JLL Shifting To An Investment Banking Model
https://commercialobserver.com/2024/03/jll-riguar…
Came across this commercial observer article yesterday. I’m a little interested in hearing what people think of this shift and how will it affect brokerage going forward. It seems like Eastdil does very well in IS and D/E because of their more IB leaning model and HFF had a similar structure too. I could definitely see a big part of this shift being driven by former HFF producers who want to rebuild what they had before but with a wide range of services like leasing and property management.
That sounds a whole lot like a meaningless circle jerk among JLL corporate executives.
Aka "You're not allowed to be a star even if you deserve to be based on your production. The company comes first."
Large brokerages have worked like that forever. Even 10+ years ago, the brokerage I worked for was broken down by coverage areas.
Every company uses data-driven technology. It's 2024.
"This star broker thing really gives them all of the power. We're going to make sure the kids coming up work long hours per week without any hope of becoming a star so the corporate overlords keep the power."
Agreed on all counts! I wonder if they blew each other after interviewing for the article.
Corporate leaders at brokerage firms are so tone-deaf. They just get in the way
Imagine having your head up your ass this much.
Peter is such a tool.
what is the difference? I understand legitimate REIB with balance sheet capabilities vs brokerage. I do not understand what people mean by calling HFF, Eastdil, etc “IB”.
Selling buildings is selling buildings, same with D/E services. For example Eastdil is good where I’m at but also do the same exact thing as every other brokerage in my market.
Genuinely curious if there’s any differentiation. Maybe I’m wrong but seems like JLL are just switching terminology around to further appeal to institutional investors.
Eastdil has an M&A advisory practice which is separate from investment sales.
Eastdil has an M&A advisory practice which is separate from investment sales.
So does CBRE
I don’t understand. What’s the goal here for JLL? Was their business suffering so much from all the “star power”?
They want to be Eastdil so badly 😂
I never got the banking thing even at Eastdil, it's real estate it's not that complex and you aren't doing the lords work. You're working as a middleman for deals. Crazy the mindset some people at top schools and top firms have about their job and prestige in real estate.
Funny to hear analysts at top firms like BGO, Two Sigma, PGIM, others with their tech enabled platforms and quantitative methods closing on small walkups or $40mm industrial deals then you go to a small, entrepreneurial firm with less pedigree that is doing the same thing and may have a portfolio of 50-100 properties with low debt making actual money.
This article made me never want to use JLL again lmao
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I understand RE banking wanting to become more IB like (focus on increasing fee income- capital markets, syndications, treasury, servicing, etc and not just rely on the balance sheet) but when a brokerage wants to become more IB like, what exactly does that mean? Does anyone know?
They’d like to think of themselves that way, but this is all just lip service. This is like an apple calling itself an orange. What’s wrong with just trying to be a great brokerage? It’s two entirely different business models.
The best teams at big brokerages already function like an investment bank, with a deep bench of analysts/associates, senior guys driving the BD, pooled bonuses, retainers/account work from institutional clients etc. But this wouldn’t work for 75% of teams.
After reading this again I’ve convinced myself that Riguardi arranged this piece to: a.) manage the Knakal fallout b.) lobby internally for a promotion and is trying to pump his own stock
Either way it seems disorganized and more like the personal musings of his brain rather than some broader strategy JLL’s rolling out
There may be a deep bench but it's real estate sales not investment banking, it's ridiculous they call it that to make it seem more sophisticated. Spot on with the apples and oranges comparison.
They want to be Eastdil so bad it hurts. That’s all I could gather from the article.
My favorite part was when the capital markets broker bragged about how he’ll now pick up the phone and talk to his colleague on the leasing side for leasing assumptions.
Bruh…is that really a new phenomenon for you?
In my experience, yes this is in fact a new concept for them. I once was working with JLL's cap markets team on a proposal for a deal we were looking at. He was like "it is going to take a while to put together a lease report I will get back to you in 72 hours". I called the leasing brokers at JLL and got the report for him in 20 min. So, this actually strikes me as completely believable.
This just reads as PR cope for losing Knakal
Side question, why do a good amount of JLL folk come off as dicks. I get the vibe that they think they’re better than others in the brokerage world. And yes, a lot of their people do very well but I don’t get the same vibe from the big competitors like CBRE.
I think it depends on the market.
In my market, the JLL multi team were fantastic, but then they all left for Newmark for a massive payday a few years back. Then, JLL hired the most clownish broker alive to run their team and their reputation was adjusted accordingly.
