Jones Lang LaSalle Incorporated

Good morning or good afternoon all and welcome to the Q2 2022 JLL earnings conference call. My name is Adam and I'll be your operator today. If you'd like to ask a question during the Q&A portion of today's call, you may do so by pressing star one on your telephone keypad. I will now hand the call over to Scott Einberger to begin. So Scott, please go ahead when you are ready.

Thank you and good morning. Welcome to the second quarter 2022 conference call for Jones Lang LaSalle Incorporated. Earlier this morning, we issued our earnings release, which is available on the investor relations section of our website, along with the slide presentation intended to supplement our prepared remarks. Please visit ir.jll.com. During the call and in our slide presentation, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures to GAAP in our earnings release and slide presentation. As a reminder, today's call is being webcast live and recorded. A transcript of this conference call will also be posted on our website. Any statements made about future results and performance, plans, expectations, and objectives are forward-looking statements. Actual results and performance may differ from those forward-looking statements as a result of factors discussed in the annual report on Form 10-K for the fiscal year ended December 31st, 2021, and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statement. I will now turn the call over to Christian Ulbricht our President and Chief Executive Officer, for opening remarks.

Thank you, Scott. Hello, and thank you all for joining our second quarter earnings call. This morning, JLL reported financial results for the second quarter that highlight the strength and resiliency of our business. Double-digit fee revenue growth was led by our markets advisory, capital markets, and work dynamics business segments our one jll philosophy continues to drive strong growth across our business lines and is central to how we deliver best-in-class service to our clients i would like to thank the over 100 000 jll employees for their dedication in a complex operating environment relentlessly impressing our clients with outstanding services Turning to the current market environment, capital markets activity in the second quarter proved resilient in the face of rising interest rates and inflationary pressures. Global investment totaled $281 million, up 2% for the quarter and 19% year to date. The Americas outperformed with volumes up 23% for the quarter. Performance across Europe and Asia Pacific has been mixed as geopolitical challenges and COVID lockdowns impact different parts of the world. Debt markets remain liquid and our JLL research team estimates there's approximately 380 billion US dollars of available capital yet to be deployed globally in the commercial real estate space. Markets are fluid as B2R spreads have widened and price adjustments occur across asset classes. Investors are undertaking greater price discovery and, in some cases, extending the timeline to close deals. This presents the greatest risk to the second half of the year as the timing of deal closures can fluctuate. Taking a look at different asset classes. Industrial and multifamily have slowed slightly from what were historically elevated levels. In multifamily, investors are factoring in lower rental growth rates as the outlook for future inflation moderates. In addition, underwriting standards are becoming more restrictive as lenders adjust to a higher interest rate environment. Retail and hotels performed well in the second quarter, as these asset classes continue their recovery from pandemic level lows. As restrictions ease, consumers are spending more on services and travel, which has supported the growth of both the retail and hotel sectors. On the leasing side, global volumes across all asset types was up 20% year over year in the second quarter. U.S. office leasing activity for the second quarter was in line with the first quarter as occupiers become more cautious amid the macroeconomic uncertainty. The flight to quality is unabated as companies look to upgrade their space in an effort to attract employees back to the office. This has resulted in the average lease term remaining flat at just over eight years. In the industrial market, demand continues to outpace supply, causing rents to remain elevated and vacancy rates to stay under 2% in many markets around the globe. In some markets, the lack of available quality space has led to a softening in demand as companies are forced to evaluate their longer-term industrial needs. In Asia-Pacific, leasing volumes vary by geography. Activity in Australia and Singapore showed strength, while lockdowns in China limited transaction volumes. On average, office re-entry in Asia-Pacific is ahead of other regions, voting well for future leasing activity in the region. In Europe, sentiment is mixed with geopolitical and economic growth concerns weighing on the number of leasing inquiries in certain markets. Best-in-class assets continue to perform well with rising rental rates and increased levels of competition for space. Let's now shift our attention to JLL's performance for the quarter. Second quarter revenue rose 21% to $5.3 billion, and fee revenue increased 23% to $2.1 billion in local currency. nearly all of which was organic. Fee revenue growth was led by our markets advisory in capital markets businesses. Adjusted EBITDA for the quarter was US$359 million, an increase of 10% from the prior year, and our adjusted EBITDA margin was 16.5% in local currency. Adjusted net income totaled US$222 million for the quarter, and adjusted diluted earnings per share were $4.48 US dollars, an increase of 9% from the prior year. Our capital allocation strategy remains unchanged. We will first reinvest in the business to drive future growth, both organically and through select M&A, while also returning capital to shareholders. During the second quarter, we were opportunistic with our share repurchase program returning close to $300 million to shareholders. This represents an increase in repurchase activity versus prior quarters as we weigh all investment opportunities against our return hurdles. We will continue to be disciplined in our approach to capital allocation, utilizing the strength of our balance sheet and the meaningful amount of cash that our business generates to balance investing in the business and returning cash to shareholders. I will now turn the call over to Karen, who will provide further detail on our results for the quarter.