Just over a year ago, in March 1999, our company officially came to life through the merger that created Jones Lang LaSalle. In the intervening 12 months, my colleagues and I have enjoyed ö and on occasion endured ö a range of feelings: pride, disappointment, encouragement, and above all, optimism and enthusiasm.

We are proud of the company we have built in our inaugural year: a truly global real estate services firm and investment manager equipped to serve our clients as a single source of integrated solutions that address their comprehensive real estate needs. The vision that inspired the creation of Jones Lang LaSalle has now been tested in our marketplace and awarded high marks by clients throughout the world. These results take the form of new and expanded business relationships that we believe could never have come our way had we not recast our operations through our merger.

At the same time, however, we were profoundly disappointed when we seriously underestimated the complexity of integrating our operations and right-sizing the infrastructure of our new company in the Americas. The process consumed more resources and management attention than we anticipated and contributed to the downward revision in earnings expectations we announced in the third quarter of 1999. In retrospect, we can point to shifts in U.S. market conditions as well as issues associated with combining three major companies simultaneously that contributed to the difficulty. We have no excuse for the fact that the situation took us, and our shareholders as a result, by surprise. It was a one-time event that we do not plan to repeat.

We were encouraged when, as soon as we understood the severity of the problem, we moved aggressively and tenaciously to resolve it, identifying and implementing a range of initiatives to improve operating performance and capture major cost efficiencies in our Americas region. Based on progress achieved on our cost-reduction program in the fourth quarter of 1999, we now expect to secure $15 million of savings in 2000 and total annualized savings of $20 million beginning in 2001.

As a result, we look to the future with a sense of optimism and enthusiasm. Thanks to the hard work and dedication of our colleagues around the world, we completed 1999 with an exceptionally strong fourth quarter, and with the integration of our Americas operations essentially complete, we have entered 2000 with excellent momentum and good prospects across our business lines.

For 1999, we reported adjusted pro forma earnings of $1.07 a share, seven cents above our revised target. Our plan for 2000 reflects recovery in our Americas operations, plus continued strong performance in Europe and Asia Pacific, and in our global advisory and hotels businesses, LaSalle Investment Management and Jones Lang LaSalle Hotels.

Finally, even as our new organization was rigorously tested in 1999, we did not let our attention drift from our most important priority and the ultimate source of long-term success at Jones Lang LaSalle: we never lost our focus on, and our commitment to serve, the comprehensive real estate needs of our clients. In the photographic essay that precedes this letter, several of those clients graciously agreed to share their observations of working with our firm, and we thank them for their contributions.

We remain convinced that, if we always put our clients' interests first, and if we consistently support, respect and challenge our people ö who, collectively, comprise the human and intellectual capital that is our company's most valuable resource ö we will serve our shareholders most effectively and responsibly over the long term. That remains our goal for 2000 and the years to come.

As reflected in our Selected Financial Data, for 1999 we reported pro forma revenue of $813.9 million, adjusted pro forma net earnings of $32.3 million, or $1.07 per share, and adjusted EBITDA of $112.2 million. These adjusted pro forma results include the operations of the Jones Lang Wootton companies from the beginning of 1999 through the closing date of the merger, and exclude the non-recurring transition and integration costs and non-cash compensation expenses associated with the Jones Lang Wootton merger and the COMPASS acquisition. Given our commitment to realize maximum value from acquisitions by fully integrating them with our existing operations, management believes that operating results, exclusive of merger related charges, offer a meaningful measure of performance for our shareholders.

We reported an actual net loss of $94.8 million in 1999, which is a loss of $4.20 per diluted share, compared to actual net earnings of $20.5 million, or $1.25 per diluted share, in 1998. The 1999 actual results were substantially negatively impacted by the inclusion of $101.6 million of non-cash compensation expenses associated with the issuance of shares pursuant to the merger with Jones Lang Wootton. In addition, in 1999 we incurred $49.8 million of transition and integration costs associated with the merger and the acquisition of COMPASS. We will incur the remainder of the non-cash compensation expense associated with the Jones Lang Wootton merger in 2000; however, we do not anticipate incurring any additional integration and transition costs in 2000.

The businesses of Jones Lang LaSalle are organized into five operating segments: three geographically defined regions of Owner and Occupier Services, plus two globally organized businesses, LaSalle Investment Management and Jones Lang LaSalle Hotels.

