Business Management Corporate Profiles
Sept 16, 2007
By: Paul Rosta, Senior Associate Editor
In the wake of the consolidations that have rolled through the real estate services industry during the past year, many industry-watchers have been waiting for Jones Lang LaSalle Inc. to make a splashy deal of its own. They may wait in vain. Though the firm’s name has popped up in the rumor mill from time to time, it is taking a different tack from global competitors like Cushman & Wakefield Inc. and CB Richard Ellis Inc. Despite its own historical formation—today’s firm resulted from the megamerger of LaSalle Partners and Jones Lang Wootton—the 25,500-plus-employee firm is pursuing a steady series of smaller additions to its stable. “We are and will continue to be a consolidator,” said Jones Lang LaSalle president & CEO Colin Dyer.
Indeed, the firm has been a busy consolidator during the past 18 months or so, acquiring more than a dozen small and medium firms around the world. On Sept. 7, the firm announced that it had acquired Camilli Veiel GmbH, a Stuttgart, Germany-based leasing and investment firm that will join Jones Lang LaSalle’s offices in Berlin, Dusseldorf, Frankfurt, Hamburg, Munich and Wiesbaden. Other additions this year include KHK Group, a British project and development services concern; Troostwijk Makelaars O.G., an independent Dutch advisory group; and Trammell Crow Co.’s former Indian affiliate, now known as Jones Lang LaSalle Meghraj. Back in the United States, Jones Lang LaSalle has completed the integration of Spaulding & Slye, the venerable multi-service firm that it acquired last year to increase its presence in Boston and Washington, D.C. “Our strategy is not about being the biggest. It’s about being the best,” stated Peter Roberts, CEO of the Americas. Roberts declined to speculate on what kinds of acquisitions the firm might make next but declared, “We won’t do so at the expense of our employees, our culture or our clients’ best interests.”
So far, the company’s strategy seems to be serving it well. Since 2002, global revenues have more than doubled, from $860 million to just over $2 billion last year. Global revenue for the first half of 2007 hit $1.2 billion, an increase of 38 percent from the same period in 2006. And all the company’s regions showed strength. Revenue for Europe, the Middle East and Asia, for example, hit $374 million, a 56 percent jump above the identical period last year. In the Americas, the company’s first-half revenues grew 32 percent to $327 million compared with the same period in 2006.
For the rest of the decade, Jones Lang LaSalle is aiming for more of the same. The firm has not disclosed specifics, but its executives say privately that the company has set internal goals of similarly aggressive growth for the next several years. The company has also set a goal of ranking among the top three firms in every business line and in every market where it hangs its shingle globally.
Worldview
Jones Lang LaSalle is also increasing its presence in the global investment market, where it manages some $47 billion in assets through LaSalle Investment Management Inc. Its direct investments break out to $18.3 billion in Europe, $14 billion in the United States and $4.7 billion in Asia. The division has another $10 billion in securities under management. Asia, in particular, offers significant growth opportunities, noted its CEO, Jeff Jacobson. LaSalle Investment Management is closing a $3 billion Asian opportunity fund, following previous funds valued at $250 million and $1 billion. With partner PRUPIM, the investment affiliate of United Kingdom-based Prudential Plc, LaSalle Investment is operating an open-ended fund that will invest in assets in the Asia-Pacific region. Announced in July, the fund is expected to reach $1 billion in value this year.
In the United States, the company is challenging other leaders like Cushman & Wakefield and CB Richard Ellis by ramping up its presence in high-profile, fiercely contested markets like New York City and Washington, D.C. Creating a powerful presence in the New York City metropolitan area is a top priority primarily because of the market’s high stakes and high profile, noted Peter Riguardi, who joined Jones Lang LaSalle as head of its New York City area operations five years ago this month. His mission is to guide the firm’s growth in a market that he describes as tough, sophisticated and ruthless. Relentless drive is essential to success in such an environment, he said. He quoted one of auto racing champion Mario Andretti’s rules of success: “If you’re comfortable driving, you’re not driving fast enough.” Noted Riguardi: “We don’t want our people to ever feel comfortable.”
