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Current Season: First Draft Live
Between economic whiplash, shifting policies and market volatility that changes by the hour, you need industry insights that cut through the noise. That's exactly why we're launching First Draft Live, a new weekly series that breaks down what's happening, why it matters and what you need to know to do better business.
Join us live on Bisnow.com every Friday at 12:30 PM ET / 9:30AM PT for conversations with the industry's sharpest minds discussing the week's most critical stories, or catch the replay right afterwards — here on your podcast app of choice.
Welcome. I'm Mark Bonner, business owner's editor in chief, coming to you live from New York. It's Friday, October 24. Well, JLL has been on quite the tear this year. In Q1, the firm pulled in about $5,700,000,000 in revenue, up roughly 13% from last year and profits climbed nearly 30%.
Mark Bonner:Then in q two, revenues pushed past 6,000,000,000, up another 10% with earnings per share jumping close to 30% again. And a market still grinding under high rates and slow deal flow. Those are rare numbers these days. And all eyes are on JLL's next earnings release coming in a little more than a week on November 5. But the story behind those numbers isn't just another strong quarter.
Mark Bonner:It's about a company rewiring how CRE is actually operating. While most of the industry is still teasing AI or testing AI, I should say, JLL is already scaling it. Its enterprise platform Falcon sits on top of decades of proprietary real estate data turning lease terms, valuations and forecasts into real time insight. JLL GPT gives employees generative tools that cut work cycles from weeks to hours. Azera helps clients model space and cost in minutes.
Mark Bonner:And the new property assistant lets landlords ask, where's when's my NOI dropping? And then they get the answer immediately. It's not a pilot. It's a platform. And it's quietly redefining what it means to be a brokerage and advisor and a data company all at once.
Mark Bonner:So today we're asking how far can JLL pull push this transformation and what does it say about where commercial real estate is heading next? To unpack it, we're joined by the man himself who's driving that shift coming to us live from Frankfurt, Germany, JLL CEO Christian Ulbrich. Christian, welcome to First Draft Live.
Christian Ulbrich:Mark, thank you. What a what a brilliant introduction. That was that was very kind of you.
Mark Bonner:So let's talk about Falcon. That's become the center of JLL's AI play built for commercial real estate and fueled by decades of deal and property data as we just discussed. It powers tools like JLL, JPT, GPT, Azera, and the new property assistant. But Christian, give us the quick version here. What exactly is Falcon, and what is it doing inside JLL today?
Christian Ulbrich:Well, as it says, Falcon is a platform. And so that's kind of the the back of the house for all our AI tools. It pulls, the data in and then it distributes the data to the different applications we have. And the number of applications are are growing as we speak, and therefore, it is important that you you have the framework, the house around it, and that's what LL's Falcon is.
Mark Bonner:But can you walk me through the the system and how it actually works? What does a user have to put into it? And then how quickly can he get something out of it to make a real difference in their workflow?
Christian Ulbrich:Well, as you know, AI is is based on accurate data. So the story started with us kind of creating a really thorough data platform where all what we do is kind of, finding its home. We work very much on the accuracy of that. That is the biggest enemy. And then we pull that data into that platform and then we distribute it out to whatever application we are running.
Christian Ulbrich:And and so the the people will only see the application they are using. They don't have to do anything else than using an application like they use any other software. But behind that, that is all hosted under the JLL's Filecoin platform.
Mark Bonner:So where are you seeing the first real wins? Leasing, valuations, portfolio planning?
Christian Ulbrich:Well, you see wins pretty much across the board. What is probably fair to say that in most organizations who are fully embracing AI, the focus sits on productivity gains. So we are making that the life of our colleagues easier because work which they had to done to do in the past, kind of more handishly and pull the data together. This is now done by an agent. And so we are giving them literally time back and it's moving from there now much more into client facing tool.
Christian Ulbrich:You mentioned some of them in your intro that we now have already tools which our clients are using, which is making their life easier. And that's kind of the usual journey which you will see probably across many very large organizations.
