to gain additional business. Some may be providing outsourced facility management services to sell clients' products that we do not offer. In some sectors of our business, some of our competitors may have greater financial, technical and marketing resources, larger customer bases, and more established relationships with their customers and suppliers than we have. Larger or better-capitalized competitors in those sectors may be able to respond faster to the need for technological change, price their services more aggressively, compete more effectively for skilled professionals, finance acquisitions more easily, develop innovative products more effectively, and generally compete more aggressively for market share. This can also lead to increasing commoditization of the services we provide and increasing downward pressure on the fees we can charge.
New competitors, or alliances among competitors that increase their ability to service clients, could emerge and gain market share, develop a lower cost structure, adopt more aggressive pricing policies, aggressively recruit our people at above-market compensation, develop a descriptive technology that captures market share, or provide services that gaingreater market acceptance than the services we offer. Some of these may come from non-traditional sources, such as information aggregators or digital technology firms. To respond to increased competition and pricing pressure, we may have to lower our prices, loosen contractual terms (such as liability limitations), develop our own innovative approaches to mining data and using information, develop our own disruptive technologies, or increase compensation, which may have an adverse effect on our revenue and profit margins. We may also need to become increasingly productive and efficient in the way we deliver services, or with respect to the cost structure supporting our businesses, which may in turn require more innovative uses of technology as well as data gathering and data mining.
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Our industry has continued to consolidate, and there is an inherent risk competitive firms may be more successful than we are at growing through merger and acquisition activity. While we have successfully grown organically and through a series of acquisitions, sourcing and completing acquisitions are complex and sensitive activities. Considering the continuing need to provide clients with more comprehensive services on a more productive and cost-efficient basis, we expect acquisition opportunities to continue to emerge. However, there is no assurance we will be able to continue our acquisition activity in the future at the same pace as we have in the past, particularly as we weigh acquisition opportunitiesagainst other potential uses of capital for technology and other investments in systems and human resources, as well as returning capital to shareholders.
Weaknesses in the markets in which our clients compete may lead to additional pricing pressure from clients as they themselves come under financial pressure.
THE SEASONALITY IN PARTS OF OUR BUSINESS EXPOSES US TO RISKS.
In parts of our business, our revenue and profits have historically grown progressively by quarter throughout the year mostly due to completing or documenting transactions by fiscal year-end and the fact that certain of our expenses are constant through the year. Historically, we have reported a relatively smaller profit in the first quarter and then increasingly larger profits during each of the following three quarters, excluding the recognition of investment-generated performance fees and co-investment equity gains or losses, each of which can vary from period to period.
The seasonality of these parts of our business makes it difficult to determine during the course of the year whether planned results will be achieved, and thus to budget, and to adjust to changes in expectations. In addition, negative economic or other conditions that arise at a time when they impact performance in the fourth quarter, such as the particular timing of when larger transactions close or changes in the value of the U.S. dollar against other currencies occur, may have a more pronounced impact than if they occurred earlier in the year. To the extent we are not able to identify and adjust for changes in expectations, or we are confronted with negative conditions that disproportionately impact the fourth quarter of a calendar year, we could experience a material adverse effect on our financial performance.
Growth in our Property Management and Workplace Management businesses and other services related to the growth of outsourcing of corporate real estate services has, to an extent, lessened the seasonality in our revenue and profits during the past several years.
WE ARE SUBJECT TO RISKS INHERENT IN MAKING ACQUISITIONS AND ENTERING INTO JOINT VENTURES.
Historically, a significant component of our growth has been generated by acquisitions. Any future growth through acquisitions will depend in part on the continued availability of suitable acquisitions at favorable prices and with advantageous terms and conditions, which may not be available to us.
Acquisitions subject us to several significant risks, any of which may prevent us from realizing the anticipated benefits or synergies of the acquisition. The integration of companies is a complex and time-consuming process that could significantly disrupt the businesses of JLL and the acquired company such as: diversion of management attention, failure to identify certain liabilities and issues during the due diligence process, including historical instances of misconduct, and the inability to retain personnel and clients of the acquired business.
From time to time, we have entered into joint ventures to conduct certain businesses or enter new geographies, and we will consider doing so in appropriate situations in the future. Joint ventures have many of the same risk characteristics as acquisitions, particularly with respect to the due diligence and ongoing relationship with joint venture partners, given each partner has inherently less control in a joint venture and will be subject to the authority and economics of the particular structure that is negotiated. Accordingly, we may not have the authority to direct the management and policies of the joint venture. If a joint venture participant acts contrary to our interests, it could harm our brand, business, results of operations and financial condition.
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WE ARE SUBJECT TO RISKS INHERENT TO INVESTMENT AND REAL ESTATE INVESTMENT BANKING ACTIVITIES.
One component of our business strategy includes investing in (i) real estate, both individually and along with our investment management clients, and (ii) proptech funds and early to mid-stage proptech companies. As of December 31, 2025, we have unfunded commitment obligations of up to $210.8 million to fund future investments across our investment strategies. To remain competitive with well-capitalized financial services firms, we may also use our capital to acquire properties before the related investment management funds have been established or investment commitments have been received from third-party clients.
Certain service lines we operate have the acquisition, development, management and sale of real estate and proptech investments as part of their strategy. Investing in any of these types of situations exposes us to several risks:
• We may lose some or all of the capital we invest if the investments underperform.
◦ For real estate investments, underperformance may result from many factors outside of our control, including the general reduction in asset values within a particular geography or asset class.
◦ For proptech investments, the concepts and strategic plans underpinning the value of the fund or entity may not be realized or could be poorly executed. In addition, the fund or entity may be negatively impacted by risks to which they are exposed (some of which we are also exposed to and are discussed elsewhere in this Item).
• We will have fluctuations in earnings and cash flow as we recognize gains or losses, and receive cash upon the disposition of investments, the timing of which may be geared toward the benefit of our clients.
In certain situations, we raise funds from outside investors where we are the sponsor of real estate investments, developments, or projects. To the extent we return less than the investors' original investments because the investments, developments, or projects have underperformed relative to expectations, the investors could attempt to recoup the full amount of their investments under securities law theories such as lack of adequate disclosure when funds were initially raised. Sponsoring funds into which retail investors can invest, such as the investment funds sponsored by Investment Management, may increase this risk.
Legal, Compliance and Regulatory Risk Factors
Legal and compliance risk relates to risks arising from the government and regulatory environment and action, legal proceedings, and compliance with integrity policies and procedures. Government and regulatory risks include the risk that government or regulatory actions will impose additional cost on us or cause us to have to change our business models or practices.
COMPLIANCE WITH MULTIPLE AND POTENTIALLY CONFLICTING LAWS AND REGULATIONS, INCLUDING SANCTIONS AND ANTI-MONEY LAUNDERING REQUIREMENTS, AND DEALING WITH CHANGES IN LEGAL AND REGULATORY REQUIREMENTS MAY BE DIFFICULT, BURDENSOME AND/OR EXPENSIVE.
We face a broad range of legal and regulatory environments in the countries in which we do business and identifying and complying with these regulations is complex. We may not be successful in complying with regulations in all situations and could, therefore, be subject to regulatory actions and fines for non-compliance.
We are subject to evolving and increasingly complex sanctions regimes and anti-money laundering (“AML”) regulations. As a global company, we must navigate a web of international sanctions imposed by various jurisdictions, including the U.S., EU and UK. These trade sanctions can target countries, entities, individuals, sectors, and designated goods, and they can change rapidly in response to geopolitical events. Failure to comply with applicable trade sanctions could result in severepenalties, including substantial fines, loss of business licenses, and reputational damage.
Similarly, AML regulations require us to implement “know your customer” (KYC) procedures and report suspicious transactions. The global nature of our business, particularly in real estate transactions and investment management, exposes us to the risk of inadvertently facilitating money laundering or terrorist financing. Penalties for AML violations can be severe, including criminalprosecution of the company and individual employees.