That ambition has pushed Jones Lang LaSalle into New York City’s top tier of firms in multiple service areas. On Riguardi’s watch, the firm has landed such plum assignments as project management for the $1 billion Bank of America Tower in Midtown Manhattan, a 2.2 million-square-foot, 54-story green tower scheduled for completion next year. The company represented MetLife Inc. last year in its 410,000-square-foot headquarters lease at 1095 Ave. of the Americas, a newly renovated office tower in Midtown Manhattan. Riguardi’s office is also providing landlord representation services for the building. And the firm is advising Merrill Lynch & Co. on site selection for its soon-to-be-announced Manhattan headquarters.
Jones Lang LaSalle is taking a shorter route to expansion in two other major markets on the East Coast: Boston and Washington, D.C. Last year, the firm completed its acquisition of the venerable Boston-based firm Spaulding & Slye. The perception that both corporate cultures were entrepreneurial, nimble and collaborative gave Spaulding & Slye alumni confidence in the merger, according to former Spaulding & Slye president David McGarry, who now holds the title of international director for Jones Lang LaSalle. With the addition of Spaulding & Slye to the stable, Jones Lang LaSalle’s revenue in Boston is up about 15 percent over 2006 levels so far this year, an improvement bolstered by a strong market. This summer, its Boston office represented Tedeschi Realty Corp. in its $377 million sale of 25 Massachusetts shopping centers to Dividend Capital Total Realty Trust.
Ties that Bind
Another path to growing revenues is to build on the ties Jones Lang LaSalle has long cultivated with its multinational corporate clients. That was the route the firm took when providing a wide range of services to the appliance manufacturer Whirlpool Corp. The relationship started about eight years ago, when Jones Lang LaSalle began providing leasing and investment sales services for North America, explained Lee Utke, director of global corporate real estate services for Whirlpool. Next, the real estate company expanded those services to the client’s European division. Now, a 50-member Jones Lang LaSalle team supplies project development, facilities management and project management to Whirlpool in all four of the home appliance company’s global regions.
Jones Lang LaSalle’s most challenging assignment for Whirlpool followed the client’s acquisition of Maytag Corp. in 2006. The team was tasked with quickly assessing and then disposing of Maytag’s 20 million-square-foot portfolio, most of it located in North America. “They brought local knowledge and they brought the arms and legs,” Utke said. Further complicating the job, the Department of Justice, citing antitrust laws, would not permit due diligence before the acquisition closed. Starting from scratch, the team disposed of the portfolio in only nine months.
For another major global client, Motorola Inc., Jones Lang LaSalle has been tasked with pulling together a team of its best and brightest, according to Bob Bovee, director of global strategy for the communications product giant. “Far and away, what they’ve brought to the partnership and relationship, particularly of late, is what I’ll call ‘best-in-class practices,’” Bovee said. “They have … brought to the relationship the absolute best people.” Veteran Jones Lang LaSalle executive Vivian Mumaw took on the challenge when she assumed leadership of her company’s 325-person group dedicated to serving Motorola. She drew on her extensive connections within the real estate company and her political savvy to pull in reinforcements from elsewhere in the firm.
Among the most important tasks for Jones Lang LaSalle’s Motorola group is responding to tighter margins in the cell phone business by engineering cost savings. Steps range from assigning shared workspace to employees who need no specific space to limiting the scope of cleaning services, Bovee said. Since 2002, the company has identified cumulative savings that now amount to 18 to 20 percent annually, Bovee estimated.
New Horizons
Jones Lang LaSalle executives also plan to target global corporate services as a means of achieving the firm’s next revenue goal, anticipating plenty of untapped potential from the field’s exponential growth during the past four years. Recently, the firm has either won new contracts or expanded scope with major clients that include not only Motorola but also Sun Microsystems Inc. and Unisys. So far this year, it has won 70 percent of the corporate outsourcing assignments that it has competed for worldwide, Roberts estimated.
