Q2 2024 Newmark Group Inc Earnings Call

Operator: Good day and welcome to the Newmark Group second quarter 2024 financial results. As a reminder, today's call is being recorded. At this time, I'd like to turn the call over to Mr. Jason McGruder, Head of Investor Relations. Please go ahead.

Operator: Good day, and welcome to the Newmark Group second quarter 2024 financial results. As a reminder, today's call is being recorded.

Speaker Change: Good day and welcome to the Newmark Group second quarter 2024 financial results. As a reminder, today's call is being recorded. At this time, I'd like to turn the call over to Mr. Jason McGruder, Head of Investor Relations. Please go ahead.

Jason Mcgruder: At this time, I'd like to turn the call over to Mr. Jason McGruder, head of Investor Relations. Please go ahead.

Jason Mcgruder: Thank you, operator, and good morning. Newmark issued its second quarter 2024 financial results press release this morning. Unless otherwise stated, the results provided on today's call compare only the three months ending June 30, 2024, with the year earlier period. We will be referring to results only on a non-GAAP basis, including the terms Adjusted Earnings and Adjusted EBITDA. Unless otherwise stated, any figures discussed today with respect to cash flow from operations refer to net cash provided by operating activities excluding GSD FHA loan origination and sales.

Jason Mcgruder: Thank you, operator, and good morning. Newmark issued a second quarter 2024 financial results press release this morning. Unless otherwise stated, the results provided on today's call compare only to three months and June 30th, 2024, with the year-earlier period.

Jason Mcgruder: Thank you, operator, and good morning. Newmark issued its second quarter 2024 financial results press release this morning. Unless otherwise stated, the results provided on today's call compare only the three months ended June 30th, 2024 with a year earlier period.

Jason Mcgruder: Except as otherwise noted, we will be referring to results only on a non-GAAP basis, including the terms of just its earnings and just EBITDA. Unless otherwise stated, any figures discussed today with respect to cash flow from operations referred to net cash provided by operating activities, excluding GFD FHA loan origination and sales.

Except as otherwise noted, we will be referring to results only on a non-GAAP basis, including the terms adjusted earnings and adjusted EBITDA. Unless otherwise stated, any figures discussed today with respect to cash flow from operations refer to net cash provided by operating activities excluding GSD FHA loan origination and sales.

Jason Mcgruder: Please refer to today's press release, supplement tables, and the quarterly results presentation on our website for complete and updated definitions of any non-GAAP firms, recommendations of these items to the corresponding GAAP result, and how, when, and why management uses them, as well as relevant industry or economic statistics. The outlook today discusses, assumes no material acquisitions or meaningful changes in our stock price. Our expectations are subject to change based on various macroeconomic, social, political, and other factors.

Jason Mcgruder: Please refer to today's press release, the accompanying tables, and the quarterly results presentation on our website for complete and updated definitions of any non-GAAP terms, reconciliations of these items, the corresponding GAAP results, and how, when, and why management uses them, as well as relevant industry or economic statistics. The outlook we discuss today assumes no material acquisitions or meaningful changes in our stock price. Our expectations are subject to change based on various macroeconomic, social, political, and other factors.

Please.

refer to today's press release, Supplement Tables.

and the quarterly results presentation on our website for complete and updated definitions of any non-GAAP firms, reconciliations of these items, the corresponding GAAP results, and how, when, and why management uses them, as well as relevant industry or economic statistics. The outlook today discusses

Jason Mcgruder: I assume some material acquisitions are meaningful changes in our stock price. Our expectations are subject to change based on various macroeconomic, social, political, and other factors. None of our targets or goals beyond 2024 should be considered formal guidance.

Jason Mcgruder: None of our targets or goals beyond 2024 should be considered formal guidance. Also remind you that information on this call contains forward-looking statements, including, without limitations, statements concerning our economic outlook and business. Such statements are subject to risk uncertainties, which because actual results differ from expectations.

Jason Mcgruder: None of our targets or goals beyond 2024 should be considered formal guidance. I also remind you that the information on this call contains forward-looking statements, including, without limitations, statements concerning our economic outlook and business. Such statements are subject to risk and uncertainties, which could cause actual results to differ from expectations. Except as required by law, we undertake no obligation to update any forward-looking statement. For a complete discussion of these risks and other factors that may impact these forward-looking statements, see our SEC filings, including but not limited to the risk factors and disclosures regarding forward-looking information in our most recent SEC filings, which are incorporated by RAF. I'm now happy to turn the call over to our host, Chief Executive Officer, Barry Gosin.

