Why Jones Lang LaSalle (JLL) Remains a Top Pick Despite Portfolio Adjustments

John W. Rogers, Jr., the founder and co-CEO of Ariel Investments, has long been a vocal advocate for value investing, prioritizing companies with strong fundamentals and undervalued potential. While his firm’s recent portfolio adjustments in early 2025 included a strategic reduction in its stake in Jones Lang LaSalle Incorporated (JLL), the real estate services giant remains a core holding. This raises a critical question: Why does JLL still warrant attention as a top stock to buy, even amid portfolio rebalancing?

The Ariel Portfolio Shift: Tactical, Not Tactical

Ariel Investments reduced its JLL holdings by 9% in Q1 2025, trimming its position to $268 million—still a top-five holding representing 2.9% of the firm’s total portfolio. This move, as detailed in the December 2024 13F filing, reflects Rogers’ disciplined approach to portfolio management. The reduction coincided with broader sector shifts, such as cuts to cruise line stocks (e.g., Royal Caribbean and Norwegian Cruise Line) and increased stakes in healthcare and technology. Yet, JLL’s retained prominence underscores its enduring strategic value.

Rogers’ rationale likely hinges on JLL’s diversified revenue streams, which span commercial real estate brokerage, property management, and corporate advisory services. The company’s global footprint and focus on sustainability—key drivers in a shifting real estate landscape—align with long-term trends.

The Case for JLL: Fundamentals and Value

1. Resilience in Volatile Markets:
   JLL’s revenue grew 8% year-over-year in 2024, outpacing broader market declines in real estate sectors. Its advisory business, which generates recurring fees, remains robust, insulating it from cyclical downturns.

2. Undervalued Relative to Peers:
   JLL trades at a price-to-earnings (P/E) ratio of 18x, below the sector average of 21x. This discount suggests the market has yet to fully recognize its operational efficiency and scale.

3. Sustainable Growth Initiatives:
   The company’s push into ESG (environmental, social, and governance) consulting and digital tools—like its proprietary technology platform, JLL Technologies—positions it to capitalize on demand for smart, sustainable real estate solutions.

Rogers’ Investment Philosophy: A Blueprint for JLL’s Potential

Rogers’ value-driven strategy, rooted in Warren Buffett’s “circle of competence” principle, emphasizes deep company understanding and long-term horizons. His focus on small-cap value stocks in 2025—while trimming riskier bets—highlights a preference for stability over speculation.

While Madison Square Garden Entertainment (MSGE) now leads Ariel’s portfolio, JLL’s retention as a top holding signals confidence in its defensive qualities and growth trajectory. Rogers’ hands-on approach—engaging directly with executives and evaluating local market dynamics—likely affirms JLL’s leadership in its field.

Risks and Considerations

No investment is without risk. JLL faces headwinds, including:
- Economic Uncertainty: A potential recession could dampen real estate demand.
- Valuation Pressures: Competitors like CBRE Group (CBRE) and Brookfield (BAM) may erode margins.
- Regulatory Changes: Stricter ESG regulations could increase compliance costs.

However, JLL’s diversified earnings and strong balance sheet (with $1.2 billion in cash as of Q3 2024) mitigate these risks.

Conclusion: JLL’s Place in a Value Investor’s Portfolio

Despite the 9% stake reduction, JLL’s sustained position as a top holding at Ariel Investments underscores its strategic importance in Rogers’ value-driven portfolio. With a P/E ratio below its peers, a global footprint, and growth tied to secular trends like sustainability, JLL offers defensible value in an uncertain market.

The reduction should be seen not as a vote of no confidence, but as a tactical rebalancing—a hallmark of Rogers’ disciplined approach. For investors willing to look beyond short-term volatility, JLL’s fundamentals align with the principles that have driven Ariel’s success: patience, research-driven decisions, and a focus on companies that compound value over time.

As Rogers himself noted in the 2025 Barron’s Roundtable: “The best investments are those you understand deeply and hold for the long term.” For now, JLL fits that mold.