JLL recorded strong third-quarter earnings, driven primarily by an uptick in leasing activity, with major wins in the office sector.

The brokerage reported an increase in revenue to $5.9B, up 15% year-over-year. Leasing revenue within the firm's markets advisory team increased 21%, with broad-based geographic and asset class growth led by U.S. office.

The office sector saw increased deal size and transaction volume and had 34% growth, JLL Chief Financial Officer Karen Brennan said on the earnings call.

“We still are seeing a focus on the highest quality office assets, and that's a trend that has really persisted over the last several quarters,” Brennan said. “One notable thing that we're continuing to see is the increase of larger transaction sizes overall.”

Overall U.S. office leases of more than 100K SF are still below prepandemic historical averages by about 50%, though JLL did see a 45% uptick in those transactions in Q3, Brennan said.

The company has seen other signs of confidence from tenants in the marketplace, she added.

“In the U.S,, the availability rate has decreased for the first time since the pandemic,” Brennan said. “We find that to be really notable and encouraging.”

JLL CEO Christian Ulbrich said the capital market environment had improved significantly over the last couple of months, and it hasn't paused yet in the face of the 10-year Treasury yield ticking up in the past couple of weeks. Ulbrich said he didn't expect to see a flood of new deals, but there will be a seasonal uptick in activity in the fourth quarter and continuous improvement to the market environment in 2025.

JLL raised its full-year guidance three weeks ago, citing rebounding transaction, leasing and capital markets activity among the reasons.

But the brokerage is projecting for a range of outcomes for how the company will finish out the year, Brennan said. The midpoint of its forecast is based on its transaction business pipelines, which reflects typical seasonality in capital markets, slightly suppressed seasonality in leasing and a continuation of the trends that the company has seen in its resilient business lines, she said.

The low end of JLL's range would reflect a slowdown in transaction activity from what it is experiencing to date, and could result from many macroeconomic, geopolitical or interest rate risks that manifest in the market in the coming weeks, Brennan said.

JLL's high end would see a more meaningful pickup in transaction activity, most notably in leasing, she said.

Brennan said she expects to see more positive trends as companies choose to require a return to office.

“Some of what we expect to see is continued RTO impacts,” Brennan said. “For the Fortune 100 companies, the average return to office requirements have increased from a year ago at 2.2 days per week to 3.3 days per week. And so we expect to see some more positive momentum there as well.”

JLL's results beat analysts' expectations, with earnings per share ringing in at $3.50 versus the consensus estimate of $2.66. Even so, its stock tumbled, dropping almost 6% as of 3 p.m. Eastern Standard Time. Despite a post-election market rally, publicly traded real estate owners also saw their share prices drop Wednesday.