European-based multinational companies offer particular potential for corporate outsourcing. Those firms have historically been slow to embrace outsourcing, preferring to keep those services in house, noted John Phillips, chairman of the firm’s corporate solutions business. But that appears to be changing as those companies seek out new ways to achieve efficiency and cost savings. European financial services firms like Deutsche Bank AG and HSBC have led the way in pioneering corporate outsourcing services, and Jones Lang LaSalle expects more of the same. “This trend that we’ve seen grow from its infancy is just now gathering steam,” said Stuart Hicks, CEO of the corporate solutions unit.
In the United States, the company expects to make a lot more noise in several business areas. The capital markets group, for example, has added several big guns, including Jones Lang Wootton alumnus Jack Minter, who most recently worked for Trammell Crow Co. Meanwhile, the industrial capital markets group typically handles between $1 billion and $1.5 billion worth of transactions annually, estimated Earl Webb, CEO of the capital markets group. But those transactions are largely a fringe benefit of the company’s third-party corporate services relationships with Fortune 500 clients. By expanding its dedicated industrial team in such key markets as Dallas, Atlanta, Chicago and Southern California, the capital markets group plans to challenge such industrial market leaders as CB Richard Ellis, Eastdil Secured L.L.C., Cushman & Wakefield and Grubb & Ellis Co. “A year from now, we will look very different from how we look today,” Webb predicted.
He is also eyeing rapid expansion in the multi-family arena, for which the company had little appetite until recently. “We were ignoring one major component of the business for many, many years that we should never have ignored,” he explained. Multi-family investment is a must, in part because of its broad appeal to institutional investors and the resulting increased opportunity to connect with that client base, he noted. Webb also intends for Jones Lang LaSalle to rank with multi-family investment leaders like Cushman & Wakefield, CB Richard Ellis and Eastdil Secured. “In three years, we expect to be there,” he said. “We’ll be disappointed if we’re not.”
And as an instrument of its growth strategy, Jones Lang LaSalle is enhancing its global research network. This month, Charles Doyle is joining the firm as global marketing officer. He will oversee research efforts that include Jones Lang LaSalle’s widely circulated reports on international investment and market transparency. Dyer explained that the firm invests in leadership because it adds value to client relationships. “(It allows) them to understand what’s happening before it happens,” he said.
Meeting that goal, it seems, sums up the challenge that faces Jones Lang LaSalle, as well as its competitors, in a market that will only continue to globalize.
Talent Wars
As they push toward their goal of doubling revenue by 2010, Jones Lang LaSalle Inc.’s leaders often use military terms to describe their toughest challenge. “One thing that is always on our minds is the increasing war for talent,” said Peter Roberts, CEO of the Americas. “With the pace of activity and growth in the real estate space, we are hungry for talented people.”
The company has already achieved considerable success in the recruitment wars—it has added about 200 leasing professionals to its U.S. operations during the past year or so—but its leaders are constantly looking for an edge. One such advantage, they contend, is the firm’s growing employee-friendly reputation. “That kind of environment allows you to attract top talent,” said CEO of North American markets Bill Krouch, who oversees such services as tenant and landlord representation, property management and project management in the United States.
For that reason, executives like to talk about Jones Lang LaSalle’s selection this year by Fortune magazine as one of the 100 best U.S. companies to work for. The firm ranked 66th overall based on such factors as compensation, its 26 percent job growth from 2005 to 2006 and diversity.
Fortune also singled out the firm for the accessibility of its executives. To enhance that open-door atmosphere, many office walls came down during a recent renovation of the firm’s Chicago headquarters. Roberts contended that this revamping has generated intangible but unmistakable benefits: increased energy, connectivity and community.
Jones Lang LaSalle is also focusing on diversity. All told, the U.S. organization’s pool of employees is about 37 percent female and 6 percent minority. That reflects industry norms, but diversity has significance beyond numbers for Jones Lang LaSalle, explained chief diversity officer Cedric Thurman. Benefits of a consulting team made up of people with a variety of backgrounds certainly include a greater comfort level for ethnically diverse clients. In addition, Jones Lang LaSalle’s own findings support research that indicates that diverse teams generally develop better solutions than do those composed of people from homogenous backgrounds.
