Jones Lang Lasalle Incorporated Business Information, Profile, and History

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History of Jones Lang La Salle Incorporated

Jones Lang LaSalle Incorporated (JLL) is a global real estate services and investment management company with offices in 32 countries spread across five continents. JLL assists institutions, corporations, and wealthy investors in buying, selling, and managing real estate assets. Services provided by the company include investment banking, real estate finance, and corporate finance, as well as property development, property management, project management, and tenant representation. The company has more than $23 billion of public and private assets under management.

Origins

Although not created in name until 1999, JLL enjoyed a rich history stretching back to the 18th century. The corporate title JLL first appeared when Chicago-based LaSalle Partners Incorporated merged with London-based Jones Lang Wootton, creating a global real estate services and investment management company with nearly $1 billion in annual revenue. Of the two companies, LaSalle Partners could be considered the upstart, although the breadth and depth of clients and experience brought to the corporate marriage by the Chicago-based company were considerable. In terms of length of existence, however, the U.S. half of JLL paled when compared with the storied past of its British counterpart. Jones Lang Wootton was founded nearly 200 years before LaSalle Partners, providing an extensive prelude to the birth of JLL on the eve of the 21st century.

The enterprise that became known as Jones Lang Wootton began operating in 1783. That year, Richard Winstanley established himself as an auctioneer in London's Paternoster Row, where the business would remain for more than 70 years. Richard Winstanley's son, James, joined the Paternoster Row business in 1806, working as an auctioneer alongside his father. James Winstanley eventually inherited full control over the business, operating it as a sole proprietor until he formed a partnership with James Jones in 1840. Together, the pair presided over the company until Jones gained sole control over the company. In 1860, he moved the company to King Street, home to the business for more than a century. Like the Winstanleys, Jones's son, Frederick Jones, joined his father in business, renaming the company Frederick Jones and Co. after his father's retirement. Further replicating the evolution of the Winstanley era, Frederick Jones struck up a partnership after his father's departure. When Frederick Jones retired in 1872, his partner, C.A. Lang, became sole proprietor of the business, renaming it Jones Lang and Co. C.A. Lang's son inherited control of the company before passing it on to his son. Three generations of stewardship by the Lang family carried the company into the modern era.

The start of World War II in 1939 also marked the year Jones Lang and Co. merged with a 47-year-old company named Wootton and Son. The union created Jones Lang Wootton, a company whose growth would benefit significantly from the destruction caused by a world at war. By the end of the war in Europe, London bore the marks of German air raids. The destruction of property by bombing and fires was exacerbated by the destruction of documents that delineated boundaries and ownership of the property destroyed. Amid the confusion, Jones Lang Wootton stepped into the breach. The company searched for the owners of small land parcels, combined the properties, and secured contracts for either leasing or purchasing the amalgamated land parcels. By so doing, Jones Lang Wootton was able to secure licenses for development, which put the company in an enviable position for growth when the massive task of rebuilding London began in earnest in 1954. The company forged agreements entitling it to engage in development and leasing activities during the city's reconstruction, registering its first notable success with the development of Barrington House in Gresham Street. A slew of projects followed, including much of the new speculative development in the city and in prime locations in the city's West End.

Post-World War II Expansion

Jones Lang Wootton's participation in post-World War II development and reconstruction delivered powerful growth, providing the financial means and the confidence to expand internationally. The company established its first major overseas presence in Australia. In 1957, a British expatriate residing in Australia, Ronald Collier, approached Jones Lang Wootton officers in London, seeking their support. Although there was no investment market in Australia, company officials foresaw significant potential in the country. In 1958, the company established offices in Sydney and Melbourne, embarking on its involvement in buying, selling, and in the investment management of real estate assets. By the mid-1960s, the company's presence in Australia had become entrenched, developing into an operation consisting of nearly two dozen partners and a staff of 300. Jones Lang Wootton's success in Australia served as a springboard for expansion throughout the Pacific Rim. Offices were established in New Zealand, Singapore, Kuala Lumpur, Hong Kong, and Tokyo. As the company fleshed out its presence in the Southeast Asia and Pacific regions, it also broadened the scope of its operations closer to home. Jones Lang Wootton expanded into Scotland in 1962 and into Ireland in 1965, followed by a push into continental Europe. An office was opened in Brussels in 1965, paving the way for expansion into Holland, France, and Germany. Mindful of opportunities to the east, the company opened offices in Budapest, Prague, and Warsaw.

