Q4 2020 Newmark Group Inc Earnings Call
Ladies and gentlemen, thank you for standing by the conference will begin shortly please continue to hold and thank you for your patience.
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Good morning, My name is Matt and I'll be the conference operator today at this time I would like to welcome everyone to the Newmark fourth quarter 'twenty 'twenty earnings Conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero. After today's presentation, there will be an opportunity to ask questions.
<unk> task a question you May press Star then one on a touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the call over to Jason Harps V. P of Investor Relations. Sir you may begin when you're ready.
Thank you and good morning.
We issued our fourth quarter and full year 2020 financial results press release, and a presentation presentation summarizing these results this morning.
Provided on today's call compare only the fourth quarter of 'twenty 'twenty your earlier period, unless otherwise stated.
And your fingers with respect to cash flow from operations discussed on today's call refer to net cash provided by operating activities, excluding loan originations and sales we.
We will be referring to our results on this call only on an adjusted earnings basis, unless otherwise stated when.
We may also refer to adjusted EBITDA. Please see today's press release for results under generally accepted accounting principles or GAAP.
Please see the sections in the back of today's press release for the complete definitions of any such non-GAAP terms reconciliations of these items to the corresponding GAAP results and how when and why management uses them.
Additional information with respect to our GAAP and non-GAAP results mentioned on today's call is available on our website and in our investor presentation.
Any outlook discussed on today's call assumes no material acquisitions share repurchases or meaningful changes in the company's stock price.
These expectations are subject to change based on various macroeconomic social political and other factors, including the COVID-19 pandemic I also remind you that information on this call regarding our business that are not historical facts are forward looking statements within the meaning of section 27 day of this of the Securities Act of 1933 as amended and section 21 E Securities Exchange Act of 19.
34 as amended such statements involve risks and uncertainties. These include statements about the effects of the COVID-19 pandemic on the company's business results financial position liquidity and I'll book, which May constitute forward looking statements and are subject subject to risks.
But the actual impact may differ perhaps materially from what is can be expected.
Except as required by law Newmark undertakes no obligation to update.
Any forward looking statements for a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward looking statements see Newmark Securities and exchange Commission filings, including but not limited to the risk factors set forth in our most recent form 10-K form 10-Q or form 8-K filings with.
With respect to the NASDAQ earn out the number of shares received by Newmark will depend on the timing of the closing of Nasdaq's recently announced sale of its U S fixed income business and NASDAQ stock price at the time NASDAQ has stated that the closing is subject to the satisfaction of customary closing conditions, including the receipt of required regulatory approvals Newmark can provide no assurance as to when or if the close.
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Now happy to turn the call over to our host Barry Golf's I'm CEO of Newmark Group, Inc.
Thank you Jason.
Good morning, and thank you for joining us for New March 4th quarter 2020 Conference call.
Joining me virtually on the call today are new marks Chief Financial Officer, Mike <unk>.
Our Chief strategy Officer, Jeff Day, and our Chief revenue Officer Lou Alvarado.
New March 2020 results demonstrate the resilience of our commercial real estate services platform.
We reported record quarterly revenues and valuation and advisory capital markets and mortgage banking.
Our capital markets and debt volumes totaled $32 billion.
In 2020, Newmark gained 192 basis points of market share in U S investment sales and improved its ranking two third overall.
We also gained 83 basis points in our GSE originations business and ranked fifth overall NIM.
<unk> leadership position in alternative property types, such as life Science seniors housing medical office self storage and student housing helped propel our record setting capital markets performance.
We continue to focus on the growth of our recurring revenue businesses, such as evaluation advisory mortgage servicing global corporate services and property management. We recently hired a head of global corporate services to expand this critical offering for occupiers as they formulate their plans.
We're returning to the workplace.
Additionally, we continue to expand our presence in key growth markets that are benefiting from demographic tailwind.
Based on this strong foundation, we have built newmark expects to outperform as industry volumes recover.
