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Jones Lang Ups Borrowing Capacity

Zacks Equity Research

Jones Lang LaSalle Incorporated (JLL) renewed its bank credit facility recently. The move helped the company increase its borrowing capacity and experience lower pricing.

In particular, with a consortium of 19 lenders, the credit facility has been elevated to $1.2 billion from $1.1 billion and the maturity has been pushed further to Oct 2018 from Jun 2016. Moreover, the pricing for the facility will result in a 0.375% decline from the prior pricing.

Therefore, for Jones Lang LaSalle, which had $479 million in borrowings outstanding on the facility as of Jun 30, 2013, the above move is encouraging, as in addition to lower interest expenses, it will provide the company the much required financial flexibility to pursue its growth initiatives.

As part of its efforts to enhance its office property management capacities, in August Jones Lang acquired a Houston-based property management company - Means Knaus Partners (:MKP). Adding approximately 16 million square feet to Jones Lang’s portfolio under management, this acquisition will enhance the company’s market share in Chicago, Dallas, Denver, Houston, Los Angeles, Orlando and Tampa.  

Also, early in August, Jones Lang disclosed that it is expanding in the Kansas City-area through the acquisition of commercial real estate firm – Capital Realty – that managed approximately 90 properties (5.4 million square feet) across the Kansas City area for regional and local institutional owners.

Jones Lang currently carries a Zacks Rank #4 (Sell). Some better performing REITs include Sotherly Hotels Inc. (SOHO), E-House (China) Holdings Ltd (EJ) and Standard Parking Corp. (STAN). While Sotherly Hotels and E-House (China) Holdings carry a Zacks Rank #1 (Strong Buy), Standard Parking has a Zacks Rank #2 (Buy).

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