Owner and Occupier Services In 1999 and the first quarter of 2000, generally strong or improving economic conditions in markets throughout the world contributed to new opportunities in our Owner and Occupier Services in the Americas, Europe and Asia Pacific regions.

Americas The continued strength of the U.S. economy has kept supply and demand fundamentals strong across major American markets, producing strong business backlogs in most of our businesses as we entered 2000. For example, we significantly expanded our existing relationship with McDonald's Corporation, a long-standing client for Tenant Representation and Corporate Property Services. In 1999, McDonald's engaged our Project Management specialty and retained our Retail business for a major project, moves that we believe will have a substantial financial impact this year. At the beginning of 2000, our Retail professionals also assumed management and leasing responsibility for five Lend Lease retail properties, totaling more than three million square feet of space, in markets from Florida to Oregon.

U.S. markets are generally in mature stages of the real estate cycle, however, leading us to conclude that one of the greatest growth prospects in the region in 2000 is likely to be found in Latin America. We have already taken advantage of this trend. In addition to expanding our relationship in the United States, for example, EDS has also awarded us new responsibilities in Mexico and Brazil. As a result, we currently support EDS in 12 million square feet of space throughout the Americas. Citibank expanded our Corporate Property Services responsibilities to include 1.1 million square feet in Brazil and, more recently, added another one million square feet of property in Panama, Colombia and Venezuela.

Over the years, one of our strongest growth generators in the Americas has proved to be the strategic alliance relationships we develop with major corporate occupiers. These partnerships, which often originate as a single assignment in a discrete area of our business, serve as a ãport of entryä for our firm and eventually expand into relationships in which clients look to Jones Lang LaSalle to deliver the full spectrum of services across their real estate portfolios. By the end of 1999, our roster of strategic alliance and preferred provider relationships had grown to 40 clients with the addition of seven new relationships during the year. We also expanded our activities with existing alliance clients, most notably Bank One, where total portfolio responsibilities increased to 29 million square feet from seven million square feet.

As we continue to seek new markets and competitive opportunities in the Americas business, our Strategic Consulting operation deserves praise for its role in sourcing innovative business activities for our other businesses. Working in partnership with Land Services professionals, for example, Strategic Consulting was retained by the U.S. Department of the Army to investigate the feasibility of privatizing the residential real estate at American military installations.

Europe Throughout our European region, expanding national economies are driving continued growth in all areas of our operations. We believe Europe offers substantial new business opportunities for 2000.

Germany is in particularly strong shape today, for example, and Jones Lang LaSalle is well-situated to take advantage of opportunities in the German market. In 1999, Jones Lang LaSalle emerged as the number one commercial real estate services firm in Germany in terms of both revenue and the total value of completed transactions, an unprecedented achievement for a non-German enterprise. As evidence of our strength in Germany, we were recently awarded major new business assignments from Deutsche Telekom for advisory and disposition initiatives for a large portion of the telecommunication company's $11 billion property portfolio.

In the United Kingdom, we were awarded new property and tactical management assignments for 50 properties with a capital value of $1.3 billion on behalf of Hermes, the British Telecom and Post Office pension fund manager.

In Scandinavia, our new property management company, Jones Lang LaSalle Asset Management Services AB, was officially launched on January 1, 2000, immediately establishing us as one of the leading real estate services firms in the Nordic region. This joint venture with Skandia Fastighet AB, the real estate subsidiary of Sweden's leading insurance company, has as its initial responsibility the management of Skandia's 2 million square meter ( 21.5 million square foot), $2.4 billion property investment portfolio. Our plans for the new venture also include generating opportunities for acquisitions, dispositions, project management and third-party leasing assignments throughout Scandinavia. The new enterprise is owned 55% by Jones Lang LaSalle and 45% by Skandia Fastighet, with Jones Lang LaSalle reserving the right to acquire the entire business after three years.

Finally, we continue to expand our European operations to extend our local market presence and take advantage of new and emerging opportunities. In 2000, we plan to open a full-service office in Lisbon, Portugal, and strengthen our presence in Italy by establishing an office in Rome to complement our existing operation in Milan.

Asia Pacific We recently reorganized our former Asian and Australasian operations into a single Asia Pacific region. The decision to consolidate was driven by our desire to identify and capture efficiencies in the regional infrastructure, to promote improved sharing of best practices throughout the region, and to speed the development and delivery of products and services to our clients in Asia.