Newmark recently acquired all of the first and second lien debt of <unk> on.
On January 31, we announced an agreement to provide approximately $20 million of debtor in possession financing and acquire the assets of Novatel through its chapter 11 sales process, we believe that co working and flexible offices will be an increasingly important offering to owners and occupiers.
In the post pandemic world.
Newmark financial position is strong and Mike is going to discuss the NASDAQ transaction in a minute.
But I would like to point out that we generated more than $100 million of cash from operations and paid down $200 million a day.
In the quarter with that I'm happy to turn the call over to Mike.
Yeah.
Thank you Barry and good morning.
Commercial real estate services industry and certain of Newmark businesses were adversely impacted by the COVID-19 pandemic in the fourth quarter and full year 2020.
Which resulted in lower transaction related activity.
Our revenues declined four 9% $601 $4 million.
Capital markets revenues increased by 15, 3% led by investment sales.
Our investment sales business gained 192 basis points of market share in 2020.
Gains from mortgage banking increased 103.2%.
Overall, newmark GSE market share increased by 83 basis points from 'twenty 'twenty.
Management services servicing fees, another rose three 7% driven by higher valuation and advisory fees and pass through revenues.
These recurring revenues represented 33% of our total in 2020 up from 28% in 2019 as we continue our focus on growth.
Our leasing revenues declined 45 per cent.
This was largely a result of our significant presence in large urban markets, such as New York City on this.
San Francisco Bay area.
We anticipate leasing will remain challenged until there's greater clarity around the return to the workplace.
But we believe that demand will accelerate in these markets as the pandemic subsides.
Moving on to expenses.
Total expenses decreased in the quarter, reflecting lower commissions and other operating expenses due to cost savings initiatives.
These declines were partially offset by increases related to the quarterly timing of recruiting costs and higher pass through expenses.
For 2020, our expenses declined 12, 2%, reflecting lower variable compensation and the company's cost savings initiatives.
These actions will result in approximately $60 million of permanent savings in 'twenty and 'twenty one.
The company's claim further reduce its expense base by $15 million by the end of 2021, resulting in total permanent savings of $75 million or 10, 5% of our pre pandemic expense base.
Turning to earnings.
Adjusted earnings per share with 30 down $43 four per cent and adjusted EBITDA was $112 $9 million down 34.3 per cent.
Moving on to the balance sheet.
Newmark generated $112 $4 million of cash flow from operations in the fourth quarter and repaid $200 million on our revolving credit facility.
We maintained strong liquidity and credit metrics.
As of December 31, we had $191 4 million of cash and cash equivalents and $325 million of availability on our revolver.
Our net leverage ratio was one four times at year end.
Our balance sheet does not yet reflect the NASDAQ earn out.
On February 2nd NASDAQ announced that it entered into a definitive agreement to sell its U S fixed income business.
The closing will accelerate newmark receipt of NASDAQ shares a portion of which will be used to offset the remaining balance from the company's 2018 monetization transaction.
On a net basis Newmark estimates that it will retain approximately 5 million shares of NASDAQ stock.
Worth $723 $5 million as of yesterday's closing price.
If as expected.
<unk> has accelerated into 2021.
He will exclude the NASDAQ earn out from adjusted earnings and adjusted EBITDA and recast historical results for enhanced comparability.
Our near term capital allocation priorities are to return capital to stockholders through share repurchases.
And to invest in growth and margin expansion at attractive returns.
We also intend to pay down our revolving credit facility.
Newmark plans to continue its dividend and distributions at or near current levels through the balance of 2021.
After review of these priorities Newmark board of directors yesterday increased our repurchase authorization.
$400 million.
Newmark is not providing specific earnings guidance for 2021 due to current market uncertainty. However.
We expect U S capital markets volumes to improve based on elevated multifamily life science and industrial activity.
We expect GSE originations to remain strong.
We anticipate leasing activity will remain challenged until there is greater clarity around the return to the workplace, but we believe demand will accelerate as the pandemic subsides.