Mark Bonner:So let's get into the efficiencies that are created by this in a second. But you mentioned accuracy, right? That's critically important. Know, I mean, we've all read or experienced ourselves that AI hallucinates. Maybe it's 90% accurate, but that 10% can represent a huge pitfall if you're not in control of it.
Mark Bonner:How do you guys navigate that from a policy perspective internally in terms of how to trust or to verify what the AI gives back to your workforce?
Christian Ulbrich:Yeah. I mean, that is that is a great point because people sometimes say AI will immediately take over instead of the humans. It's it's the combination. People, It's but they still have to kind of continue what humans are good at, and that is to be critical to ask questions. And so when you get a response from AI, you have to look at that response and see does that really make sense.
Christian Ulbrich:And I guess we all have played around with different systems and in our private lives. And sometimes you are amazed about the accuracy of the response. And sometimes you look at the response and you know well that's not quite true. And so that is why it's so important that the proprietary data which we have within JLL in the system is as accurate as possible because then that helps obviously our people to build that trust into the systems.
Mark Bonner:Got it. So, you know, inside JLL, and we'll get to the now we're gonna get to the the efficiency part of this. I know it's cutting cycle times to almost zero task that took weeks or months now are taking days, if not hours. Document review is probably a place where this is really helping your teams, client reporting. All of it is happening in real time faster than ever, probably in your career, Christian, not to put words in your mouth.
Mark Bonner:But you mentioned the time that it's giving back to your workforce. What do people do with that extra time?
Christian Ulbrich:Well, the most important thing they do is that they have more client contact. They spend more time interacting with our clients. And that is what we want for various reasons here. First of all, it's always great when they speak to clients but they have more to talk to the client about because they are based with a lot of facts, data driven facts which provide insights and that insights makes our clients much more successful. So our people have to bring that information to our clients.
Mark Bonner:So have you seen that play out in the real world? Like has that actually occurred with your employees? Are they doing it? And what are have the outcomes been stronger because they have more client contact?
Christian Ulbrich:Oh, absolutely. Absolutely. I mean, we we see we see that the productivity they are gaining is turning into higher revenue per head. It's turning into higher success rates when they are pitching. It's turning into higher or faster closings.
Christian Ulbrich:We have now 56% of the bidders which are generated from our AI tools are the ones who are closing the deal on the capital market side. So we have tremendous amounts of KPI which are proving the value of the tools and so that's why everything is now going at that very rapid speed level because it's in your face the benefits for your clients when you embrace AI.
Mark Bonner:Look. I mean, this is obviously a deep competitive advantage that you all have. Right? One of the giants of commercial real estate globally. There's probably gonna be a lot of people who listen to this conversation who don't work at one of those giants.
Mark Bonner:There may be a middle market firm or a small local firm somewhere in The United States or in Europe or Asia and they're thinking, how can I keep up? How can I realistically compete with the JLL's of the world who are who are able to pull this off for their teams? I mean, what would your advice be, Christian, to the majority of the commercial real estate industry, especially in The United States, which is not which is more middle market and are finding trying to figure out a way, what can we learn from the big boys, if you will, and how can we apply that for our small 50 to a 100 person unit somewhere in the Midwest Of The United States, for instance?
Christian Ulbrich:Well, first of all, what type of companies are we talking about in the real estate industry? If you talk about small investors or those type of developers, those type of companies, they can easily partner with us or with others who have the data in house and and we are very happy to help them to be successful as as our clients. If you talk about smaller competitors to us, I don't necessarily there's a question around whether you are big or small because the advantages of being small because you can move faster, it's probably easier to convince your your teammates how important it is to embrace AI in a smaller, store than in a larger outfit. But the the disadvantage is access to data. I think that is for us the biggest advantage.
Christian Ulbrich:The amount of proprietary data which we are obviously complementing with publicly available data. Now a smaller outfit doesn't have that much proprietary data, but there's still a lot of data out in the public. So they can still have the opportunity to use AI effectively.