Meanwhile, I totally agree that the CBRE guys in my market are great, but in the market I used to work in, they were unquestionably douchebags.
Culture changes office to office.
This is JLLs way of responding to all the departures by trying to say "our platform is stronger than the individuals alone". End of the day, it's all a bunch of corporate BS, and when your public all that matters is earnings.
Worked at a shop like this that tried to do this. Basically they tried to tell me that this was an investment banking team but my experience ended up being entirely brokerage. I told them upfront that I was not interested in brokerage and I would accept the offer if it were investment banking and they ended up telling me that it was IB - it was not. I’d be wary of joining a brokerage trying to try this, they all do it at some point, but they never pan out.
The guy in the article is an absolute tool and insufferable but the general idea of covering clients like IBs do isn’t the craziest thing in the world. Investment banks have very structured deal teams and to best serve your institutional clients you have to be in the same type of structure. It allows everyone along the chain to leverage the next persons time and ensures that clients are interfacing with people who know their shit. There’s a very good reason why institutions don’t talk with street brokers.
You could argue that this model is to make brokers less powerful and reduce star power but if you think about it, if you’re a client hiring a brokerage shop you want the platform to be strong overall rather than just the broker especially if you do business nationally. There’s a good reason why Eastdil and ex HFF is so revered and it’s because they communicate so well internally and clients know that. That doesn’t mean that there aren’t stars in each because they definitely are but it’s not the key selling point. No personality should be bigger than the service the firm provides.
Clients want teams that work efficiently and talk to each other. It’s not bad for the industry for shops to start doing that especially when a handful of firms have been doing it for decades.
The guy in the article is an absolute tool and insufferable but the general idea of covering clients like IBs do isn’t the craziest thing in the world. Investment banks have very structured deal teams and to best serve your institutional clients you have to be in the same type of structure. It allows everyone along the chain to leverage the next persons time and ensures that clients are interfacing with people who know their shit. There’s a very good reason why institutions don’t talk with street brokers.
You could argue that this model is to make brokers less powerful and reduce star power but if you think about it, if you’re a client hiring a brokerage shop you want the platform to be strong overall rather than just the broker especially if you do business nationally. There’s a good reason why Eastdil and ex HFF is so revered and it’s because they communicate so well internally and clients know that. That doesn’t mean that there aren’t stars in each because they definitely are but it’s not the key selling point. No personality should be bigger than the service the firm provides.
Clients want teams that work efficiently and talk to each other. It’s not bad for the industry for shops to start doing that especially when a handful of firms have been doing it for decades.
The guy in the article is an absolute tool and insufferable but the general idea of covering clients like IBs do isn’t the craziest thing in the world. Investment banks have very structured deal teams and to best serve your institutional clients you have to be in the same type of structure. It allows everyone along the chain to leverage the next persons time and ensures that clients are interfacing with people who know their shit. There’s a very good reason why institutions don’t talk with street brokers.
You could argue that this model is to make brokers less powerful and reduce star power but if you think about it, if you’re a client hiring a brokerage shop you want the platform to be strong overall rather than just the broker especially if you do business nationally. There’s a good reason why Eastdil and ex HFF is so revered and it’s because they communicate so well internally and clients know that. That doesn’t mean that there aren’t stars in each because they definitely are but it’s not the key selling point. No personality should be bigger than the service the firm provides.
Clients want teams that work efficiently and talk to each other. It’s not bad for the industry for shops to start doing that especially when a handful of firms have been doing it for decades.
The guy in the article is an absolute tool and insufferable but the general idea of covering clients like IBs do isn’t the craziest thing in the world. Investment banks have very structured deal teams and to best serve your institutional clients you have to be in the same type of structure. It allows everyone along the chain to leverage the next persons time and ensures that clients are interfacing with people who know their shit. There’s a very good reason why institutions don’t talk with street brokers.
You could argue that this model is to make brokers less powerful and reduce star power but if you think about it, if you’re a client hiring a brokerage shop you want the platform to be strong overall rather than just the broker especially if you do business nationally. There’s a good reason why Eastdil and ex HFF is so revered and it’s because they communicate so well internally and clients know that. That doesn’t mean that there aren’t stars in each because they definitely are but it’s not the key selling point. No personality should be bigger than the service the firm provides.
Clients want teams that work efficiently and talk to each other. It’s not bad for the industry for shops to start doing that especially when a handful of firms have been doing it for decades.
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