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Our employees or supply partners may directly or indirectly engage in unethical, illegal or non-compliant practices related to bribery, corruption, money laundering, fraud, international trade sanctions, modern slavery, violations of applicable data privacy laws, or other acts that constitute a breach of our Code of Ethics. Failure to adequately prevent, monitor, and detect such behavior could lead to significant reputational damage, regulatory consequences, and adversely impact our operations, profitability and enterprise value. The increased utilization of AI by third-party fraudsters also may exacerbate all, or some, of these risks and it can be challenging to keep pace with the emerging technologies third-parties are using to commit fraudulent and other illegal acts targeting JLL and its supply chain partners.
Changes in legal and regulatory requirements can impact our ability to engage in business in certain jurisdictions or increase the cost of doing so. The legal requirements of U.S. statutes may also conflict with local legal requirements in a particular country. Avoiding regulatory pitfalls as a result of conflicting laws will continue to be a key focus as non-U.S. statutory law and court decisions create more ambiguity. The jurisdictional reach of laws may be unclear as well, such as when laws in one country purport to regulate the behavior of our subsidiaries or affiliates operating in another country.
Our global operations must comply with all applicable anti-corruption laws, including the U.S. Foreign Corrupt Practices Act and the UK Bribery Act. These anti-corruption laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence government officials or private individuals for the purpose of obtaining or retaining a business advantage. Such prohibitions exist regardless of whether those practices are legal or culturally expected in a particular jurisdiction. Our compliance program may not prevent violations of such laws, which could result in criminal or civil sanctions and have an adverse effect on our reputation, business, and results of operations and financial condition.
U.S. laws and regulations govern the provision of products and services to, and of other trade-related activities involving, certain targeted countries and parties. As a result, we have had longstanding policies and procedures to restrict or prohibit sales of our services into countries subject to embargoes and sanctions, or to countries designated as state sponsors of terrorism. In conjunction with such policies, we have also implemented certain procedures to evaluate whether existing or potential clients appear on the "Specially Designated Nationals and Blocked Persons List" maintained by OFAC. However, the complexity and rapid changes in sanctions regimes mean that we may inadvertently engage with sanctioned entities or individuals.
Changes in governments or majority political parties may result in significant changes in enforcement priorities with respect to employment, health and safety, tax, securities disclosure and other regulations, which, in turn, could negatively affect our business.
WE ARE SUBJECT TO COMPLEX AND EVOLVING LICENSING REQUIREMENTS.
Several of our business operations are subject to requirements in various jurisdictions to maintain licenses. If we fail to maintain our licenses or conduct licensed activities without a license, we may be required to pay fines, return commissions or investment capital from investors or may have a given license suspended or revoked. Our acquisition activity increases these risks, because we must successfully transfer licenses of acquired entities and their staff, as appropriate. Licensing requirements may also preclude us from engaging in certain types of transactions or change the way in which we conduct business or the cost of doing so. In addition, because the size and scope of real estate sales transactions, the number of countries in which we operate or invest, and the areas we offer services have increased significantly during the past several years, both the difficulty of ensuring compliance with the numerous licensing requirements and the possible loss resulting from noncompliance, have increased.
With respect to our status as an approved lender for Fannie Mae, Freddie Mac and as a HUD-approved originator and issuer of Ginnie Mae securities (collectively the "Agencies"), we are required to comply with various eligibility criteria established by the Agencies, such as minimum net worth, operational liquidity and collateral requirements. In addition, we are required to originate and service loans in accordance with the applicable program requirements and guidelines established from time to time by the Agencies. Failure to comply with any of these program requirements may result in the termination or withdrawal of our approval to sell loans to the Agencies and service their loans.
Licensing requirements in various jurisdictions may change, increasing compliance costs. Particularly in emerging markets, there can be relatively less transparency around the standards and conditions under which licenses are granted, maintained, or renewed. It also may be difficult to defendagainst the arbitrary revocation of a license in a jurisdiction where the rule of law is less well developed.
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As a licensed real estate service provider and advisor in various jurisdictions, we and our licensed employees may be subject to various licensing obligations that vary by jurisdiction. Failure to maintain proper licensing could subject us to loss of our ability to conduct business in those jurisdictions. We could also face fines, penalties, or suspension of licenses if we fail to meet licensing requirements.
WE FACE RISKS RELATING TO ENVIRONMENTAL AND CLIMATE MATTERS, INCLUDING DELIVERING ON OUR 2030 AND 2040 CARBON REDUCTION COMMITMENTS AND COMPLYING WITH EVOLVING CLIMATE-RELATED DISCLOSURE REQUIREMENTS.
We may face liability with respect to environmental issues occurring at properties we manage or occupy, or in which we invest. We may face costs or liabilities under these laws as a result of our role as an on-site property manager or a manager of construction projects. Our risks for such liabilities may increase as we expand our services to include more industrial and/or manufacturing facilities than has been the case in the past, or with respect to our co-investments in real estate as discussed above.
The impact of climate change presents a significant risk. Damage to assets caused by extreme weather events linked to climate change is becoming more evident, highlighting the fragility of global infrastructure. We also anticipate the potential effects of climate change will increasingly impact our own operations and those of client properties we manage, especially when they are in coastal cities, and may impair asset valuations.
We anticipate the potential effects of climate change will increasingly impact the decisions and analyses we make with respect to investments in the properties we manage, as well as those we consider for acquisition or disposition on behalf of clients, since climate change considerations can impact the relative desirability of locations and the cost of operating and insuring properties. Future legislation could require specific performance levels for building operations resulting in non-compliant buildings becoming obsolete. This could materially affect investments in properties we have made on behalf of clients, including those in which we may have co-invested. Climate change considerations will likely also increasingly be part of the consulting work we do for clients to the extent it is relevant to the decisions our clients are seeking to make.
Around the world, many countries are enacting stricter regulations to protect the environment and preserve their natural resources. In Europe, the European Union's Environmental Liability Directive establishes a comprehensive liability standard, but individual EU countries may have stricter regulations. The risks may not be limited to fines and the costs of remediation. In Brazil, employees risk jail sentences as well as fines in connection with pollution incidents. China has set ambitious climate goals, including achieving carbon neutrality by 2060, and has implemented various policies and regulations to support these objectives. This follows environmental protection laws passed in 2014 designed to limit contaminated water, air and soil linked to economic growth and public health. New environmental legislation and regulations may require us to make material changes to our operations, which could adversely affect operating results. Furthermore, the perspectives of shareholders, employees and other stakeholders regarding these standards may affect our business activities and increase disclosure requirements, which may increase our costs.
If we fail to meet our carbon reduction commitments or comply with evolving environmental regulations this may expose us to risks that could have a significant impact on our business operations and financial performance. These risks encompass reputational damage, potential legal and regulatory penalties, litigation, increased compliance costs, and diminished access to financing and investment opportunities. Additionally, failure to effectively reduce carbon emissions may result in negative public perception, reduced client demand, and potential loss of competitive advantage. Failure to adapt to changing environmental standards and adequately manage our carbon footprint may also expose us to potential disruptions in supply chains, constraints on resource availability, and limitations on access to certain markets. Failure to address these risks could have adverse consequences on our financial condition, operations, and long-term sustainability.
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Our business faces evolving climate change disclosure requirements, including the recommendations outlined by the Task Force on Climate-related Financial Disclosures (TCFD) and the Corporate Sustainability Reporting Directive (CSRD). A failure to fulfill these obligations, including the proper disclosure of climate-related risks, opportunities, and our approach to managing them, may lead to reputational damage, legal and regulatory sanctions and potential financial consequences. Developments in climate change reporting standards, frameworks and guidelines may require us to provide more detailed information on greenhouse gas emissions, climate-related risks and sustainability initiatives, increasing the complexity and cost of compliance. Furthermore, the potential misinterpretation or criticism of our disclosed climate change data and actions could impact our relationships with investors, customers and other stakeholders. Additionally, as climate-related regulations and reporting requirements continue to evolve globally, we may face challenges in maintaining compliance across all jurisdictions in which we operate, potentially leading to increased operational costs and complexity in our reporting process.
Financial Risk Factors
Financial risk relates to our ability to meet financial obligations and mitigate exposure to broad market risks, including volatility in foreign currency exchange rates and interest rates; credit risk; and liquidity risk, including risk related to our credit ratings and our availability and cost of funding.
VOLATILITY IN TRANSACTIONAL-BASED REVENUE MAY IMPACT OUR PROFITABILITY.
