| Jones Lang LaSalle lands more international contracts as companies streamline property management providers. |
By Steve Webb
Property management assignments are getting bigger these days, and they're taking on more of an international flavor. Take two of the major deals Chicago-based Jones Lang LaSalle won in the past six months. In late January, the company signed a contract to manage 16 million sq. ft. of space for Rockwell Automation, an industrial products company, in 40 different countries. Earlier that month, software giant Microsoft Corp. picked the company to manage 8 million sq. ft. of property, which includes offices in Africa and the Middle East.
"It substantiates our belief in the trend toward global, seamless outsourcing of management services for corporations," says Earl Webb, CEO of Jones Lang LaSalle, Americas. "Companies are looking for ways to streamline real estate operations. They want the same level of service whether they're doing business in the U.S., South America, Europe or Asia."
The company's ability to garner huge assignments -- both nationally and internationally -- has helped it retain its No. 1 spot on NREI's Top Property Managers survey, with 700 million sq. ft. of space under management in 2001. Dallas-based Trammel Crow Co. ranks No. 2 with 635 million sq. ft. of space.
In today's difficult economic environment, property managers are under more pressure to cut costs and enhance property values for their clients. "We're constantly bringing them new ideas on how to extract monetary value out of their assets and how to streamline their occupancy," notes Webb.
In addition to showing its clients how to reduce the amount of office and other space they use, Jones Lang LaSalle is working to decrease its own operating costs by cutting back on its space needs.
"We are trying our best to reduce our cost of occupancy in various markets around the world by using our space intelligently," he says. "We want to practice what we preach."
The shaky economy is posing a challenge for Jones Lang LaSalle. In the first quarter of this year, revenues were $161.8 million, a decrease from $198.8 million one year ago. As of June 19, the company's stock price was $22.90, down from a 52-week high of $24.20. It's 52-week low was $12.50.
Despite the decline in revenues, Webb says the company has been able to maintain its profit level by restructuring its business, which included layoffs of about 750 employees, or 10% of its global workforce.
"We feel very comfortable that we've got a business model that can thrive in a stable market and really thrive in a growth market," Webb says. "We've cut our costs in order to allow us to be very financially stable in the difficult economic climate we're in. Yet we've got a platform that we can build on very rapidly when the economy starts to turn around."
In its effort to boost revenues, the company will focus on expanding its business both in the U.S. and overseas. "We are really focused now on gaining further momentum here in the U.S. in the key business center markets, as well as in the key money center markets around the world because that's where our clients are going."