Just on these factors, we expect to generate double digit revenue growth in 'twenty and 'twenty one.
We executed cost savings initiatives in 2020, which will result in approximately $60 million of permanent savings in 2021.
The company is further planning to reduce its expense base to achieve an additional $15 million of savings by the end of 'twenty 'twenty one.
Resulting in total permanent savings of $75 million.
This represents a 10, 5% decrease from our pre pandemic expense levels.
We anticipate adjusted EBITDA margins will expand to above 20% in 2021.
And while we expect improvement in adjusted earnings and adjusted EBITDA in 2021 year over year comparisons in the first quarter will be challenging because our first quarter 2020 revenues were relatively unaffected by the pandemic, which was declared on March 11 2020.
I would now like to turn the call back to Barry.
We have built a company that has remained strongly profitable during a period of intense difficulty.
Throughout the year Newmark generated substantial cash flow and further strengthened its balance sheet.
We've captured market share in a number of our major business lines I.
I am so proud of our team and while we have accomplished in 2020, operator, we'd like to open the call for questions.
Okay.
We will now begin the question and answer session to ask a question you May press star one on your Touchtone phone.
If you're using a speakerphone please pick up your handset before pressing the keys.
Anytime you question, that's been addressed and you would like to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
Okay.
Our first question comes from Alexander Goldfarb from Piper Sandler. Please go ahead.
Hey.
Good morning, good morning, Barry.
Hi, Good morning, So first obviously really strong on the capital markets and mortgage so.
Kudos to you and the team Kudos result.
Let me just.
Just a few questions here first on the NASDAQ proceeds of 725 million is that I guess, a two part question here. One should we think about you guys you know forgetting $725 million in cash right away or your view is that you'll get the share that you'll sell them overtime.
Jim.
Okay.
Yeah, Hey, Alex it's Mike we will get the shares the shares will be unrestricted.
And then it just depends on you know, how we monetize them into cash over time we.
We could certainly.
Borrow against them as we have them on our balance sheet. So we think we'll have the liquidity access immediately once we receive the shares.
Okay, but presumably you know Mike you guys arent going to be kind of like a doc broker in and have the share. It is an investment the shares are being viewed as at the monetization or you guys actually looking at the share to something like a NASDAQ is a great company, we want to be a shareholder value.
Yeah.
Well I think you you see we have uses for the capital we've announced a bigger stock buyback program.
We're seeing a lot of opportunity to continue to invest in the business.
So we we have uses for the capital and we want to continue to invest and grow the business we're not.
We think NASDAQ is a great company that is true.
But we do have uses for the capital.
From a tax perspective.
Is it doesn't matter if the tax triggered when you guys get the shares or when the shares are converted to cash.
Sure. The the trigger is when we receive the shares.
But remember Alex we have a really favorable and unique corporate structure.
Which allows us to.
Use our our stock and our units.
To generate taxable deductions.
So we think the tax payments.
Against the NASDAQ income will be relatively minor.
We can use that capital to go do all the things, we talked about which are buying back stock.
And investing at attractive returns.
Okay and then the second question is I know tell what are sort of your long term plans for that.
Is it just sort of a short term because youre investor you want to sort of help right size them and then exit or is this a new business line that youre that youre going to get involved with.
Yeah.
For starters, we don't own it there was a bankruptcy process, where the stalking horse bidder.
We believe in the co working and flex working space generally over the long haul that is this is not this is going to be part of the entire narrative.
In fact.
Certainly, but we don't own it yet.
So we'll see how she how that plays out.
Well, we think there is there is a natural fit in terms of our infrastructure and its infrastructure and it could be a service to our owners and our clients.
Okay, So barrick to that point and more specifically on the on your on the building owners. So you don't see it as a conflict where you'd be competing for tenants with them you see it as complementary where you'd be having the hotel space in your landlord buildings, where it sort of helps them was space that they may otherwise.