Mark Bonner:But as part of the so okay. But part of the answer is they should they should work with JLL?
Christian Ulbrich:Well, others will probably do the same what we do. I don't think what we do is totally unique. Maybe we we went on that journey a bit early, but this is nothing which will where you have forever a competitive advantage because everybody will embrace AI. Otherwise, they will be out of business relatively soon.
Mark Bonner:So the other big thing that's out there is something that everyone's talking about. Agentic AI, which basically means systems that don't just answer questions, but actually take action independently. You're building that into Falcon. A lot of other of your competitors are as well. What does the general commercial real estate public make of that?
Mark Bonner:How close are we to AI running full workflows inside CRE or even at GLO?
Christian Ulbrich:Well, I would say the whole development is in comparison to previous innovations we have seen at lightning speed level. And and people shouldn't make the mistake that they think AI is just for the simple task. I would say it's the opposite. AI is starting to prove, agentic AI is starting to prove that the most complex tasks are actually the one where you have the biggest advantage because with that operational complexity, AI can really drive additional value. And so it you can almost think about the most complex property types will will create the biggest kind of value when you apply AgenTic AI.
Christian Ulbrich:And and that's now in the development, but it goes really outrageously fast.
Mark Bonner:What I mean, within JLL, what property types are showing the biggest operational gains so far when it comes to agentic AI?
Christian Ulbrich:As I said, the more complex, the better. So you see obviously a lot of advantage around when you deal with multifamily with all these tenant interactions and all the necessary kind of work which needs to be done in those properties around maintenance. Those are the things where I can really play it out. But you can also think about industrial buildings where you have the supply chain coordination. Literally, the more complex, the better.
Mark Bonner:So, you know, we're talking about accuracy a few minutes ago, right, in in a different context where there's deep human intervention, as as the guardrail or the fact checker to make sure that it's accurate, especially as you're making big complex decisions or at least presenting things to clients. On this, it's a little bit more independent. What kind of guardrails are in place internally to make sure that it is accurate? Is it data quality? Is it compliance?
Mark Bonner:Are there ethical concerns that you all have discussed internally on this front as as as you begin to really roll this out?
Christian Ulbrich:Yeah. I mean, obviously, everybody is is still learning as we move forward, but there are a couple of things which we are particularly concerned about, most notably the whole topic around cyber security. That's why we created JLLGPT a closed system that our data doesn't leave the company, that is very important to us and that client data doesn't leave the company, but that is a huge topic around cyber. The other challenge which is now coming up, you will have heard about the term citizen development. This is moving so fast and you cannot stop your talented workforce to kind of create their own prompts which then become a small little agent.
Christian Ulbrich:And so there's a massive, massive move towards citizen development. Again, this is within JLL happening almost exclusively within the framework of JLL GPT. But, you know, people may bring their own device and then use a different system. And that's where we have to prevent that any kind of corporate data is getting on other devices. So there are a lot of guardrails in place, but it is something where we will learn over the coming months and years what kind of loopholes are being created which become a challenge for that whole trend around AI and the risk accompanying it.
Mark Bonner:If you're just joining us, this is First Draft Live. We're talking with JLL CEO Christian Albrecht calling us from Frankfurt, Germany about how the firm's Falcon platform and AI strategy are reshaping global commercial real estate. Christian, let's go to a question from the audience here. Is the Falcon technology offered to outside customers, or are there plans to do so?
Christian Ulbrich:Well, we have obviously offered it to our clients very much in our work dynamics business. So you mentioned it in the intro. We have clients now who used to ask questions about their own portfolio to a large group of business analysts and then they were trying to bring all the information together and report back a couple of days later. And now they can just write the prompt into the tool which we have provided to them and so the CIE lead will have the answer instantly, which is fantastic for them. It creates a bit of a challenge for our industry because we have to now create new ways of being rewarded for what we do.