The Late 1960s Birth of LaSalle Partners

As Jones Lang Wootton was orchestrating its European expansion, LaSalle Partners was beginning its corporate life. The company was founded in 1968 as IDC Real Estate, a small El Paso, Texas-based firm that grew quickly. The company soon exhausted the opportunities available to it in commercial real estate and investment transactions in El Paso, prompting its founders to relocate to Chicago in 1972. The change in headquarters helped fuel robust growth during the 1970s, as the company focused on identifying client needs, providing superior service, and cultivating initial client contacts into long-term business relationships. In 1977, the company changed its name to LaSalle Partners.

The establishment of the LaSalle Partners name in the Midwest coincided with extension of the Jones Lang Wootton empire to the east. The expansion of the latter company's operations throughout Europe in the 1960s was followed by its first foray into the United States in the 1970s. Jones Lang Wootton opened an office in New York City in 1975, marking the birth of Jones Lang Wootton USA. Initially, the small satellite office focused on real estate and investment opportunities in midtown and downtown New York City, using thorough market analysis to compensate for its relatively diminutive stature. During the early 1980s, the scope of Jones Lang Wootton USA widened, as the operation benefited from the increasing influx of British, Asian, and Middle Eastern money into the United States. Attuned to the needs of these foreign clients, the company found itself ushering in substantial capital into the property markets, as well as providing a range of services that included project management, property management, and leasing. Between 1980 and 1982, the growth of the U.S. operation reflected the surge in business, as its staff swelled from roughly a dozen employees to more than 40 employees.

By the beginning of the 1990s, Jones Lang Wootton's presence in the United States, as well as its presence overseas, had grown considerably. In the United States, through Jones Lang Wootton USA, the company operated in eight cities, employing more than 500 employees. Elsewhere, Jones Lang Wootton offices fanned across the globe, comprising a network of 56 offices located in 19 countries. Worldwide, the company performed $14 billion worth of debt and equity transactions, generating roughly $4 billion in sales by marketing its expertise in managing, leasing, financing, and selling real estate. Through its global ties, the company drew upon the resources of pension funds, commercial banks, savings institutions, private investors, property companies, and insurance companies, using the resources to provide debt and equity financing.

For its part, LaSalle Partners entered the 1990s with ambitious plans to expand its operations. In the last years leading up to its merger with Jones Lang Wootton, the company embarked on an acquisition campaign that added significantly to the might of the soon-to-be created JLL. In 1994, LaSalle Partners acquired a real estate investment advisor named Alex Brown Kleinwort Benson Realty Advisors Corporation. A London-based investment advisor, CIN Property Management Limited, was added two years later, followed by the acquisition of a property and development management company named Galbreath Company in 1997. After completing its initial public offering of stock in July 1997, LaSalle Partners purchased the project management business belonging to Satulah Group in January 1998. Later in the year, the company purchased the fourth largest management services firm in the United States, COMPASS Management and Leasing, Inc. In its last major transaction before its merger with Jones Lang Wootton, LaSalle Partners acquired the U.S. retail property management business of Lend Lease Real Estate Investments, Inc., completing the deal in October 1998.