We have product offerings, such as leasing and capital markets activities including investment sales and debt advisory, that generate fees based on the timing, size and pricing of closed transactions, and these fees may significantly contribute to our net income and to changes in earnings from one quarter or year to the next. Volatility in this component of our earnings is inevitable due to the nature of these businesses and the amount of the fees we will recognize in future quarters is inherently unpredictable.
In addition, Investment Management's portfolio is of sufficient size to periodically generate large incentive fees and equity earnings (losses) that significantly influence our earnings and the changes in earnings from one year to the next. Volatility in this component of our earnings is also inevitable due to the nature of this aspect of our business, and the amount of incentive fees or equity earnings or losses we may recognize in future quarters is inherently unpredictable as it relates to client needs, the market and other dynamics in effect at the time.
CURRENCY RESTRICTIONS, EXCHANGE RATE FLUCTUATIONS, AND INFLATIONARY PRESSURES MAY MATERIALLY IMPACT OUR FINANCIAL RESULTS.
We produce positive cash flows in various countries and currencies that can be most effectively used to fund operations in other countries or to repay our indebtedness, which is currently primarily denominated in U.S. dollars and euros. We face restrictions in certain countries that limit or prevent the transfer of funds to other countries or the exchange of the local currency to other currencies. We also face risks associated with fluctuations in currency exchange rates that may lead to a decline in the value of the funds earned in certain jurisdictions.
Although we operate globally, we report our results in U.S. dollars, and thus our reported results are impacted by the strengthening or weakening of currencies against the U.S. dollar. Our revenue from outside of the United States approximated 38% of our total revenue for 2025. In addition to the potential negative impact on reported earnings, fluctuations in currencies relative to the U.S. dollar may make it more difficult to perform period-to-period comparisons of the reported results of operations.
We are subject to inflationary pressures on employee wages, salaries, and the cost of various goods and services including energy costs that we procure which can materially impact our financial results. While we attempt to mitigate the impact of inflation in our client agreements, some client agreements may be entered into on a fixed or guaranteed maximum price basis where our ability to make price adjustments to take into account inflation may be limited.
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EXPOSURE TO ADDITIONAL TAX LIABILITIES STEMMING FROM OUR GLOBAL OPERATIONS AND CHANGES IN TAX LEGISLATION, REGULATION AND TAX RATES COULD ADVERSELY AFFECT OUR FINANCIAL RESULTS.
We face a variety of risks of increased future taxation on our earnings as a corporate taxpayer in the countries in which we have operations. Moving funds between countries can produce adverse tax consequences. In addition, as our operations are global, we face challenges in effectively gaining a tax benefit for costs incurred in one country that benefit our operations in other countries.
Changes in tax legislation or tax rates may occur in one or more jurisdictions in which we operate that may materially impact the cost of operating our business. Recent legislative changes in the United States include the 2022 Inflation Reduction Act and the 2025 One Big Beautiful Bill Act, which have introduced limitations on certain business-related deductions, continued taxation of foreign earnings in the U.S., and established a corporate minimum tax, all of which could increase our future tax expense.
In addition, many countries have enacted significant legislative policy changes in the taxation of multinational corporations, inspired by the “Pillar One” and “Pillar Two” initiatives of the Organization for Economic Co-operation and Development and the European Union Anti-Tax Avoidance Directives. It is also possible that some governments will make significant changes to their tax policies in response to factors such as budgetary needs, feedback from the business community and the public view on applicable tax planning activities. Further, interpretations of existing tax law in various countries may change due to the regulatory and examination policies of the tax authorities and the decisions of courts.
We face such risks both in our own business and in the investment funds LaSalle operates. Adverse or unanticipated tax consequences to the funds can negatively impact fund performance, incentive fees and the value of co-investments we have made. We are uncertain as to the ultimate results of these potential changes or what their effects will be on our business.
A FAILURE TO MAINTAIN FINANCIAL RESILIENCE COULD IMPAIR OUR BALANCE SHEET, LIQUIDITY, AND ABILITY TO EXECUTE OUR STRATEGY.
Our ability to navigate market cycles and invest in strategic priorities depends on our financial resilience. This resilience may be threatened by several factors. Our balance sheet is exposed to potential material losses from our co-investments and other capital commitments, which could cause earnings volatility and constrain future investment capacity. Our debt and liquidity are subject to risk from potential constraints on our access to credit or a breach of debt covenants, which could reduce our operational flexibility, particularly during periods of market stress. We face challenges in rapidly adjusting our cost base in response to revenue declines, which could compress margins and pressure cash flow. Finally, our working capital and liquidity could be negatively impacted by challenges in managing receivables and bad debt exposures, which may limit funds available for strategic needs. A failure in any of these areas could impact our investment grade credit rating, reduce shareholder equity, and harm our financial performance.
General Risk Factors
OUR BUSINESS IS SUBJECT TO GENERAL ECONOMIC CONDITIONS AND REAL ESTATE MARKET CONDITIONS AS WELL AS SUPPLY-CHAIN PRESSURES.
The success of our business is significantly related to general economic conditions. Further, our business and financial conditions correlate strongly to local, national and regional economic and political conditions or, at least, the perceptions of and confidence in those conditions. Interest rate volatility, tighter lending standards, and elevated price uncertainty can put downward pressure on transaction volumes and significantly impact our fees and our business with revenues and assets tied to market performance.
We have previously experienced and expect in the future that we will be negatively impacted by periods of economic slowdown or recession and corresponding declines in the demand for real estate and related services. The ongoing reconfiguration of global supply chains for greater resilience, combined with persistent geopolitical tensions, continues to create volatility in the cost and availability of materials, which can affect project timelines and profitability for our clients and our business.
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The risk of market volatility and fluctuating real estate asset values could create liquidity issues for our counterparties and/or lead to tightened lending conditions, which may negatively affect our cash flow and access to credit. Persistent economic uncertainty may prolong commercial real estate and investor decision making and have a dampening effect on our results.
Negative economic conditions and declines in demand for real estate and related services in several markets or in significant markets could have a material adverse effect on our performance driven by (i) a decline in acquisition and disposition activity, (ii) a decline in real estate values and performance, leasing activity and rental rates, (iii) a decline in value of real estate securities, (iv) the cyclicality in the real estate markets and lag in recovery relative to broader markets, or (v) the effect of changes in non-real estate markets.
OUR REPUTATION AND BRAND ARE IMPORTANT COMPANY ASSETS; IF WE FAIL TO PROTECT THEM, OUR BUSINESS MAY BE NEGATIVELY IMPACTED.
The value and premium status of our brand is one of our most important assets. An inherent risk in maintaining our brand is that we may fail to successfully differentiate the scope and quality of our service and product offerings from those of our competitors, or that we may fail to sufficiently innovate or develop improved products or services that will be attractive to our clients.
The rapid dissemination and increasing transparency of information, particularly for public companies, increases the risks to our business that could result from negative media or announcements about ethics lapses or other operational problems, which could lead clients to terminate or reduce their relationships with us. As such, any negative media, allegations or litigationagainst us, irrespective of the final outcome, could potentially harm our professional reputation and damage our business. We are also subject to misappropriation of one of the names or trademarks we own by third parties that do not have the right to use them so they can benefit from the goodwill we have built up in our intellectual property; further, our efforts to police usage of our intellectual property may not be successful in all situations.
DOWNGRADES IN OUR CREDIT RATINGS COULD INCREASE OUR BORROWING COSTS OR REDUCE OUR ACCESS TO FUNDING SOURCES IN THE CREDIT AND CAPITAL MARKETS.
We are currently assigned corporate credit ratings from Moody's and S&P based on their evaluation of our creditworthiness. As of the date of this filing, our debt ratings remain investment grade, but there can be no assurance we will not be downgraded or that any of our ratings will remain investment grade in the future. If our credit ratings are downgraded or other negative action is taken, by one or more rating agencies, this could adversely affect our access to funding sources, the cost and other terms of obtaining funding as well as our overall financial condition, operating results and cash flow.