Struggled beliefs is that is that how we should think about it.
Just the opposite we see it as a benefit.
Good afternoon.
Okay cool listen thank you.
Okay.
Our next question comes from Jade Rahmani with K B W. Please go ahead.
Thank you very much and congratulations on the impressive results, particularly in capital markets.
To start off with just a finer point on the NASDAQ sale.
I think most investors had been projecting.
Organic growth in NASDAQ. So they were looking at between 'twenty and 'twenty, three and 'twenty 'twenty seven during which you would receive.
Annual.
Share proceeds and so projecting forward.
Growth in NASDAQ stock price, and then discounting that present, implying an NPV.
So as we compare that to the.
700, plus 723 million of proceeds you expect.
We were we were assuming a tax against that so when you say relatively minor payments on a tax basis does that imply new share issuance.
I just wanted to make sure I'm not.
Double counting or overlooking any potential.
Differences between my NPV estimate and the $723 $5 million in proceeds.
The company expects.
Sure how are you doing James and thanks for the question.
There is no new share issuance.
Our shares and units that are already outstanding.
Which generate either deferred tax assets that sit on our balance sheet.
Or.
Just haven't been.
Taxed at all or created or taxes.
The deduction for the company remember the units and the shares we issue are more largely compensatory.
So they are tax deductions for for Newmark.
And as those units convert into stock comp.
Company could take the tax deductions and we believe we can largely offset the income.
From the receipt of the NASDAQ shares.
Okay.
Okay. So in terms of accretion relative to I know recently, you've been providing a book value estimate, but I guess relative to People's N V estimate or estimate of fair market value.
For Newmark, we should be taking that full $723 5 million I think my prior net present value estimate with somewhere in the $525 million range. So.
In excess of 200 million from that pull forward does that seem reasonable to you.
I wouldn't say the full amount, but I would say a large part of it.
Which we can then use to you.
Execute on the part of our share buyback program.
Okay.
Great well I think certainly that's a very positive development for the company in terms of potential reduction and leverage reduction risk it should be accretive to the company's multiple so good to see that happen in terms of capital allocation opportunities. When you have this cash how do you expect to deploy it in terms of mix up.
Share buyback growth opportunities as well as reduce leverage should we should we assume that there is an equal weighting to all three of those or is there. Some nuance you could put on that.
Sure maybe I'll start with the leverage we do expect to pay down the revolver.
It doesn't make sense to pay.
Pay off the 550 million bond, it's just too expensive at this point.
Given it doesn't mature until 2023, and there's fees and penalties associated with that.
The I think you know how much we investing growth capital, we certainly have announced a large share buyback program.
And we'll have to see what the opportunities are in the market.
We're still looking to invest at attractive returns and so when we see those opportunities will.
We will have the capital to certainly go invest and continue to build our EBITDA and grow our business.
Thanks, very much in terms of the overall market I think that our investment sales volumes fell by about 19%.
Year on year, you know we've seen jail I'll report, we've seen Walker Dunlop reported a GSE multifamily seems like multifamily is doing extremely well industrial surging life Sciences surging office.
A laggard, but in terms of newmark as one business and the positive growth rate you posted 15% which is a.
Actually above what we projected what were the main drivers were there effects of prior M&A or do you really believe on an organic basis, the 15% is.
Now what the company delivered any nuance you can put around that would be helpful.
Yes.
We've spent the last five years.
Hiring talent.
So we have a lot of the talent that we are a relatively new over over the last couple of years are beginning to realize and normalize their capacity to perform.
We continue to we continue.
We've established ourselves as a major player in the capital markets business.
We've elevated our brand with respect to institutions portfolios.
Enterprise.
Sales. So we think there's a good runway for us to continue to do that and as our.
As are all of the talent congealed into this massive active enterprise in that space. We think we will continue to grow and build market share and that as the as the world normalizes.
We'll be a beneficiary of that I mean, there are there are certain food groups that we we.