In the months leading up to the merger with LaSalle Partners, Jones Lang Wootton focused on reorganizing its worldwide operations, seeking to create an integrated, single holding company. Worldwide, the company generated $482.5 million in revenue in 1998, with approximately three-quarters of the total derived from its activities in Europe and North America. The globalization of the property business, according to Jones Lang Wootton officials, necessitated the integration of the company's operations, producing business synergies that coordinated research, marketing, information technology, and human resources departments. The globalization of the property business also prompted the company to make another decision, the effect of which would be far more profound than integrating operations. In the company's 1998 annual report, Christopher Peacock, Jones Lang Wootton's president and deputy chief executive officer, stated that there was a need "to consider mergers and acquisitions as a means of accelerating our growth, particularly in North America." Peacock's wish list grew longer, leading him to add that the "consequent need for increased access to external capital would require us to weigh several options carefully, including remaining an integrated private company, taking a capital partner, or becoming a publicly quoted company." Based in Chicago and operating as a publicly held company, LaSalle Partners represented the answer to both of Peacock's needs.

Creating Jones Lang LaSalle Through 1999 Merger

Jones Lang Wootton and LaSalle Partners merged on March 1999, creating JLL, a truly global real estate services firm and investment manager with pro forma revenue of $814 million. Although both companies professed similar corporate values, promising to ease the union of their corporate cultures, the merger proved to be more complex than anticipated. The process of integrating operations and creating the appropriately sized infrastructure to support the new concern consumed time and resources, leading to an actual net loss of $94.8 million in 1999--far more than expected. Under the stewardship of Stuart L. Scott, JLL's chairman and chief executive officer, the company resolved its difficulties, developing a cost-reduction program at the end of 1999 that promised to realize $15 million in savings in 2000 and $20 million in savings the following year.

After moving past the difficulties of the merger, JLL emerged as a powerful force. The company touted itself as the largest property management concern in the world, overseeing more than 680 million square feet of real estate, and as the first fully integrated, global hotel investment services firm. Following the merger, the two business segments were operated as LaSalle Investment Management and Jones Lang LaSalle Hotels. LaSalle Investment, with $22 billion of assets under management by 2002, assisted customers in buying, selling, and managing property, offering services such as property development, property management, project management, leasing, and tenant representation. Jones Lang LaSalle Hotels provided advisory, transaction, financial, and management services.

As JLL plotted its course for the 21st century, the process of integrating LaSalle Partners and Jones Lang Wootton continued. The early years of the new century saw the company reduce its debt and achieve financial growth, despite the constraints of a difficult global economy. Between 1999 and 2001, JLL reduced its debt by $100 million, eclipsing the company's original two-year projection of $40 million. In 2001, the company posted $40.5 million in net income and generated $881.7 million in revenue, compensating for the lackluster results of 1999. In January 2002, Christopher Peacock succeeded Scott as chief executive officer, leaving Scott to concentrate exclusively on his role as JLL's chairman. Under their leadership, JLL pressed forward, well positioned to continue the legacy of success established by generations of company executives.

Principal Subsidiaries: LaSalle Investment Limited Partnership; LaSalle Investment Management, Inc.; Jones Lang LaSalle International, Inc.; LaSalle Investment Management Securities, Inc.; Jones Lang LaSalle Americas, Inc.; Jones Lang LaSalle (Europe) Ltd. (U.K.); LaSalle Partners International (U.K.); Jones Lang Wootton (U.K.); Jones Lang LaSalle Australia Pty. Limited.

Principal Competitors: CBRE Holding, Inc.; Cushman & Wakefield, Inc.; Grubb & Ellis Company.

Chronology

• Key Dates:
• 1783: Richard Winstanley forms the predecessor to Jones Lang Wootton.
• 1860: The London business moves from Paternoster Row to King Street and eventually becomes known as Frederick Jones and Co.
• 1872: Company is renamed Jones Lang and Co.
• 1939: Jones Lang and Co. merges with Wootton and Son to form Jones Lang Wooton.
• 1968: IDC Real Estate, the predecessor to LaSalle Partners, is formed.
• 1999: LaSalle Partners and Jones Lang Wootton merge, creating Jones Lang LaSalle Incorporated.