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
An understanding of our accounting policies is necessary for a complete analysis of our results, financial position, liquidity and trends. The preparation of our financial statements requires management to make certain critical accounting estimates and judgments that impact (i) the stated amount of assets and liabilities, (ii) disclosure of contingent assets and liabilities as of the date of the financial statements and (iii) the reported amounts of revenue and expenses during the reporting periods. These accounting estimates are based on management's judgment. We consider them to be critical because of their significance to the financial statements and the possibility future events may differ from current judgments, or that the use of different assumptions could result in materially different estimates. We review these estimates on a periodic basis to ensure reasonableness. Although actual amounts may differ from such estimated amounts, we believe such differences are not likely to be material. For additional detail regarding our critical accounting policies and estimates discussed below, see Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements, included in Item 8.
Revenue Recognition
We earn revenue from the following services (segments are bolded).
• Real Estate Management Services
◦ Workplace Management
◦ Project Management
◦ Property Management
◦ Portfolio Services and Other
• Leasing Advisory
◦ Leasing
◦ Advisory, Consulting and Other
• Capital Markets Services
◦ Investment Sales, Debt/Equity Advisory and Other
◦ Loan Servicing
◦ Value and Risk Advisory
• Investment Management
• Software and Technology Solutions
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Our services are generally earned and billed in the form of transaction commissions, advisory and management fees, and incentive fees. Some of the contractual terms related to the services we provide, and thus the revenue we recognize, can be complex, requiring us to make judgments about our performance obligations and the timing and extent of revenue to recognize. In addition, a significant portion of our revenue represents the reimbursement of costs we incur on behalf of clients.
Goodwill and Other Intangible Assets
Consistent with the services nature of the businesses we have acquired, the largest asset on the Consolidated Balance Sheets is goodwill. We do not amortize goodwill; instead, we evaluate goodwill for impairment at least annually, or as events or changes in circumstances indicate the carrying value may be impaired.
In addition, we may record intangible assets as a result of acquisitions, which are primarily composed of customer relationships, management contracts and customer backlog, and are amortized on a straight-line basis over their estimated useful lives. We generally use the income approach to determine fair value, which requires management to make significant estimates and assumptions. These estimates and assumptions primarily include discount rates, terminal growth rates, forecasts of revenue, operating income and capital expenditures. The discount rates reflect the risk factors, from the perspective of a market participant, associated with forecasts of cash flows. In addition, we establish an intangible upon closing on the sale of a mortgage loan we originated, concurrent with the retention of its servicing rights and amortize the intangible over the estimated period net servicing income is projected to be received.
Although we believe our intangible asset estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on the determination of the fair value of the identified intangible assets acquired. Judgment is also required in determining the useful life of a finite-lived intangible asset. We evaluate our identified intangibles for impairment at least annually, or as events or changes in circumstances indicate the carrying value may be impaired.
Investments
Substantially all of our investments are grouped within one of the following two categories.
First, we invest in certain real estate ventures that primarily own and operate commercial real estate, historically through co-investments in funds that Investment Management establishes in the ordinary course of business for its clients. These investments include non-controlling ownership interests generally ranging from less than 1% to 10% of the respective ventures. We account for these investments at fair value or under the equity method of accounting.
Second, we invest in proptech funds and early to mid-stage companies through the JLL Spark Global Ventures Funds. We account for a majority of these investments at fair value. Certain investments are accounted for under the measurement alternative, defined as cost minus impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
Where applicable, we estimate fair value of our investments using the net asset value ("NAV") per share (or its equivalent) our investees provide. Critical inputs to NAV estimates include fund financial statements, valuations of the underlying real estate assets and borrowings, which incorporate investment-specific assumptions such as discount rates, capitalization rates, rental and expense growth rates and asset-specific market borrowing rates. In circumstances where the NAV provided by the investee has a reporting date different than ours or when the NAV is not calculated consistent with U.S. GAAP measurement principles, we adjust the NAV accordingly.
For investments in proptech companies, we primarily estimate the fair value based on the per-share pricing. Subsequent funding rounds or changes in the companies' business strategy/outlook are indicators of a change in fair value. The fair value of certain investments is estimated using significant unobservable inputs which requires judgment due to the absence of market data. In determining the estimated fair value of these investments, we utilize appropriate valuation techniques including discounted cash flow analyses, scorecard method, Black-Scholes models and other methods as appropriate. Key inputs include projected cash flows, discount rates, peer group multiples and volatility.
For all investments reported at fair value, other than such investments where the measurement alternative has been elected, our investment is increased or decreased each reporting period by the difference between the fair value of the investment and
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the carrying value as of the balance sheet date. Investments for which the measurement alternative has been elected are remeasured if a qualifying observable price change occurs. We reflect these fair value adjustments as gains or losses on the Consolidated Statements of Comprehensive Income within Equity earnings/losses.
Income Taxes
We account for income taxes under the asset and liability method. We recognize deferred tax assets and liabilities for the expected future tax consequences attributable to (i) differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (ii) operating loss and tax credit carryforwards. We measure deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled. We recognize into income the effect on deferred tax assets and liabilities of a change in tax rates in the period including the enactment date.
Because of the global and cross-border nature of our business, our corporate tax position is complex. We generally provide for taxes in each tax jurisdiction in which we operate based on local tax regulations and rules. Such taxes are provided on pre-tax earnings and include the provision for taxes on substantively all differences between financial statement amounts and amounts used in tax returns, excluding certain non-deductible items and permanent differences.
Our global effective tax rate is sensitive to the complexity of our operations as well as to changes in the mix of our geographic profitability. We evaluate our estimated effective tax rate on a quarterly basis to reflect forecast changes in our geographic mix of income and legislative actions on statutory tax rates.
Based on our historical experience and future business plans, we do not expect to repatriate our foreign source earnings to the U.S. As of December 31, 2025, we have therefore not provided for withholding tax, dividend distribution tax, capital gains taxes, or other taxes which could arise upon such distribution. We believe our policy of permanently reinvesting earnings of foreign subsidiaries does not significantly impact our liquidity.
We have established valuation allowances against deferred tax assets where expected future taxable income does not support their realization on a more-likely-than-not basis. We formally assess the likelihood of being able to utilize current tax losses in the future on a country-by-country basis, commensurate with the determination of each quarter’s income tax provision. We establish or increase valuation allowances upon specific indications the carrying value of a tax asset may not be recoverable. Alternatively, we reduce valuation allowances upon (i) specific indications the carrying value of the related tax asset is more-likely-than-not recoverable or (ii) the implementation of tax planning strategies which allow an asset we previously determined to be not realizable to be viewed as realizable.
Estimations and judgments relevant to the determination of tax expense, assets, and liabilities require analysis of the tax environment and the future profitability, for tax purposes, of local statutory legal entities rather than business segments. Our statutory legal entity structure generally does not mirror the way we organize, manage and report our business operations. For example, the same legal entity may include Capital Markets Services, Real Estate Management Services and Leasing Advisory businesses in a particular country.
In situations where we believe that there may be uncertainty with respect to the recognition of tax benefits, we provide reserves for those benefits. Changes to the amounts of our unrecognized tax benefits may occur as a result of ongoing operations, the outcomes of audits or other examinations by tax authorities, or the passing of statutes of limitations. We do not expect changes to our unrecognized tax benefits to have a significant impact on net income, the financial position, or the cash flows of JLL. We do not believe we have material tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
NEW ACCOUNTING STANDARDS
Refer to Note 2, Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements, included in Item 8.
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ITEMS AFFECTING COMPARABILITY
Macroeconomic Conditions
Our results of operations and the variability of these results are significantly influenced by (i) macroeconomic trends, (ii) geopolitical environment, (iii) global and regional real estate markets and (iv) financial and credit markets. These macroeconomic and other conditions have had, and we expect will continue to have, a significant impact on the variability of our results of operations.
Acquisitions and Dispositions
The timing of acquisitions may impact the comparability of our results on a year-over-year basis. Our results include incremental revenues and expenses following the completion date of an acquisition. Relating to dispositions, comparable results will include the revenues and expenses of recent dispositions, and may also include gains (losses) on the disposition. In addition, there is generally an initial adverse impact on net income from an acquisition as a result of pre-acquisition due diligence expenditures, transaction/deal costs and post-acquisition integration costs, such as fees from third-party advisors engaged to assist with onboarding and process alignment, retention and severance expense, early lease termination costs, and other integration expenses. For dispositions, we may also incur such incremental costs during the disposition process and these costs could have an adverse impact on net income.