We have to fill in the white space and as we continue to fill in the white space as they continue to be integrated into the the bigger broader platform, we think that as a collective.
It's just going to continue to get better and better.
Thank you very much and lastly, there's been a number of.
Media reports about potential.
Large scale M&A.
And the sector.
And Barry I know you've been in this in the sector since the seventies.
Having started the company.
And clearly have grown the business successfully what would be your interest in India as mergers of equals type transactions, which historically have not really created value per shareholders you.
Expect newmark to remain independent or do you have a strong interest in combining with another player.
That maybe has business lines that would be complementary or perhaps.
Provide economies of scale.
And the in the space.
Okay.
I really really wouldn't comment on speculation about any merger or acquisitions I would say that we have we truly believe in what we've built we continue to.
To acquire talent, we continue to be a more and more and ever increasing platform that will attract the talent.
As our brand elevate so we think theres a lot of runway in that but we're always we're always interested in protecting our shareholders and achieving the most value. We can and we are we are those share shareholders. So we're going to do what's best for us and the <unk>.
<unk>.
To continue to improve our value but.
This is a marathon.
And it takes there is a gestation period and building an enterprise that really works and we think we've demonstrated where we've focused on a particular food group and we've put together the pieces of the puzzle that we can we can demonstrate that we can create value and as such.
We will continue to build on our strength.
And we will continue to work on our weaknesses and we think that as as our brand improves even in those spaces, where we were not considered unnecessarily Peter will continue to get better.
Track more talent and grow as an enterprise, we think we have a lot of room to grow.
Thank you very much and taking the question.
Our next question comes from Rick Skidmore with Goldman Sachs. Please go ahead.
Good morning. Thank you Barry just following up on the investing for growth can you talk about.
Perhaps areas, where there's white space that youre looking at whether it be by business line or geography, or how youre thinking about in that investment for growth.
<unk>.
Paul.
We mentioned demographic tailwind.
It's well known that there is migration from a variety of low growth markets high tax markets.
So we're investing in those markets to grow our platform in those markets.
Southeast Texas.
Middle of the country et cetera, and.
And in terms of food groups, we just hired a new head of global corporate services, and we think that we.
We have a good runway in that.
In concert with the great talent that we have the tenant rep business.
P market transaction business, we we have we're increasing our offering and expanding our offering in that respect.
Lew you might have might have something to add to that.
I think.
In General also property management property management has been a big focus for us and it's been a good growth area force, particularly during these during the pandemic and we think will continue. So we you know a year ago restructured that in order to address the needs of our clients and better service them and so I think a combination of the growth engine.
Growth in property management.
And.
Growing true, where we're already strong.
Sales of White space and continue our organic growth that we have a plan for the company.
Thank you maybe just shifting to the cost reductions that you mentioned, the 15 million of permanent and by the year end of year 2021 can you talk about where those might be coming from and how you think of how you think that layers through 2021.
Sure.
No, it's really becoming more efficient in how we deliver service to the front end of the business.
Through use of technology artificial intelligence, just being smarter about our processes and our procedures.
We've grown.
More than 30 per cent per year for many many years, we've done a lot of acquisitions.
And you know I think the last year has given us an opportunity to step back and try and reorganize our processes and procedures and operations.
To deliver a better product at a lower price point.
And I think we started and we made a lot of progress in 2020, but we still have some more work to do and that's what the remaining $15 million.
Thank you.
Yeah.
Again, if you have a question. Please press Star then one our next question comes from Michael Funk with Bank of America. Please go ahead.
Yeah, Hi, good morning. Thank you for the question. So firstly, if I, if I could argue with focusing on the capital market.
Revenue, obviously, you know very good very strong quarter. There can you comment on the mix of buyers, either whether operators or financial buyers and it kind of took a ladder is that having an impact on the property management business.
Oh.
Wow.
The property minute management, but it certainly is impacted by capital markets the mix of buyers.
Got it.