Christian Ulbrich:We have to be paid for the outcome. And so that is something which is a change in the industry and we are still at the beginning to see that driving change into our industry. But that is just one example. Are plenty of other examples where we provide access to clients to their portfolio and they can look what other opportunities similar to their portfolio is being out there. And so again, this is just early days, but it's coming every couple of weeks, new products to the market.
Mark Bonner:You know, across capital markets AI is tightening the deal clock. It's spend it's speeding up underwriting. It's cutting through diligence. It's even transitioning deal docs in seconds. From your perspective, Christian, I mean, what capital sources are leaning hardest into AI assisted underwriting right now?
Christian Ulbrich:It's probably the investment management firms and maybe even more private equity. We saw some private equity companies really doubling down on their data accuracy over the last couple of years and they are probably now the ones who are most embracing the opportunity AI is delivering. I mean, we shouldn't forget at the end of the day, the real estate business is a data business. Do I buy this building or do I buy that building? Do I lease this building or do I lease that building?
Christian Ulbrich:Those are not gut fields. Those are things which are supported by facts, by data. And and so there is no surprise that some of the most successful real estate investors are the ones who are embracing data the most, and they are the ones who are now embracing AI the most.
Mark Bonner:You have fierce competition everywhere around the globe. And all of your your fiercest competitors, which are household names within commercial real estate, are also spending bootyles of cash on very similar products. They can speed up their their teams to come to results faster and obviously things that are more client facing. I guess the question for you, Christian, is as you peer over the horizon here, when everyone's fast and when everyone has this sort of AI playbook, if you will, what becomes the new edge in this world?
Christian Ulbrich:Well, I I don't think that's a big change to what it was before. Any innovation is being caught up by others very quickly because what we can do, others will look at it and they will try to do the same. And if they don't do it, then those type of companies will be out of business. You know, go back to whatever many other examples, the the mobile phone, you know, when we move from normal mobile phones to smartphones, you know, the ones who are still not providing smartphones are just out of business, and it's the similar trend is here. So I don't think that any kind of AI tool which is driving just productivity will be in any form a game changer.
Christian Ulbrich:It will become table stakes within three, six months. Where there is potentially an opportunity is when you find a way for a completely new go to market strategy. So there may be agents which will completely reinvent parts of our services with a completely new approach to go to market. That then could become a real differentiator. But there isn't anything out there.
Christian Ulbrich:I guess everybody is working on those. We are working very hard on those kind of potential agents, but nothing is at the moment out there, which I would see as a big game changer.
Mark Bonner:You know, the headlines that we've all seen here on another front has to do with talent. Right? AI has been rewriting job descriptions. It's been cutting entry level roles. It's been boosting output and changing what junior, quote, unquote, even means in commercial real estate these days.
Mark Bonner:How do you balance that automation with while also developing human talent?
Christian Ulbrich:Yeah. I mean, there's a lot of talk out there that entry level jobs will completely disappear and and and and overall the amazing amount of potential job cuts. Let's see. At the moment, it creates jobs. That doesn't mean that it is always the same person, but at the moment it creates job.
Christian Ulbrich:That's the reason why San Francisco is coming back as a real estate market really nicely because of all the AI jobs. So going back to that question around analyst, I think what it does is it provides smart young people an ability to leapfrog in their career experience in their in their traction on gaining knowledge and becoming a really valuable member of a team much earlier. What took three years will probably now only take six to twelve months in that journey. And so overall, I think for people with ambitions and the willingness to learn, the opportunities are only rising. The flip side of that is those who are not that interested to really embrace those new tools and and go the extra mile, they may find it more difficult to have a career or even find a role going forward.
Mark Bonner:You know, Gen Z, as we've discussed a lot on this show over the last year, you know, this is the most educated, most tech enabled generation to ever hit the global economy. They're having a lot of hard they're having a they're having a hard time finding work right now even though they've went to some of the top four year schools, especially United States and also in Europe and Asia. When you think about those people, those are your future leaders, for JLO and obviously future leaders for commercial real estate. What skills are now must haves at JLO at that level? What is the fastest way to get your resume to the top of the and for you to get a job at JLO given this dynamic that we're discussing with artificial intelligence?