Transaction-Based Revenues and Equity Earnings/Losses
Transaction-based revenues are impacted by the size and timing of our clients' transactions. Such revenues include investment sales, debt/equity advisory fees and other capital markets activities, agency and tenant representation leasing transactions, incentive fees, and other services/offerings, which increase the variability of the revenue we earn. Specifically for Investment Management, the magnitude and timing of recognition of incentive fees are driven by one or a combination of the following: changes in valuations of the underlying investments; dispositions of managed assets; and the contractual measurement periods with clients. The timing and the magnitude of transaction-based revenues can vary significantly from year to year and quarter to quarter, and also vary geographically.
Equity earnings/losses may vary substantially from period to period for a variety of reasons, including as a result of (i) valuation increases (decreases) on investments reported at fair value, (ii) gains (losses) on asset dispositions and (iii) impairment charges. The timing of recognition of these items may impact comparability between quarters, in any one year, or compared to a prior year.
The comparability of these items can be seen in Note 3, Business Segments, of the Notes to Consolidated Financial Statements, included in Item 8, and is discussed further in Segment Operating Results included herein.
Foreign Currency
We conduct business using a variety of currencies, but we report our results in U.S. dollars. As a result, the volatility of currencies against the U.S. dollar may positively or negatively impact our results. This volatility can make it more difficult to perform period-to-period comparisons of the reported U.S. dollar results of operations because such results may indicate a rate of growth or decline that might not have been consistent with the real underlying rate of growth or decline in the local operations. Consequently, we provide information about the impact of foreign currencies in the period-to-period comparisons of the reported results of operations in our discussion and analysis of financial condition in the Results of Operations section below.
MARKET RISKS
The principal market risks we face due to the risk of loss arising from adverse changes in market rates and prices are:
• Interest rates on our unsecured credit facility (the "Facility"); and
• Foreign exchange risks.
In the normal course of business, we manage these risks through a variety of strategies, including hedging transactions using various derivative financial instruments such as foreign currency forward contracts. We enter into derivative instruments with high credit-quality counterparties and diversify our positions across such counterparties in order to reduce our exposure to credit losses. We do not enter into derivative transactions for trading or speculative purposes.
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Interest Rates
We centrally manage our debt, considering investment opportunities and risks, tax consequences and overall financing strategies. Our overall interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. We are primarily exposed to interest rate risk on our Facility, which had a maximum borrowing capacity of $3.30 billion as of December 31, 2025. We had no outstanding borrowings under the Facility as of December 31, 2025. The Facility bears a variable rate of interest that fluctuates based on market rates.
Our $400.0 million of senior unsecured notes are due December 2028 and bear interest at a fixed annual rate of 6.875%. Our €350.0 million face value of Euro Notes is split between €175.0 million due in June 2027 and €175.0 million due in June 2029, bearing interest at fixed annual rates of 1.96% and 2.21%, respectively. The issuance of the senior notes and Euro Notes at fixed interest rates has helped to limit our exposure to future movements in interest rates.
We maintain a commercial paper program (the "Program") in which we may issue up to $2.5 billion of short-term, unsecured and unsubordinated commercial paper notes at any time. We had no outstanding borrowings under the Program as of December 31, 2025. Our Program provides us with another source of short-term capital, which may help us mitigate interest rate risk.
We assess interest rate sensitivity to estimate the potential effect of rising interest rates on our variable rate debt. For the year ended December 31, 2025, if interest rates were 50 basis points higher, Interest expense, net of interest income, would have been $3.5 million higher.
Foreign Exchange
Foreign exchange risk is the risk we will incur economic losses due to adverse changes in foreign currency exchange rates. Our revenue from outside of the U.S. approximated 38% and 39% of our total revenue for the years ended December 31, 2025 and 2024, respectively, as outlined in the table below. Operating in international markets means we are exposed to movements in foreign exchange rates, most significantly the British pound and the euro.
We mitigate our foreign currency exchange risk principally by (i) establishing local operations in the markets we serve and (ii) invoicing customers in the same currency as the source of the costs. The impact of translating expenses incurred in foreign currencies into U.S. dollars reduces the impact of translating revenue earned in foreign currencies into U.S. dollars. In addition, British pound and Singapore dollar expenses incurred as a result of our regional employee hubs being located in London and Singapore, respectively, act as ongoing partial operational hedges against our translation exposures to those currencies.
We enter into cross-currency swaps and foreign currency forward contracts to manage currency risks associated with net investments in foreign operations and intercompany loan balances, respectively. As of December 31, 2025, we had cross-currency swap contracts with a gross notional value of $805.8 million and forward contracts with a gross notional value of $2.04 billion. For forward contracts, the corresponding net carrying gain/loss is generally offset by a carrying gain/loss in associated intercompany loans.
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Although we operate globally, we report our results in U.S. dollars. As a result, the strengthening or weakening of the U.S. dollar in relation to currencies we are exposed to may positively or negatively impact our reported results. The following table sets forth the revenue derived from our most significant currencies.
Year Ended December 31,
($ in millions)
% of Total
% of Total
United States dollar
British pound
Euro
Australian dollar
Indian rupee
Canadian dollar
Hong Kong dollar
Chinese yuan
Singapore dollar
Japanese yen
Other currencies
Total revenue
Had British pound-to-U.S. dollar exchange rates been 10% higher throughout the course of 2025, we estimate our reported operating income would have increased by $11.8 million. Had euro-to-U.S. dollar exchange rates been 10% higher throughout the course of 2025, we estimate our reported operating income would have increased by $7.4 million. These hypothetical calculations estimate the impact of translating results into U.S. dollars and do not include an estimate of the impact a 10% increase in the U.S. dollar against other currencies would have on our foreign operations.
Seasonality
Historically, we have reported a relatively smaller revenue and profit in the first quarter with both measures increasing during each of the following three quarters. This is a result of a general focus in the real estate industry on completing or documenting transactions by calendar year end and the fact that certain expenses are constant throughout the year. Our seasonality excludes the recognition of investment-generated performance fees and realized and unrealized investment equity earnings and losses. Specifically, we recognize incentives fees when assets are sold or as a result of valuation increases in the portfolio, the timing of which may not be predictable or recurring. In addition, investment equity gains and losses are primarily dependent on underlying valuations, and the direction and magnitude of changes to such valuations are not predictable. Non-variable operating expenses, which we treat as expenses when incurred during the year, are relatively constant on a quarterly basis. Other factors may affect seasonality.
Inflation
Our operating expenses fluctuate with our revenue and general economic conditions, including inflation. However, we do not believe inflation had a material impact on our results of operations for the twelve months ended December 31, 2025.
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RESULTS OF OPERATIONS
Definitions
• Assets under management data for Investment Management is primarily reported on a one-quarter lag.
• "n.m.": not meaningful, typically represented by a percentage change of greater than 1,000%, favorable or unfavorable.
• Effective January 1, 2025, we report Project Management in Resilient revenue. Prior period financial information was recast to conform with this presentation.
• We define "Resilient" revenue as (i) Workplace Management, Project Management and Property Management, within Real Estate Management Services, (ii) Value and Risk Advisory, and Loan Servicing, within Capital Markets Services, (iii) Advisory Fees, within Investment Management and (iv) Software and Technology Solutions. In addition, we define "Transactional" revenue as (i) Portfolio Services and Other, within Real Estate Management Services, (ii) Leasing Advisory, (iii) Investment Sales, Debt/Equity Advisory and Other, within Capital Markets Services and (iv) Incentive fees and Transaction fees and other, within Investment Management.
• Gross contract costs represent certain costs associated with client-dedicated employees and third-party vendors and subcontractors and are directly or indirectly reimbursed through the fees we receive. These costs are presented on a gross basis in Operating expenses (with the corresponding fees in Revenue).
