Jones Lang LaSalle 2Q14 Earnings Call Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Office leasing continues to strengthen

“I mentioned earlier that business confidence is showing solid improvement across the world. This is reflected in office leasing, which further strengthens globally. ”

Rents growing, no reason it wont continue

“rental rates are now growing in almost all markets, internationally, which is further encouragement for corporate rental activity. We currently seeing no business reasons why these positive market trends, which I’ve covered, should not continue for the balance of this year at least.”

Investment clients continue to move out along the risk spectrum

“nvestors are continuing to increase the allocations to real estate and to move further out along the risk in pursuit of attractive returns.”

Extreme disappointment from under-bidders

“the capital markets demand levels seem to be high and sustained, and we see no sign of any reduction in demand. We’re seeing a multiple bid summon any transactions which we put out. We’re seeing extreme disappointment on the part of under bidders, which sort of makes them more determined to go out again.”

INternational $ back in real estate markets

“f you put that strong equity demand together with the increasing levels of international capital flow, we’re seeing those rising up to the same level, as we saw in the last cycle”

Banks all feel much healthier

“You put that together, in turn, with the ever-improving levels of debt availability as banks improve their balance sheets globally, as they get more confident and, indeed, as competition amongst them to put money out increases and that brings spread in and solutions”

People thinking about expanding again

“The world we are seeing amongst our clients is the willingness to gradually move away from the phase of total concentration on cost to a phase where they’re actually thinking about building and expanding and driving revenues again.”

As long as rates rise steadily, it wont have an effect on the market

” our best guesstimate is that as long as rate increases are steady and moderate and the market is not surprised that there won’t be any significant pullback on capital market.”

Debt more available

“It’s just simply that the availability of debt is just getting easier. It’s again a cyclical thing”

“We’ve seen banks make more debt available at lower spreads. So spreads coming in from over the last 12 months, for example, from 250 to 125 basis points or lower, and we’ve seen them loosen the covenant in terms of around the loans they are giving. So putting it all together, and there is adequate debt — more than adequate debt available within the U.S. market. The same comments would apply to Europe but more — the presence has been slower. But that is now pretty freely available for well-underwritten transactions. In Asia Pacific, you can have a great debt problem, the banks were very robust throughout the crisis and came out strongly. So that is sort of world deal for the situation.”