By: Paul Rosta, Senior Associate Editor
In the wake of the consolidations that have rolled through the real estate services industry during the past year, many industry-watchers have been waiting for Jones Lang LaSalle Inc. to make a splashy deal of its own. They may wait in vain. Though the firm’s name has popped up in the rumor mill from time to time, it is taking a different tack from global competitors like Cushman & Wakefield Inc. and CB Richard Ellis Inc. Despite its own historical formation—today’s firm resulted from the megamerger of LaSalle Partners and Jones Lang Wootton—the 25,500-plus-employee firm is pursuing a steady series of smaller additions to its stable. “We are and will continue to be a consolidator,” said Jones Lang LaSalle president & CEO Colin Dyer.
Indeed, the firm has been a busy consolidator during the past 18 months or so, acquiring more than a dozen small and medium firms around the world. On Sept. 7, the firm announced that it had acquired Camilli Veiel GmbH, a Stuttgart, Germany-based leasing and investment firm that will join Jones Lang LaSalle’s offices in Berlin, Dusseldorf, Frankfurt, Hamburg, Munich and Wiesbaden. Other additions this year include KHK Group, a British project and development services concern; Troostwijk Makelaars O.G., an independent Dutch advisory group; and Trammell Crow Co.’s former Indian affiliate, now known as Jones Lang LaSalle Meghraj. Back in the United States, Jones Lang LaSalle has completed the integration of Spaulding & Slye, the venerable multi-service firm that it acquired last year to increase its presence in Boston and Washington, D.C. “Our strategy is not about being the biggest. It’s about being the best,” stated Peter Roberts, CEO of the Americas. Roberts declined to speculate on what kinds of acquisitions the firm might make next but declared, “We won’t do so at the expense of our employees, our culture or our clients’ best interests.”
So far, the company’s strategy seems to be serving it well. Since 2002, global revenues have more than doubled, from $860 million to just over $2 billion last year. Global revenue for the first half of 2007 hit $1.2 billion, an increase of 38 percent from the same period in 2006. And all the company’s regions showed strength. Revenue for Europe, the Middle East and Asia, for example, hit $374 million, a 56 percent jump above the identical period last year. In the Americas, the company’s first-half revenues grew 32 percent to $327 million compared with the same period in 2006.
For the rest of the decade, Jones Lang LaSalle is aiming for more of the same. The firm has not disclosed specifics, but its executives say privately that the company has set internal goals of similarly aggressive growth for the next several years. The company has also set a goal of ranking among the top three firms in every business line and in every market where it hangs its shingle globally.
Worldview
Jones Lang LaSalle is also increasing its presence in the global investment market, where it manages some $47 billion in assets through LaSalle Investment Management Inc. Its direct investments break out to $18.3 billion in Europe, $14 billion in the United States and $4.7 billion in Asia. The division has another $10 billion in securities under management. Asia, in particular, offers significant growth opportunities, noted its CEO, Jeff Jacobson. LaSalle Investment Management is closing a $3 billion Asian opportunity fund, following previous funds valued at $250 million and $1 billion. With partner PRUPIM, the investment affiliate of United Kingdom-based Prudential Plc, LaSalle Investment is operating an open-ended fund that will invest in assets in the Asia-Pacific region. Announced in July, the fund is expected to reach $1 billion in value this year.
In the United States, the company is challenging other leaders like Cushman & Wakefield and CB Richard Ellis by ramping up its presence in high-profile, fiercely contested markets like New York City and Washington, D.C. Creating a powerful presence in the New York City metropolitan area is a top priority primarily because of the market’s high stakes and high profile, noted Peter Riguardi, who joined Jones Lang LaSalle as head of its New York City area operations five years ago this month. His mission is to guide the firm’s growth in a market that he describes as tough, sophisticated and ruthless. Relentless drive is essential to success in such an environment, he said. He quoted one of auto racing champion Mario Andretti’s rules of success: “If you’re comfortable driving, you’re not driving fast enough.” Noted Riguardi: “We don’t want our people to ever feel comfortable.”