Year Ended December 31, 2025 compared with Year Ended December 31, 2024
Year Ended December 31,
Change in
% Change in Local Currency
($ in millions)
U.S. dollars
Real Estate Management Services
Leasing Advisory
Capital Markets Services
Investment Management
Software and Technology Solutions
Revenue
Platform compensation and benefits
Platform operating, administrative and other expenses
Depreciation and amortization
Total platform operating expenses
Gross contract costs
Restructuring and acquisition charges
Total operating expenses
Operating income
Equity losses
Net non-cash MSR and mortgage banking derivative activity
Adjusted EBITDA
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Non-GAAP Financial Measures
Management uses certain non-GAAP financial measures to develop budgets and forecasts, measure and reward performance against those budgets and forecasts, and enhance comparability to prior periods. These measures are believed to be useful to investors and other external stakeholders as supplemental measures of core operating performance and include the following:
• Adjusted EBITDA attributable to common shareholders ("Adjusted EBITDA") and
• Percentage changes against prior periods, presented on a local currency basis.
However, non-GAAP financial measures should not be considered alternatives to measures determined in accordance with U.S. GAAP. Any measure that eliminates components of a company’s capital structure, cost of operations or investments, or other results has limitations as a performance measure. In light of these limitations, management also considers U.S. GAAP financial measures and does not rely solely on non-GAAP financial measures. Because our non-GAAP financial measures are not calculated in accordance with U.S. GAAP, they may not be comparable to similarly titled measures used by other companies.
Adjustments to U.S. GAAP Financial Measures Used to Calculate non-GAAP Financial Measures
Net non-cash MSR and mortgage banking derivative activity consists of the balances presented within Revenue composed of (i) derivative gains/losses resulting from mortgage banking loan commitment and warehousing activity and (ii) gains recognized from the retention of MSR upon origination and sale of mortgage loans, offset by (iii) amortization of MSR intangible assets over the period that net servicing income is projected to be received. Non-cash derivative gains/losses resulting from mortgage banking loan commitment and warehousing activity are calculated as the estimated fair value of loan commitments and subsequent changes thereof, primarily represented by the estimated net cash flows associated with future servicing rights. MSR gains and corresponding MSR intangible assets are calculated as the present value of estimated net cash flows over the estimated mortgage servicing periods. The above activity is reported entirely within Revenue of the Capital Markets Services segment. Excluding net non-cash MSR and mortgage banking derivative activity reflects how we manage and evaluate performance because the excluded activity is non-cash in nature.
Restructuring and acquisition charges primarily consist of (i) severance and employment-related charges, including those related to external service providers, incurred in conjunction with a structural business shift, which can be represented by a notable change in headcount, change in leadership or transformation of business processes; (ii) acquisition, transaction and integration-related charges, including fair value adjustments, which are generally non-cash in the periods such adjustments are made, to assets and liabilities recorded in purchase accounting such as earn-out liabilities and intangible assets; and (iii) other restructuring, including lease exit charges. Such activity is excluded as the amounts are generally either non-cash in nature or the anticipated benefits from the expenditures would not likely be fully realized until future periods. Restructuring and acquisition charges are excluded from segment operating results and therefore not a line item in the segments’ reconciliation to Adjusted EBITDA.
Interest on employee loans, net of forgiveness reflects interest accrued on employee loans less the amount of accrued interest forgiven. Certain employees (predominantly in Leasing Advisory and Capital Markets Services) receive cash payments structured as loans, with interest. Employees earn forgiveness of the loan based on performance, generally calculated as a percentage of revenue production. Such forgiven amounts are reflected in Compensation and benefits expense. Given the interest accrued on these employee loans and subsequent forgiveness are non-cash and the amounts perfectly offset over the life of the loan, the activity is not indicative of core operating performance and is excluded from non-GAAP measures.
Equity earnings/losses (Investment Management and Proptech Investments) primarily reflects valuation changes on investments reported at fair value, which are increased or decreased each reporting period as fair value changes. Where the measurement alternative has been elected, our investment is increased or decreased upon observable price changes. Such activity is excluded as the amounts are generally non‑cash in nature and not indicative of core operating performance.
Note: Equity earnings/losses for segments other than Investment Management represent the results of unconsolidated operating ventures (not investments), and therefore, the amounts are included in Adjusted EBITDA on both a segment and consolidated basis.
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Credit losses on convertible note investments reflects credit impairments associated with pre-equity convertible note investments in early-stage proptech enterprises. Such losses are similar to the equity investment-related losses included in equity earnings/losses for Proptech Investments and are therefore consistently excluded from adjusted measures.
Reconciliation of Non-GAAP Financial Measures
Below is a reconciliation of Net income attributable to common shareholders to Adjusted EBITDA.
Year Ended December 31,
(in millions)
Net income attributable to common shareholders
Add:
Interest expense, net of interest income
Income tax provision
Depreciation and amortization (1)
Adjustments:
Restructuring and acquisition charges
Net non-cash MSR and mortgage banking derivative activity
Interest on employee loans, net of forgiveness
Equity losses - Investment Management and Proptech Investments (1)
Credit losses on convertible note investments
Adjusted EBITDA
(1) This adjustment excludes the noncontrolling interest portion which is not attributable to common shareholders.
In discussing our operating results, we refer to percentage changes in local currency, unless otherwise noted. Amounts presented on a local currency basis are calculated by translating the current period results of our foreign operations to U.S. dollars using the foreign currency exchange rates from the comparative period. We believe this methodology provides a framework for assessing performance and operations excluding the effect of foreign currency fluctuations.
The following table reflects the reconciliation to local currency amounts for consolidated (i) Revenue, (ii) Operating income and (iii) Adjusted EBITDA.
Year Ended December 31,
($ in millions)
% Change
Revenue:
At current period exchange rates
Impact of change in exchange rates
At comparative period exchange rates
Operating income:
At current period exchange rates
Impact of change in exchange rates
At comparative period exchange rates
Adjusted EBITDA:
At current period exchange rates
Impact of change in exchange rates
At comparative period exchange rates
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Revenue
Consolidated revenue increased 11% compared with 2024. Transactional revenues increased 13% collectively, led by Investment Sales, Debt/Equity Advisory and Other, up 23% (excluding the impact of non-cash MSR and mortgage banking derivative activity) and Leasing, up 11%. Resilient revenues grew 11%, highlighted by Project Management, up 20%, and Workplace Management, up 10%.
The following highlights Revenue by segment and type (Transactional versus Resilient), for the current and prior year ($ in millions). Refer to segment operating results for further detail.
Operating Expenses
Operating expenses increased 10% to $25.0 billion in 2025. Generally, the increase in operating expenses was largely driven by growth in revenue-related expenses, including pass-through costs (gross contract costs) and commission expense, and also reflected higher restructuring and acquisition charges. Greater platform leverage mitigated the revenue-related growth, as evidenced by the, lower, 8% increase in platform operating expenses. Refer to segment operating results for additional detail.
Restructuring and acquisition charges were higher, compared with 2024, primarily due to significantly lower net decreases to earn-out liabilities as well as higher severance and other employment-related charges. Refer to the following table for further detail.
Year Ended December 31,
(in millions)
Severance and other employment-related charges
Restructuring, pre-acquisition and post-acquisition charges
Fair value adjustments to earn-out liabilities
Restructuring and acquisition charges
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Interest Expense
Interest expense, net of interest income, for 2025 was $107.3 million, compared to $136.9 million in 2024. The improvement was primarily due to lower average borrowings with meaningful contributions from a lower average interest rate. The average outstanding borrowings under our credit facilities and commercial paper program was $1,119.7 million this year, with an average effective interest rate of 4.9%, in 2025, compared with $1,381.4 million, with an average effective interest rate of 5.9%, during 2024.
Equity Earnings/Losses
The following table details Equity earnings (losses) by category of investment. Specific to Proptech Investments, lower equity losses in 2025 were attributable to modest valuation increases across several investments and less significant valuation declines compared with 2024. Refer to the Investment Management segment discussion for additional details.
Year Ended December 31,
(in millions)
Investment Management
Proptech Investments
Other
Equity losses
Income Taxes
The provision for income taxes increased for the year as higher earnings before taxes outpaced the slight decline in our effective tax rate. The following details our Income tax provision and effective tax rate.