Christian Ulbrich:Well, that's a big question. I would say the skill sets needed, is that you can really communicate well, that you can be part of a team. I think and that has not necessarily anything to do with AI, but the world has become incredibly complex. So it's not a world for solo fighters. It's a world for team players.
Christian Ulbrich:And so people who can really be part of a team and do their very best for the overall success of the team are in a in a really good position. And then within the team, you will have people who are slightly more expert on a specific topic. Being technology savvy, being AI savvy for young people will be completely table stakes, And and therefore that will not be the differentiator. But you can also turn that whole thing around. I heard just yesterday a story that some of the best universities, their students are creating their own agent while they are going through university.
Christian Ulbrich:And then when they come to an interview with a company, they ask the company, what tech stack do you have? Can I bring my own agents Because that is my life now, my agent? It's my partner. Because that's what people do. They use now agent as a partner.
Christian Ulbrich:So you're you're hiring you're hiring Peter, but Peter brings his agent. And so you get from a company perspective almost two for one.
Mark Bonner:So, look, the bottom line is this. You know, we're we're still in the very infancy of AI adoption in the global economy, and certainly, that's true for commercial real estate. We're in the pilot refine scale phase right now. The messy middle, I think where every firm's experimenting, some are winning, some are not. Nobody's got the playbook down just right.
Mark Bonner:And I think that includes JLO, right? You may be further along on this journey than a lot of other companies, but this is still obviously being figured out. And there's obviously a
Christian Ulbrich:lot of
Mark Bonner:opinions about AI. Right? In your opinion, what do you think is the most common overreaction you're seeing around AI adoption?
Christian Ulbrich:Well, I think a lot of people kind of who are maybe skeptics to AI are using it for the first time. They are bringing their data in, and they are writing prompts, and they are completely disappointed with the outcome and then they blame the AI for the outcome, but they should blame their own data accuracy. You know this whole story and it's voted many, many times garbage in garbage out. That is coming to a new level when you talk about AI. And therefore that is probably a very common reaction from people who are skeptics.
Christian Ulbrich:You have to do your homework if you want to take the benefit from AI. And so that is, by the way, one of the big challenges which every organization has, and I would say larger organizations even more than smaller organizations, that you have to overcome your internal skeptics who wanna prove to you that this is all rubbish and they don't need to do that. And and so that's why we have our successes, but we also have our failures. But very often, the failures are kind of man made failures within your organization.
Mark Bonner:For the rank and file commercial real estate leader, right, what is your best advice to them right now about where they should start if they're still on the sidelines, regarding experimenting with AI and trying to implement it into workflows in their offices?
Christian Ulbrich:Well, you know, I think it is important that you are identifying two, three trials, and then you really double down on them and try to make them work. Don't spread kind of yourself too thinly with twenty, thirty different ideas, but nothing is really getting the right attention. Try out with two, three thoughtful ideas and then go deep on them. But don't wait too long. The train has left the station, and this train is going at kind of, I can say, Japanese speed levels of trains really, really fast.
Mark Bonner:Okay. That's our show for today, Christian. I'm getting the hook here from my producers, but I wanna thank you very much for taking the time to be with us today. I hope you have a wonderful weekend.
Christian Ulbrich:Thank you so much for having me, Mark. Have a nice weekend too.
Mark Bonner:If you missed any part of this conversation or wanna catch earlier episodes, you'll find every show on biznow.com or in your favorite podcast feed. Just search First Draft Live. Our conversation with WeWork CEO, John Santora, live from the Cretek Conference in New York this week is now up on the site and also in your podcast stream. And next week, we're back with Industrious CEO and cofounder Jamie Haddari for a look at where the flex office market goes next. This is First Draft Live.
Mark Bonner:Have a great weekend y'all.