Early in 2000, the region represents a study in contrasts as different markets recover at different speeds from the effects of the Asian financial crisis. Australia, which experienced little, if any, fallout from the crisis in the region, continues to reflect a particularly strong real estate market. Already in 2000, Jones Lang LaSalle has been awarded major new or expanding leasing and management responsibilities in Australia by the Retail Employees Superannuation Trust, British Telecom and AMP Asset Management.

Recovery has been strongest in Singapore, where economic growth is expected to exceed six percent in 2000. We were recently retained to sell the 100,000 square foot Eastern Mansions property in Singapore and were also appointed to provide corporate property services for Failsafe and Sun Microsystems at their facilities in Singapore. Reviving real estate activity is also being felt in Hong Kong, where four percent annual growth in gross domestic product is predicted for this year. Following the 1999 completion of the last of four luxury residential acquisitions for Global Realty Advisors, our Hong Kong office was retained for leasing, property management and additional responsibilities for this project.

The restructuring process is proceeding more slowly in Japan, where the economy continues to stagnate. Still, a round of mergers and new legislative initiatives suggest that enhanced prospects for improved business opportunities in the market are on the horizon in Japan. To position Jones Lang LaSalle to take advantage of such opportunities, we are currently expanding and strengthening our presence in Tokyo.

South Korea represents another economy that is struggling to right itself in the wake of the Asian crisis. Given the fact that many of the multinational companies that represent key prospects for our services are establishing or expanding a presence in Korea, and our belief that the Korean government is taking serious, if at times halting, steps to open its economy to global competitors, we plan to establish an office in Seoul by the end of this year.

LaSalle Investment Management Capitalizing on the generally favorable global economic environment, LaSalle Investment Management ö the world's second-largest manager of real estate equity investments ö produced strong results in 1999 and is optimistic about its opportunities and prospects in 2000.

We successfully launched and funded two new investment products last year. Income & Growth II, a new U.S. private equity commingled fund, received commitments during the year that translate to more than $220 million in buying power. A target of securing $150 to $200 million in additional funding has been set for the first half of this year. Three properties have already been acquired for the Income & Growth II portfolio.

Our new Euro5 Fund also celebrated its first closing in 1999. With leveraging, LaSalle Investment Management expects to acquire assets valued in excess of 200 to 250 million euros by midyear. This diversified, value-added investment vehicle focuses on office, business park, retail and industrial properties in areas with above-average growth in France, Italy, Portugal, Spain and Germany.

Total investment capital raised around the world reached $2.9 billion in 1999. Total transaction activity in our direct equity business exceeded $3.3 billion. And, for the sixth year in a row, LaSalle Investment Management recorded a net gain in new client relationships, attracting leading investors on both sides of the Atlantic. The list includes the Boston Retirement Board, The John D. and Catherine T. MacArthur Foundation, the Board of Pensions Evangelical Lutheran Church in America, Gothaer Versicherungsgruppe, Unibra S.A. and Stichting Bedrijfspensioenfonds voor de Bouwnijverheid.

Finally, during the year, our application for Approved Fund Manager status was approved by the Monetary Authority of Singapore. This marked the completion of the first major step in our plan to build a thriving investment management operation to serve clients in the Asia Pacific region.

Jones Lang LaSalle Hotels Our hotel professionals also benefited from the effects of strong global economic conditions during 1999 and anticipate continued growth in 2000 as a result. Asia, in particular, where the hotel sector has been stuck at the bottom of the market cycle for the past two years, is showing signs of renewed tourism growth and a return to profitability. Early evidence of this trend can be found in the sale of the Seoul Hilton by Jones Lang LaSalle Hotels. The sale, completed for nearly $230 million late in the fourth quarter of 1999, represented the largest property transaction in Asia in many years.

Other 1999 highlights were numerous hotel sales across the world including the Hotel Nikko at Beverly Hills, Crowne Plaza Vienna, Hyatt Istanbul, Observatory Hotel Sydney and the Vail Athletic Club in Vail, Colorado. Our hotel advisory division had its strongest year yet, concluding with what is believed to be the largest global appraisal undertaken for a hotel chain owner.

Jones Lang LaSalle's Owner and Occupier businesses are particularly well-established in the United States, the United Kingdom, Australia and parts of Asia. Year after year, the services we provide in these ãmacroä markets generate the foundation of our success in terms of revenue and earnings. At the same time, however, each tends to be in a relatively mature stage of the real estate market cycle today.