Year Ended December 31,
($ in millions)
Income tax provision
Effective tax rate
Refer to the Income Tax discussion in the Summary of Critical Accounting Policies and Estimates and Note 8, Income Taxes, of the Notes to Consolidated Financial Statements, included in Item 8, for a further discussion of our effective tax rate.
On July 4, 2025, the United States enacted the One Big Beautiful Bill Act ("OBBBA"). The OBBBA includes provisions altering the timing of deduction associated with certain depreciable assets, research and experimental expenses, and interest expense, with some effective in 2025 and some in 2026. The OBBBA further alters the determination and rates of taxation of international earnings, primarily effective in 2026. The current period’s financial statements include the impact of the OBBBA provisions effective for 2025, which are not material to either income tax expense or the financial statements as a whole.
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Net Income and Adjusted EBITDA
The following details Net income attributable to common shareholders, earnings per share and Adjusted EBITDA.
Year Ended December 31,
(in millions, except per share data)
Net income attributable to common shareholders
Basic earnings per common share
Diluted earnings per common share
Adjusted EBITDA
Higher profits were primarily driven by Leasing Advisory and Capital Markets Services, fueled by strong Transactional revenue growth, with incremental contributions from Real Estate Management Services. All segments reflected enhanced platform leverage and continued cost discipline. In addition, an approximate $25 million adverse impact associated with U.S. employee healthcare actuarial deficit was largely offset by discrete cost management actions. Refer to the segment performance highlights for additional detail.
In addition to the aforementioned segment drivers, Net income attributable to common shareholders was favorably impacted by lower Interest expense, net of interest income, and lower equity losses, and unfavorably impacted by higher Restructuring and acquisition charges. These additional drivers are discussed above in further detail.
Segment Operating Results
Effective January 1, 2025, we report Property Management (historically included in Markets Advisory, which was renamed Leasing Advisory) within Real Estate Management Services (formerly referred to as Work Dynamics). Additionally, Capital Markets, LaSalle and JLL Technologies were renamed to Capital Markets Services, Investment Management, and Software and Technology Solutions, respectively.
Effective July 1, 2025, we report the balances and activity associated with the investments historically reported within Software and Technology Solutions in "All Other." These investments (inclusive of convertible notes receivable) in proptech funds and early to mid-stage proptech companies ("Proptech Investments") do not constitute an operating or reporting segment.
Prior period financial information was recast to conform with the presentation changes described above.
Through December 31, 2025, we managed and reported our operations as five business segments: Real Estate Management Services, Leasing Advisory, Capital Markets Services, Investment Management, and Software and Technology Solutions. Our Real Estate Management Services business provides a broad suite of integrated services to occupiers of real estate, including facility and property management, project management, and portfolio and other services. We consider "Property Management" to be services provided to non-occupying property investors and "Workplace Management" to be services provided to facility occupiers. Leasing Advisory offers agency leasing and tenant representation, as well as advisory and consulting services. Our Capital Markets Services offerings include investment sales, debt and equity advisory, value and risk advisory, and loan servicing. Investment Management provides services on a global basis to institutional investors and other sources of private capital, while our Software and Technology Solutions segment offers various software products and services to our clients.
Segment operating expenses comprise Gross contract costs and Segment platform operating expenses, which includes Platform compensation and benefits; Platform operating, administrative and other expenses; and Depreciation and amortization. Our measure of segment results excludes Restructuring and acquisition charges.
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Real Estate Management Services
% Change
Year Ended December 31,
Change in
in Local
($ in millions)
U.S. dollars
Currency
Workplace Management
Project Management
Property Management
Portfolio Services and Other
Revenue
Platform compensation and benefits
Platform operating, administrative and other
Depreciation and amortization
Segment platform operating expenses
Gross contract costs
Segment operating expenses
Equity earnings
Adjusted EBITDA
Higher Real Estate Management Services revenue was primarily driven by Workplace Management and Project Management. Within Workplace Management, growth reflected a largely balanced mix of mandate expansions and new client wins. Management fees within Workplace Management were unfavorably impacted by approximately $12 million of higher pass-through costs, compared with the prior year, associated with the U.S. employee healthcare actuarial surplus/deficit. Project Management delivered 20% growth, with broad-based contributions from most geographies, as higher pass-through costs augmented a low double-digit management fee increase.
The increase in Segment platform operating expenses was primarily driven by higher compensation and benefits expense to support business growth, partially mitigated by enhanced platform leverage. The difference between the lower 4% increase in segment platform operating expenses compared with the 11% increase in total segment operating expenses was driven by incremental gross contract costs. In addition, an approximate $22 million adverse bottom-line impact associated with the U.S. medical actuarial surplus/deficit was largely offset by discrete cost management actions.
Adjusted EBITDA expansion was largely attributable to revenue growth described above together with the enhanced platform leverage.
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Leasing Advisory
% Change
Year Ended December 31,
Change in
in Local
($ in millions)
U.S. dollars
Currency
Leasing
Advisory, Consulting and Other
Revenue
Platform compensation and benefits
Platform operating, administrative and other
Depreciation and amortization
Segment platform operating expenses
Gross contract costs
Segment operating expenses
Adjusted EBITDA
The increase in Leasing Advisory revenue was attributable to Leasing, led by continued momentum in the office sector. Many geographies achieved double-digit Leasing revenue increases, with the most significant growth coming from the U.S., Germany and Canada. Broad-based growth across the U.S. was primarily driven by office — as a meaningful increase in average deal size complemented higher volume — and industrial, largely due to higher deal volume.
The increase in Segment platform operating expenses was driven by higher commissions, a direct result of the revenue growth, partially mitigated by greater platform leverage.
Higher Adjusted EBITDA was driven by the revenue growth coupled with incremental platform leverage.
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Capital Markets Services
% Change
Year Ended December 31,
Change in
in Local
($ in millions)
U.S. dollars
Currency
Investment Sales, Debt/Equity Advisory and Other
Value and Risk Advisory
Loan Servicing
Revenue
Platform compensation and benefits
Platform operating, administrative and other
Depreciation and amortization
Segment platform operating expenses
Gross contract costs
Segment operating expenses
Equity earnings
Net non-cash MSR and mortgage banking derivative activity
Adjusted EBITDA
Capital Markets Services top-line growth was fueled by investment sales and debt advisory transactions across nearly all sectors, with the most significant contributions coming from multifamily and office. Geographically, the growth was led by the U.S., UK and Spain. Globally, investment sales revenues were up 21%, outpacing the broader investment sales market, which grew 18% over the same period according to JLL Research. The current-year performance complemented a strong 2024 to achieve 43% and 57% top-line growth for investment sales and debt advisory, respectively, on a two-year stacked basis.
The increase in Segment platform operating expenses was primarily driven by higher commissions and other revenue-related costs.
The Adjusted EBITDA improvement was largely attributable to the transactional revenue growth, net of higher commissions, described above, together with enhanced platform leverage.
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Investment Management
% Change
Year Ended December 31,
Change in
in Local
($ in millions)
U.S. dollars
Currency
Advisory fees
Transaction fees and other
Incentive fees
Revenue
Platform compensation and benefits
Platform operating, administrative and other
Depreciation and amortization
Segment platform operating expenses
Gross contract costs
Segment operating expenses
Adjusted EBITDA (1)
Equity earnings (losses)
(1) Adjusted EBITDA excludes Equity earnings (losses) attributable to common shareholders for Investment Management.
The decrease in Investment Management revenue was predominantly attributable to the lower incentive fees, as expected. Transaction fees increased compared with the prior year, especially during the fourth quarter, reflecting improved transaction volume in multiple geographies, while Advisory fees remained relatively steady, as growth in North America offset lower contributions from Asia Pacific.
The decrease in Segment platform operating expenses was largely driven by lower variable incentive compensation expense as a result of the decrease in incentive fees.
The change in Adjusted EBITDA primarily reflected (i) the expected, lower incentive fees noted above, net of variable compensation costs and (ii) the absence of a prior-year $8.2 million benefit from the gain recognized in the second quarter of 2024 following the purchase of a controlling interest in a LaSalle-managed fund.
Investment Management reported equity earnings for the year, versus equity losses in the prior year, as property valuation adjustments stabilized and in some cases rose.