That ambition has pushed Jones Lang LaSalle into New York City’s top tier of firms in multiple service areas. On Riguardi’s watch, the firm has landed such plum assignments as project management for the $1 billion Bank of America Tower in Midtown Manhattan, a 2.2 million-square-foot, 54-story green tower scheduled for completion next year. The company represented MetLife Inc. last year in its 410,000-square-foot headquarters lease at 1095 Ave. of the Americas, a newly renovated office tower in Midtown Manhattan. Riguardi’s office is also providing landlord representation services for the building. And the firm is advising Merrill Lynch & Co. on site selection for its soon-to-be-announced Manhattan headquarters.
Jones Lang LaSalle is taking a shorter route to expansion in two other major markets on the East Coast: Boston and Washington, D.C. Last year, the firm completed its acquisition of the venerable Boston-based firm Spaulding & Slye. The perception that both corporate cultures were entrepreneurial, nimble and collaborative gave Spaulding & Slye alumni confidence in the merger, according to former Spaulding & Slye president David McGarry, who now holds the title of international director for Jones Lang LaSalle. With the addition of Spaulding & Slye to the stable, Jones Lang LaSalle’s revenue in Boston is up about 15 percent over 2006 levels so far this year, an improvement bolstered by a strong market. This summer, its Boston office represented Tedeschi Realty Corp. in its $377 million sale of 25 Massachusetts shopping centers to Dividend Capital Total Realty Trust.
Ties that Bind
Another path to growing revenues is to build on the ties Jones Lang LaSalle has long cultivated with its multinational corporate clients. That was the route the firm took when providing a wide range of services to the appliance manufacturer Whirlpool Corp. The relationship started about eight years ago, when Jones Lang LaSalle began providing leasing and investment sales services for North America, explained Lee Utke, director of global corporate real estate services for Whirlpool. Next, the real estate company expanded those services to the client’s European division. Now, a 50-member Jones Lang LaSalle team supplies project development, facilities management and project management to Whirlpool in all four of the home appliance company’s global regions.
Jones Lang LaSalle’s most challenging assignment for Whirlpool followed the client’s acquisition of Maytag Corp. in 2006. The team was tasked with quickly assessing and then disposing of Maytag’s 20 million-square-foot portfolio, most of it located in North America. “They brought local knowledge and they brought the arms and legs,” Utke said. Further complicating the job, the Department of Justice, citing antitrust laws, would not permit due diligence before the acquisition closed. Starting from scratch, the team disposed of the portfolio in only nine months.
For another major global client, Motorola Inc., Jones Lang LaSalle has been tasked with pulling together a team of its best and brightest, according to Bob Bovee, director of global strategy for the communications product giant. “Far and away, what they’ve brought to the partnership and relationship, particularly of late, is what I’ll call ‘best-in-class practices,’” Bovee said. “They have … brought to the relationship the absolute best people.” Veteran Jones Lang LaSalle executive Vivian Mumaw took on the challenge when she assumed leadership of her company’s 325-person group dedicated to serving Motorola. She drew on her extensive connections within the real estate company and her political savvy to pull in reinforcements from elsewhere in the firm.
Among the most important tasks for Jones Lang LaSalle’s Motorola group is responding to tighter margins in the cell phone business by engineering cost savings. Steps range from assigning shared workspace to employees who need no specific space to limiting the scope of cleaning services, Bovee said. Since 2002, the company has identified cumulative savings that now amount to 18 to 20 percent annually, Bovee estimated.
New Horizons
Jones Lang LaSalle executives also plan to target global corporate services as a means of achieving the firm’s next revenue goal, anticipating plenty of untapped potential from the field’s exponential growth during the past four years. Recently, the firm has either won new contracts or expanded scope with major clients that include not only Motorola but also Sun Microsystems Inc. and Unisys. So far this year, it has won 70 percent of the corporate outsourcing assignments that it has competed for worldwide, Roberts estimated.
