Table of Contents
JLL, the $13 billion-plus commercial real estate and investment management firm, is charting a course through a period of notable economic and geopolitical turbulence.CEO Christian Ulbrich, speaking with TIME in London, outlined the challenges and opportunities facing the industry, from navigating unpredictable political landscapes to redefining the purpose of central business districts and accommodating evolving work models.
Ulbrich, who has led JLL since 2016 and previously steered the company through the 2008 financial crisis and the COVID-19 pandemic, emphasized the need for caution and adaptability in the current surroundings. “2024 was a good year for the economy ” he noted, “but then we heard a lot of messages which were disruptive. If you have too much disruption people get cautious.” He likened the situation to “fog,” where reduced visibility necessitates a slower, more intentional pace.
The Impact of Political Uncertainty
The current political climate is creating a sense of unease that is impacting business decisions across industries. According to Ulbrich, a strong economic recovery in the U.S. was threatened by “disruptive” messaging,leading to a slowdown in investment and a more cautious approach to risk. He acknowledged the difficulty in predicting the long-term effects of policies like de-globalization, stating that such measures would likely “raise pricing” and disproportionately affect lower-income individuals.
However, Ulbrich expressed skepticism about the likelihood of drastic shifts, observing that the commercial real estate – buying, selling, and financing properties – still has room to grow. Ulbrich noted a “flight to quality,” with top-tier companies securing premium spaces and driving up rental rates even as overall market occupancy declined.
Client Demands and the Hybrid Work Model
JLL is witnessing a shift in client demands, with companies prioritizing high-quality spaces to attract and retain talent. “The best of the best companies were securing the best possible space for their people,” Ulbrich explained, “and this is now feeding down to many more companies.”
The return to the office remains a complex issue, with Ulbrich acknowledging the prevalence of hybrid work models. He stated that while most CEOs desire employees back in the office, versatility is essential.”The reality is hybrid,” he said, “and with every company…there is a need to show flexibility.” He believes a balance of three-and-a-half to four days in the office, combined with one to one-and-a-half days working remotely, is a likely outcome.
Interestingly,data from JLL’s building operations suggests that middle management between the ages of 38 and 50 are the most reluctant to return to the office,potentially due to factors like homeownership and longer commutes.Ulbrich warned that this reluctance could be detrimental, as these individuals are crucial for setting an example and mentoring the next generation of leaders.
Reinventing Central Business Districts
The pandemic has fundamentally altered the use of city centers. Ulbrich emphasized the need to “rethink these urban centers by making them much more livable,” advocating for converting underperforming office buildings into residential spaces and adding vibrant retail and entertainment options. He acknowledged that this transformation is more challenging in the U.S. compared to European cities, which traditionally have a stronger mix of residential, commercial, and recreational spaces.
The Evolution of Leadership
Throughout his 25 years in leadership positions, Ulbrich has learned the importance of empowering talent. He explained that as JLL has grown, his role has shifted from directly influencing outcomes to “identifying the best possible talent” and motivating them to succeed. “You have to learn to accept that you are identifying talent,” he said, “You’re coaching that talent, but you have to allow them to do what they think is right.” This approach, he believes, is essential for navigating the complexities of a large organization and fostering innovation.