AUM decreased 3% in USD and local currency over the trailing twelve months. Changes in AUM are detailed in the table below (in billions):
Beginning balance (December 31, 2024)
Asset acquisitions/takeovers
Asset dispositions/withdrawals
Valuation changes
Foreign currency translation
Change in uncalled committed capital and cash held
Ending balance (December 31, 2025)
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Software and Technology Solutions
% Change
Year Ended December 31,
Change in
in Local
($ in millions)
U.S. dollars
Currency
Revenue
Platform compensation and benefits
Platform operating, administrative and other
Depreciation and amortization
Segment platform operating expenses
Gross contract costs
Segment operating expenses
Adjusted EBITDA
The increase in Software and Technology Solutions revenue reflected double-digit growth in software outpacing declines in technology solutions, the result of lower activity associated with large existing clients.
Segment platform operating expense growth was driven by increased revenue-related expenses and higher depreciation and amortization expense, largely associated with purchased and developed software. These drivers were partially offset by cost management actions.
The improvement in Adjusted EBITDA was driven by the increased revenue and cost management actions described above.
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LIQUIDITY AND CAPITAL RESOURCES
Cash Flows from Operating Activities
Operating activities provided $1,194.1 million of cash in 2025, compared with $785.3 million provided in 2024. Improved cash flow performance was primarily driven by (i) higher cash provided by earnings, (ii) the absence of cash outflow associated with a 2024 loan repurchased from Fannie Mae together with cash proceeds in 2025 from the sale of the repurchased loan's underlying asset, and (iii) lower cash taxes paid.
Cash Flows from Investing Activities
We used $336.6 million of cash for investing activities during 2025, compared with $316.8 million used in 2024. The increase in cash used for investing activities was primarily attributable to our $100.0 million contribution to JLL Income Property Trust ("JLL IPT"), an Investment Management core open-end flagship fund, in January 2025, and higher net capital additions, partially offset by lower cash paid for acquisitions. We discuss key drivers, along with other investing activities, individually below in further detail.
Cash Flows from Financing Activities
Financing activities used $643.2 million of cash during 2025, compared with $451.2 million used during 2024. The change was driven by higher share repurchases and incremental net reductions on short-term borrowings in 2025. We discuss these drivers in further detail below.
Debt
We maintain a commercial paper program (the "Program") in which we may issue up to $2.5 billion of short-term, unsecured and unsubordinated commercial paper notes at any time.
Our $3.3 billion Facility matures on November 3, 2028, and bears a variable interest rate. Outstanding borrowings, including the balance of the Facility, Short-term borrowings (financing lease obligations, overdrawn bank accounts and local overdraft facilities) and the balance outstanding under the Program are presented below.
December 31,
(in millions)
Outstanding borrowings under the Facility
Short-term borrowings
Outstanding commercial paper
In addition to our Facility, we had the capacity to borrow up to $58.6 million under local overdraft facilities as of December 31, 2025.
The following table provides additional information on our Facility, commercial paper, and our uncommitted credit agreement ("Uncommitted Facility"), which allows for discretionary short-term liquidity of up to $400.0 million, collectively.
Year Ended December 31,
($ in millions)
Average outstanding borrowings
Average effective interest rate
As of December 31, 2025, we had €350.0 million of Euro Notes, evenly divided between maturities of June 2027 (with a fixed interest rate of 1.96%) and June 2029 (with a fixed interest rate of 2.21%), and $400.0 million of Senior Notes due December 2028 with a fixed interest rate of 6.875%.
We will continue to use the Facility for working capital needs (including payment of accrued incentive compensation), co-investment activities, share repurchases, capital expenditures and acquisitions.
Refer to Note 9, Fair Value Measurements in the Notes to Consolidated Financial Statements, included in Item 8, for additional information on our debt.
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Investment Activity
As of December 31, 2025, we had a carrying value of $892.9 million in Investments, primarily related to Investment Management co-investments and investments in early to mid-stage proptech companies as well as proptech funds ("Proptech Investments"). In 2025 and 2024, funding of investments exceeded returns of capital by $111.1 million (which notably included $100.0 million invested in JLL IPT as described above) and $69.4 million, respectively. We have maximum potential unfunded commitments to direct investments or investment vehicles of $203.5 million and $7.3 million as of December 31, 2025 for our Investment Management business and Proptech Investments, respectively.
See Note 5, Investments, of the Notes to Consolidated Financial Statements, included in Item 8, for additional information on our investment activity.
Share Repurchase and Dividend Programs
As of December 31, 2025, $801.7 million remained authorized for repurchases under our repurchase program. The following table outlines share repurchase activity for the last two years.
Year Ended December 31,
Total number of shares repurchased (in thousands)
Total paid for shares repurchased (in millions)
Capital Expenditures
Net capital additions were $215.6 million and $185.5 million in 2025 and 2024, respectively. Expenditures in both years were primarily related to office leasehold improvements, hardware and purchased/developed software.
Business Acquisitions
The following table details cash payments relating to acquisitions. Payments for current-year acquisitions are included in cash used in investing activities, while payments for prior-year acquisitions are primarily reflected in cash used in financing activities.
Year Ended December 31,
(in millions)
Payments relating to current-year acquisitions
Payments for deferred business acquisition and earn-out obligations
Total paid for business acquisitions
Terms for our acquisitions have typically included cash paid at closing with provisions for additional consideration and earn-out payments subject to certain contract provisions and performance. Deferred business acquisition obligations totaled $21.3 million and $20.8 million on the Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively. These obligations represent the current discounted values of payments to sellers of businesses for which our acquisition has closed as of the balance sheet dates and for which the only remaining condition on those payments is the passage of time. As of December 31, 2025, we had the potential to make earn-out payments on 11 acquisitions subject to the achievement of certain performance conditions, representing $17.2 million accrued for potential earn-out payments, of a potential maximum of $75.5 million (undiscounted). These earn-outs will come due at various times over the next five years, assuming the achievement of the applicable performance conditions.
We will continue to consider acquisitions we believe will strengthen our market position, increase our profitability and supplement our organic growth.
Refer to Note 4, Business Combinations, Goodwill and Other Intangible Assets, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on business acquisitions.
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Repatriation of Foreign Earnings
Based on our historical experience and future business plans, we do not expect to repatriate our foreign source earnings to the U.S. We believe our policy of permanently reinvesting earnings of foreign subsidiaries does not significantly impact our liquidity. As of December 31, 2025 and 2024, we had total cash and cash equivalents of $599.1 million and $416.3 million, respectively, of which $386.0 million and $314.4 million, respectively, was held by our foreign subsidiaries.
Leases
Our lease obligations primarily consist of operating leases of office space in various buildings for our own use as well as operating leases for equipment. The total minimum rentals to be received in the future as sublessor under noncancelable operating subleases as of December 31, 2025 was $27.9 million.
Refer to Note 11, Leases, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on our lease obligations.
Deferred Compensation
Deferred compensation obligations are inclusive of amounts attributable to service conditions satisfied as of December 31, 2025, as well as service conditions expected to be satisfied in future periods. We invest directly in insurance contracts which yield returns to fund these deferred compensation obligations. These plans allow employees and members of our Board of Directors to defer portions of their compensation, and plan balances predominantly relate to U.S. employees. We recognize an asset for the amount that could be realized under these insurance contracts at the balance sheet date, and the deferred compensation obligation is adjusted to reflect the changes in the fair value of the amount owed to the employees. The timing of payments to employees is, in part, dependent on their employment with JLL and, therefore, cannot be determined with precision.
Refer to the Consolidated Balance Sheets, of the Consolidated Financial Statements, and Note 9, Fair Value Measurements, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on our deferred compensation.
Defined Benefit Plans
The defined benefit plan obligations represent estimates of the expected benefits to be paid out by our defined benefit plans. We will fund these obligations from the assets held by these plans. If the assets these plans hold are not sufficient to fund these payments, JLL will fund the remaining obligations. We have historically funded pension costs as actuarially determined and as applicable laws and regulations require. We expect to make immaterial contributions to our defined benefit pension plans in 2026. As payments to recipients are based on their retirement date, age and other factors, we cannot determine the timing of such payments with precision.
Refer to Note 7, Retirement Plans, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on our defined benefit plans.