European-based multinational companies offer particular potential for corporate outsourcing. Those firms have historically been slow to embrace outsourcing, preferring to keep those services in house, noted John Phillips, chairman of the firm’s corporate solutions business. But that appears to be changing as those companies seek out new ways to achieve efficiency and cost savings. European financial services firms like Deutsche Bank AG and HSBC have led the way in pioneering corporate outsourcing services, and Jones Lang LaSalle expects more of the same. “This trend that we’ve seen grow from its infancy is just now gathering steam,” said Stuart Hicks, CEO of the corporate solutions unit.
In the United States, the company expects to make a lot more noise in several business areas. The capital markets group, for example, has added several big guns, including Jones Lang Wootton alumnus Jack Minter, who most recently worked for Trammell Crow Co. Meanwhile, the industrial capital markets group typically handles between $1 billion and $1.5 billion worth of transactions annually, estimated Earl Webb, CEO of the capital markets group. But those transactions are largely a fringe benefit of the company’s third-party corporate services relationships with Fortune 500 clients. By expanding its dedicated industrial team in such key markets as Dallas, Atlanta, Chicago and Southern California, the capital markets group plans to challenge such industrial market leaders as CB Richard Ellis, Eastdil Secured L.L.C., Cushman & Wakefield and Grubb & Ellis Co. “A year from now, we will look very different from how we look today,” Webb predicted.
He is also eyeing rapid expansion in the multi-family arena, for which the company had little appetite until recently. “We were ignoring one major component of the business for many, many years that we should never have ignored,” he explained. Multi-family investment is a must, in part because of its broad appeal to institutional investors and the resulting increased opportunity to connect with that client base, he noted. Webb also intends for Jones Lang LaSalle to rank with multi-family investment leaders like Cushman & Wakefield, CB Richard Ellis and Eastdil Secured. “In three years, we expect to be there,” he said. “We’ll be disappointed if we’re not.”
And as an instrument of its growth strategy, Jones Lang LaSalle is enhancing its global research network. This month, Charles Doyle is joining the firm as global marketing officer. He will oversee research efforts that include Jones Lang LaSalle’s widely circulated reports on international investment and market transparency. Dyer explained that the firm invests in leadership because it adds value to client relationships. “(It allows) them to understand what’s happening before it happens,” he said.
Meeting that goal, it seems, sums up the challenge that faces Jones Lang LaSalle, as well as its competitors, in a market that will only continue to globalize.
Talent Wars
As they push toward their goal of doubling revenue by 2010, Jones Lang LaSalle Inc.’s leaders often use military terms to describe their toughest challenge. “One thing that is always on our minds is the increasing war for talent,” said Peter Roberts, CEO of the Americas. “With the pace of activity and growth in the real estate space, we are hungry for talented people.”
The company has already achieved considerable success in the recruitment wars—it has added about 200 leasing professionals to its U.S. operations during the past year or so—but its leaders are constantly looking for an edge. One such advantage, they contend, is the firm’s growing employee-friendly reputation. “That kind of environment allows you to attract top talent,” said CEO of North American markets Bill Krouch, who oversees such services as tenant and landlord representation, property management and project management in the United States.
For that reason, executives like to talk about Jones Lang LaSalle’s selection this year by Fortune magazine as one of the 100 best U.S. companies to work for. The firm ranked 66th overall based on such factors as compensation, its 26 percent job growth from 2005 to 2006 and diversity.
Fortune also singled out the firm for the accessibility of its executives. To enhance that open-door atmosphere, many office walls came down during a recent renovation of the firm’s Chicago headquarters. Roberts contended that this revamping has generated intangible but unmistakable benefits: increased energy, connectivity and community.
Jones Lang LaSalle is also focusing on diversity. All told, the U.S. organization’s pool of employees is about 37 percent female and 6 percent minority. That reflects industry norms, but diversity has significance beyond numbers for Jones Lang LaSalle, explained chief diversity officer Cedric Thurman. Benefits of a consulting team made up of people with a variety of backgrounds certainly include a greater comfort level for ethnically diverse clients. In addition, Jones Lang LaSalle’s own findings support research that indicates that diverse teams generally develop better solutions than do those composed of people from homogenous backgrounds.
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