They run the gamut money looks forward, so money anticipates, where things are going which is why we think that capital markets will come back and grow before some of the other business lines.
So all.
All of that is capital markets is as a lead in to property management.
And certainly other businesses.
Don't think it matters who is buying.
Okay.
Okay I appreciate it and then you commented on the on the renewal activity is picking up.
And in leasing, which makes sense more shorter term renewals can you comment on how that might impact leasing revenue in 2021, having a greater mix of renewals versus new leases.
Look throughout historically throughout any downturn.
Good brokers find ways of of.
Earning money during the downturns.
Difference in this time is companies don't exactly know and orange certain about what the footprint is going to look like.
Normally what happens in a downturn there is a reset in rents there's a reset in valuation there's a much more.
The much more of a resolved by owners to renew and the same resolved by tenants to extend and blend.
Their leases early.
Once there is clarity on what the workplace looks like.
And what remote working means to companies.
There is will be unquestionably an increase in activity because people will understand where theyre going and I think thats been the hold up and I think it will become much more clear as people are vaccinated. Once this once the pandemic is taking care of people will.
People will change and I think differently about how they want to occupy space.
Maybe one more if I if I could place so the allocation of capital I. Appreciate the color you gave about investing for growth as well as returning capital to shareholders through stock repurchases.
Focusing on investing for growth can you just walk us through maybe how wide of a range that investment might be in and the thought on timing I know you mentioned earlier about investing more in growth areas like the southeast and Texas from the middle of the country, but how large of a bucket of spending might that be.
Well I mean thats it.
Jeff.
Well I can tell you from from the from the brokerage side and from the property management in Gcs.
It's not so much the capital as it is us getting our platform and everybody working together and collaborating and presenting our platform for the clients. We think the opportunities are definitely there there's definitely some white space to fill from the standpoint of some talent in those markets, but I don't see those as huge.
Material numbers I see those more as finding the right people and creating the opportunity for them to join our firm.
And be able to prosper better with us.
So I don't.
It's not like we're looking at a large acquisition I think we're looking at more filling in in certain holes that we have.
Within the brokerage and within simple or other service lines.
Great. Thank you for the questions.
Oh, sorry. Please go ahead.
I think we did it.
She did a good job.
Okay. Thank you very much.
Our next question is a follow up from Alexander Goldfarb with Piper Sandler. Please go ahead.
Hey, and thank you for taking the question just going back to the cost savings of $75 million in total.
Is that all cash savings or are some of the savings is going to be realized in.
Fewer share issuances.
As part of the comp incentive just trying to get a framework for how we should think about the cost savings.
Yeah, I would say that it's a combination of our.
People.
Being more efficient around people.
Near shoring and off shoring opportunities.
And non comp.
Certainly looking at.
Vince <unk> and things of that nature.
There is some asset impairments we took in 2020.
Which will benefit our numbers going forward.
Assets that were no longer have any value.
Certainly some space consolidation as part of that but I would say, it's largely cash base and.
We think we'll continue to just look for opportunities to be more efficient and more effective in the product that we deliver.
Okay. So said differently historically the company has generated strong top line growth. That's GAAP, that's gotten neuter down at the bottom line basis. So will this sort of go to further address that and make the two in sync.
Or is this more things that'll be on the margin and overall, we're still looking at that sort of disconnect between sort of double digit top line, but then more single digit bottom line.
No. The objective Alex is that our incremental margins will follow the growth in the revenue.
So the bottom line will mirror the top line or maybe even outperformed the top line as the businesses come back.
Okay. Okay.
Good to hear obviously, we look forward to seeing that that outcome.
Mike.
Thanks, Alex.
Our next question is also a follow up from Jade.
Jade Rahmani with K B W. Please go ahead.
Okay.
Thank you very much and thinking thinking about the avenues that newmark has to maximize its value one potential asset is the GSE multifamily business does the REIT called Arbor, Realty, which bifurcated itself into a REIT.