But within each of our three operating regions, there are also newer, less mature markets that hold potential for higher near-term growth: South America, continental Europe and selected markets in Asia Pacific. To take advantage of these nascent opportunities, we are working to take the skills, experience levels and best practices we have developed over the years in our leading, but more mature, operations and transfer them to the high-growth geographies we have identified.

We are currently working to export U.S. expertise to South America. We have allocated UK resources to take advantage of the rapid growth in new business opportunities we have identified on the European continent. And our decision to consolidate operations in a new Asia Pacific region was driven, in part, by the desire to utilize our depth of experience in Australia to support new business initiatives throughout Asia.

In our investment management business, we believe that the increasing willingness of investors to consider investment opportunities beyond their own boundaries represents a real and growing source of new business opportunity. We find that U.S. and UK investor groups, in particular, have begun to participate in the global search for maximum returns that has been the traditional preserve of Canadian, Dutch, Middle Eastern and Asian investors.

At LaSalle Investment Management, raising capital in one country for investment in another has emerged as a key driver of business success. In 1999, our cross-border investment activity totaled $574 million of equity and represented 20% of all capital raised during the year. As recently as 1995, cross-border capital accounted for less than 1% of the total.

Jones Lang LaSalle invests in and relies on comprehensive top-down and bottom-up research to support and guide our development of real estate and investment strategy. Our Global Research Committee oversees and coordinates the activities of the more than 150 research professionals who cover market and economic conditions in 36 countries around the world. We produce more than 100 research publications annually, including Property Futures, a new semi-annual journal of strategic thinking for real estate owners and occupiers. Research will also play a key role in our new, company-wide intranet, keeping colleagues throughout the Jones Lang LaSalle organization attuned to important events and changing conditions in world markets.

Our technology strategy at Jones Lang LaSalle is based on a single premise: we are committed to the development of an open and advanced technology platform that promotes and supports the real estate and broader business objectives of our clients.

Our e-business strategy is built around the simple concept ö and complex process ö of connecting our employees with each other via our intranet, and using our intranet and extranet to make it easier for our clients to do business with us. Today, we are in the final stages of implementing a global data network, a reliable, high-speed system that will enable clients and employees around the world to communicate with each other efficiently.

We plan to tap the power of the internet to aggregate purchases in our managed property portfolio; to invest in software applications for our Project Management and Development Management businesses; to expand the use of electronic auction sites, with an initial roll-out scheduled for the United Kingdom; and to offer clients online access to portfolio performance data, an initiative planned to debut in Australia.

On the telecommunications front, we recently finalized six months of research to create best-in-class telecommunications products for our clients. There is, for example, an opportunity for our investment clients to benefit from new technologies and the demand for high-speed networks by rewiring their buildings to provide the fastest possible delivery of telecommunications services to their tenants.

As we reach decisions and launch technology and e-business initiatives, we are working closely with many pre-IPO ãdot-comä companies. Our strategy is to make real investments in relevant companies to shape the products and services they deliver. We completed our first investment in February 2000, joining forces with eLink Communications, Inc. to deliver a suite of voice and data, wired and wireless telecommunications services to our clients. We believe the technology will help attract and retain office tenants while creating new revenue sources for building owners. In addition to our equity investment, we are also sharing our experience and knowledge base with eLink — as we will with other technology partners — through consulting and advisory agreements.

As the size and scope of our operations continue to grow, fundamental limitations of time and space make it impossible to recognize the important contributions made by our employees, day in and day out, that determine our collective success as a firm. Given 1999's events and excitement, pressures and moments of turmoil, I would like to offer all our people special thanks for their hard work and superior performance, their commitment and motivation, their resilience and unrelenting good spirits throughout the year.

Today, as we focus our attention and resources on the remaining months of 2000 and the years to follow, Jones Lang LaSalle is moving forward with accelerating momentum in all regions of the world and in all parts of our business. The global platform we have established and integrated, our expanding client relationships, and our unique ability to serve those clients as a single-source provider of comprehensive real estate services position us well for the future. We believe these factors also will translate into increased shareholder value. And that, in the end, is why we approach the future with such energy and optimism.

Sincerely,

Stuart L. Scott
Chairman and Chief Executive Officer
March 2000