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Corporate overview

LaSalle is one of the world’s leading real estate investment managers, with more than $65bn of assets under management globally (as of Q2 2020). LaSalle sponsors a complete range of investment vehicles spanning the risk-return spectrum, and the firm’s diverse client base includes public and private pension funds, insurance companies, governments, corporations, endowments and private individuals from across the globe. We are solely focused on real estate, which enables us to fulfil our primary objective of delivering competitive investment performance, along with the highest levels of client service.

The divisions of our business are as follows:

Private Equity

LaSalle is a global investment manager which only invests in real estate, bringing a unique focus and depth of expertise to the sector, where we pursue specific investment strategies across the risk-return spectrum (core, core+, value-add, opportunistic). LaSalle operates in 15 countries and 22 offices worldwide. As an independent subsidiary of Jones Lang LaSalle Incorporated (NYSE: JLL), one of the world’s largest real estate companies, we have a presence in every region of the world in which we invest.

Debt & Special Situations

Europe. LaSalle’s European Debt & Special Situations division pro- vides its borrowers with a wide range of financing solutions by actively investing through its four strategies: LaSalle Real Estate Debt Strategies, LaSalle Residential Finance, LaSalle Whole Loan Strategies and Special Situations. Debt products include whole loads, mezzanine, development financing, stretched senior loans, preferred/joint- venture equity in the UK and Western Europe.

US. LaSalle’s US debt platform is a commercial real estate bridge lender providing short-term, floating rate loans to middle-market commercial real estate sponsors. The group’s primary focus is on originating new bridge loans for value-add and transitional properties in sustainable growth markets throughout the US. Each transaction is underwritten with a bottom-up method through an equity owners’ lens making sure that all interests are aligned and there is a clear exit strategy.

Global Partner Solutions – Indirect Investing

LaSalle Global Partner Solutions (LaSalle GPS) offers investors access to global investment opportunities across the risk spectrum by partnering with expert real estate operators through a variety of indirect investment vehicles. LaSalle GPS is an open architecture investment platform that offers a range of opportunities across private, public, debt and equity quadrants, aiming to deliver durable, long-term income and attractive total returns through investments in funds, joint ventures, co-investments and secondaries.

Global Real Estate Securities

LaSalle’s Real Estate Securities programme gives institutional and individual investors a simple way to access the world’s traditional and niche commercial real estate sectors. With over 30 years in the industry, LaSalle is one of the most experienced real estate securities investment managers. Our dedicated team invests in real estate securities traded in North America, Europe and Asia Pacific for institutional and individual investors around the world, working closely with clients to design portfolios to suit their investment objectives and styles.

Sector forecasts

INDUSTRIAL: Industrial has been the best-performing major property type in the US and Canada with e-commerce driving demand. Absorption remained positive but was slower than recent levels, while supply held steady, with the net result being minor increases in availability (up 50bps in the last year). Smaller companies were reluctant to expand, while Amazon and other e-commerce companies drove new leasing activity as e-commerce sales surged. Industrial net asking rents are up 1.0% in the quarter and 6.3% year-over-year. Investor interest in industrial remains robust. Industrial was the only major property type to post positive 2Q NCREIF Property Index (NPI) total returns at 1.0% and continues to outperform with a trailing year total return of 10.3%.

OFFICE: Office in North America is subject to the greatest near-term and long-term uncertainty regarding demand and pricing both during and following the COVID-19 pandemic. A cyclical slowdown has already impacted fundamentals with US office vacancy increasing by 70bps to 13%. This is due largely to negative demand with net absorption at negative 21.5m sq ft in 2Q. As is typical during recessions, sublease space is a major driver of this demand decline. US gross asking rents are only beginning to move lower, but concessions are up, with a 4.4% increase in tenant improvement allowances and a 35% increase in free rent since March. US NPI office returns are also slow to adjust, with office negative, but are still leading the overall NCREIF Property Index (NPI) on a trailing year basis with a 3.97% total return as of 2Q 2020. 

