Jones Lang LaSalle Inc. (JLL), a leading full-service real estate firm, has recently formed a strategic alliance with General Growth Properties (GGP), a premier shopping mall owner and developer in the U.S., to manage and lease the properties in its third-party management division. General Growth, however, will continue to manage and lease about 200 malls it already owns.
 
Following the transaction, Jones Lang has acquired third-party management and leasing rights across a portfolio of 18 regional shopping malls and community centers in 11 states spanning over 11 million square feet, which supplement its total retail portfolio of 84 million square feet in the U.S. and 265 million square feet worldwide.
 
In accordance with the deal, approximately 200 management employees and 30 corporate employees providing services to these properties will become Jones Lang employees effective immediately.
 
The strategic alliance would enable Jones Lang to leverage a broad real estate product and service range to strengthen its position in the market. The deal would also enable the two companies to work in unison to pursue opportunities to provide additional third-party services to new and existing clients. On the other hand, the tie-up would assist General Growth to create a broader range of services for its clients, thereby improving its bottom line.
 
Jones Lang provides corporate, financial and investment management services to corporations and other real estate owners, users and investors worldwide. The company operates as a single-source provider of real estate solutions with a broad range of real estate product and services, and an extensive knowledge of domestic and international real estate markets.
 
With about 180 corporate offices across the globe, the company operates in more than 750 locations in 60 countries. Jones Lang is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.6 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the largest and most diverse in the real estate sector with approximately $40 billion of assets under management.
 
Jones Lang depends on a vibrant global real estate market to grow earnings. With the decline in global real estate fundamentals due to a meltdown in the international banking system, transaction volumes have slowed. Consequently, the demand for Jones Lang’s services has decreased. We maintain our Neutral rating on Jones Lang with a Zacks #4 Rank, which translates into a short-term ‘Sell’ recommendation.
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