That got a favorable tax treatment from the IRS on MSR I'm wondering if you consider the GSE multifamily lending business. Our long term core strategy that should be part of Newmark as a C corp, or if there is potentially.
An opportunity to sell that business or to sell an interest in the MSR that could create additional capital I would think if people are speculating about M&A from newmark.
There's a lot of low hanging fruit that can be addressed prior to pursuing some kind of merger.
That might be more accretive to shareholders.
Yeah.
Well, Jay if you look at our multifamily business you.
And you look at the evolution of the way that investors have become more institutional more global crossing.
Crossing multiple verticals the multifamily business is really inextricably intertwined with the overall capital markets and other businesses like property management et cetera. So while we're always interested in evaluating opportunities we do consider it a critical part of Newmark.
Thank you very much regarding the hotel if newmark is ultimately the winner of that.
Bidding.
Their anticipated costs in addition to the $20 million and dip financing.
That has been stated that newmark would provide.
Yeah not at this time Jade I think we just have to see how the bankruptcy plays out.
If we are the winning bidder.
We'll certainly talk about our plans for the business and our plans for capital allocation to the business.
If and when that happens.
Thank you very much for taking the questions.
Thanks Jade.
Our next question comes from Patrick O'shaughnessy with Raymond James. Please go ahead.
Right.
Yeah.
Pardon me Patrick your line might be muted.
Apologies for that good morning.
I was curious if we can get an update on your thoughts regarding international expansion, particularly in light of the expected improvement in Newmark liquidity.
Yes.
Obviously that is one big white space.
We have a relationship with Knight Frank.
To execute on our.
Our global platform for Gcs.
We do have.
Positions in.
Raising capital we have done a really good job around raising foreign capital.
Where we have offices in Dubai, we have other offices around the globe that are specifically hours.
So we've done.
We've done a pretty good job of establishing ourselves with all of the <unk>.
Foreign investors.
The world.
And we take a we were taking things out as we as we need to I mean, we still have white space.
In the Americas, and we're working on that each and every day and we're looking at opportunities.
Got it.
And as you're thinking about 'twenty 'twenty. One obviously you provided your outlook some of the more transactional businesses, if you're thinking about the non transactional businesses that at least in advisory and consulting and management services, where are you expecting and relative strength in 'twenty 'twenty, one and where are you expecting perhaps some continued.
Yes.
You know look.
What Jeff said is that all of our businesses work together.
Our appraisal or get our multifamily investment sales it all feeds on itself and we do I think we do a pretty good job of integrating all of the different food groups.
Work together.
Salting.
Supply chain logistics workplace strategy.
Site selection tax incentives.
Appraisal valuation.
Those kinds of things all work together, we think those are really good opportunities for us to growth.
Our appraisal business, we really started with one higher.
And we.
We now have 500 people in the U S and appraisal from from one higher and much of that was done.
Person by person team by team as well as some ex acquisitions. So we will continue to expand all of our consulting including property management.
How do we think is a good opportunity, but it also works in conjunction with the transactional activities because our clients want.
Our differentiated private product they want to be.
You have to provide value for them and in order to do that you have to provide those services and those are fee for services as well.
Got it and then last one from me.
Our servicing portfolio grew by 10% in 2020, that's a little bit above the typical pay.
Pace of growth over the last few years.
Would you expect that to moderate going forward into 2021 or do you think you can continue to grow the servicing portfolio at a high single digit low double digit rate.
Well, obviously look at the <unk>.
GIC caps it will be slightly more restrictive in 2021 than it was in 2020 based on some commentary from FHFA last week, having said that we've proven our ability to year after year grow market share in this space and so our expectation is that we will continue to outperform the market and grow the servicing portfolio a journey.
At the same place.
Great. Thank you.
This concludes our question and answer session I would like to turn the conference back over to Barry Carlson for any closing remarks.
I'd like to thank everyone for joining this call and we look forward to seeing you are hearing from you at our next quarterly call. Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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Okay.
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