RESIDENTIAL: Apartments in the US were quickly and immediately impacted by the COVID -19 pandemic, but are already seeing signs of a recovery. There has been a strong divide in performance with suburban, lower-density apartments outperforming apartments in dense, urban locations. As of 2Q US apartment vacancy was up 60bps to 4.5% and effective rents were down 1.0% as of June. While some markets are seeing continued positive rent growth, some of the urban markets are seeing sharply negative rent changes. Rent payments for US apartments have been durable despite concerns at the start of the pandemic. Investor interest in suburban apartments remains strong, but transaction volume in the harder hit urban markets has been more limited. NPI apartments have seen value declines, but outperformed the all-property average, with a trailing year total return of 3.0% as of the second quarter.

RETAIL: Retail has been the hardest hit property type in North American by the COVID -19 pandemic as many service-oriented businesses have been closed or have had significant restrictions placed on their operations. Even as many goods retailers are able to re-open, the shift to e-commerce has weighed on sales of some businesses. Store closures and bankruptcies are starting to weigh on fundamentals, with varying impacts by segment. Indoor malls in the US are the most impacted while grocery-anchored retail centres are among the more durable. Rent payments were severely impacted during the shut-down phase of the pandemic, but have been recovering even if they are not yet back to normal. Investment activity in retail is very limited as uncertainty around rent-rolls persists. Retail returns have severely lagged the NPI with trailing year total returns of –2.8% for open-air retail and –8.1% for malls.

Investment principles & strategy

Clients come first in our business and we use our fiduciary experience combined with our global scale and connected operating platform to deliver competitive performance. Our many long-standing clients trust LaSalle and often invest in multiple mandates with us around the globe. Our global research team and the experience of our fund managers, coupled with our ability to execute deals and actively manage assets, allows us to seek out robust returns for our clients.

LaSalle’s in-house proprietary research gives our clients unique insight into global property markets. We invest heavily in market analysis and investment strategy, believing that a deeper understanding of market dynamics directly influences our ability to deliver competitive investment performance. The strength of the integrated relationship between research and investment teams is vital in generating ideas and investment opportunities for clients.

Our Research & Strategy team identifies opportunities in the market, as well as develops client-specific strategies, providing direction to the investment teams, whose knowledge and network of contacts ensure LaSalle access to both on-market and off-market opportunities.

Performance verification

LaSalle internally calculates asset and fund level performance according to the NCREIF/PREA Performance Measurement & Risk manual and guidance. LaSalle internally conducts a quality control and trend analysis process on a quarterly basis before considering any performance finalised to disseminate. LaSalle measures its US client investments according to the mandate directed benchmark, which are typically, but not limited to the NCREIF Property Index or the NCREIF Fund Index- ODCE. LaSalle’s Canadian investments are measured against various MSCI Canadian regional benchmarks as appropriate to each mandate.

Global Partner Solutions

Majority of the mandates are benchmarked against MSCI IPD All Balanced Funds index, according to client/mandate requirements. However, a number of mandates are using target returns of either an absolute target return or targets in line with RPI and/or INREV indices. LaSalle GPS performance is currently calculated by Lasalle in line with MSCI methodology.

COMPLIANCE STATEMENT

The information contained herein is for the sole purpose of providing general information to institutional investors about LaSalle Investment Management and its affiliates. Certain information herein sets out general views of LaSalle Investment Management regarding certain property markets and types of property therein. No representation is made concerning the accuracy of the information compiled herein, and no guarantee or assurance is given that any forecast or opinion in these materials will be realised. For the avoidance of doubt, the information contained herein is not investment advice and may not be construed as the promotion or marketing of any services or financial product sponsored or provided by LaSalle Investment Management or any of its affiliates. Securities offered in the United States through LaSalle Investment Management Distributors, LLC, a member of FINRA/SIPC.