Jason Mcgruder: I also remind you that information on this call contains foreign-looking statements, including without limitations, statements concerning our economic outlook and business. Such statements are subject to risk and uncertainties, which could cause actual results to differ from expectations.

Jason Mcgruder: Except as required by law, we undertake no obligation to update any forward-looking statements for complete discussion of the risks and other factors that may impact these forward-looking statements to our SEC filing, including but not limited to the risk factors and disclosure regarding forward-looking information in our most recent SEC filings, which are incorporated by reference.

Jason Mcgruder: except as required by law we undertake no obligation to update any forward looking statements. For complete discussion of the risks

and other factors that may impact these forward-looking statements see our SEC filings, including but not limited to the risk factors and disclosures regarding forward-looking information in our most recent SEC filings, which are incorporated by reference.

Larry Gosson: I'm now happy to turn the call over to our host and Chief Executive Officer, Larry Gosson. Good morning, and thank you for joining us. We are happy to report that new mark delivered growth across every business line. Fueled by two trillion dollars of near-term US commercial and multi-family mortgage maturities. Nearly four hundred billion dollars of an investible dry powder and a stable interest rate environment. We produced a 15% increase in capital markets revenues. We also generated solid growth for management, servicing, and leasing. Our 8% top line improvement and strong operating leverage produced 22% earnings per share growth.

Jason Mcgruder: I'm now happy to turn the call over to our host, Chief Executive Officer, Barry Gosin.

Barry Gosin: Good morning, and thank you for joining us. We are happy to report that Newmark delivered growth across every business line, fueled by $2 trillion of near-term U.S. commercial and multifamily mortgage maturities, nearly $400 billion of investable dry powder, and a stable interest rate environment. We produced a 15% increase in capital markets revenues. We also generated solid growth for management, servicing, and leasing. Our 8% top-line improvement and strong operating leverage produced 22% earnings per share gross. We increased investment sales by 18%, which outpaced industry volume. Newmark's debt business was up 15% while industry-wide activity was down by over 5%.

Barry Gosin: Good morning and thank you for joining us. We are happy to report that Newmark delivered growth across every business line.

Speaker Change: fueled by $2 trillion of near-term U.S. commercial and multifamily mortgage maturities, nearly $400 billion of investable dry powder, and a stable interest rate environment.

Jason Mcgruder: We produced a 15% increase in capital markets revenues. We also generated solid growth for management servicing and leasing. Our 8% top-line improvement and strong operating leverage produced 22%

Larry Gosson: We increased investment sales by 18%, which outpaced industry volumes. Newmark's debt business was up 15% while industry-wide activity was down by over 5%. Newmark's outperformance was led by mortgage brokerage growth of 46% and our deep position within the credit markets and strong access to both positional and alternative sources of capital. Our office leasing revenues were up 16% as companies commit to space and office employment continues to outpace overall job growth. Demand for additional office spaces led by technology, including artificial intelligence and financial services. Recapitalization of properties at lower values will drive macro tailwinds across the leasing market.

Jason Mcgruder: Earnings per share growth.

Jason Mcgruder: We increased investment sales by 18%, which outpaced industry volumes.

Jason Mcgruder: Newmark's debt business was up 15% while industry-wide activity was down by over 5%.

Barry Gosin: Newmark's outperformance was led by mortgage brokerage growth of 46 percent and our deep position within the credit markets and strong access to both positional and alternative sources of capital. Our office leasing revenues were up 16% as companies commit to space, and office employment continues to outpace overall job growth. Demand for additional office space is led by technology, including artificial intelligence and financial services. Recapitalization of properties at lower values will drive macro tailwinds across the leasing market.

Jason Mcgruder: Newmark's outperformance was led by mortgage brokerage growth of 46% and our deep position within the credit markets and strong access to both traditional and alternative sources of capital.

Jason Mcgruder: Our office leasing revenues were up 16% as companies commit to space and office employment continues to outpace overall job growth.

Jason Mcgruder: Demand for additional office space is led by technology, including artificial intelligence and financial services.

Jason Mcgruder: Recapitalization of properties at lower values will drive macro tailwinds across the leasing market. Solid fundamentals will drive industrial and retail leasing activity and we expect to outperform across all three property types over time.

Barry Gosin: Solid fundamentals will drive industrial and retail leasing activity, and we expect to outperform across all three property types over time. We remain confident in our 2024 full-year guidance, as well as our 2026 target of generating 50% EBITDA growth over the next two years. With that, I'm happy to turn the call over to Michael Rispoli.

Larry Gosson: Solid fundamentals will drive industrial and retail leasing activity, and we expect to outperform across all three property types over time.

Larry Gosson: We remain confident in our 2024 full year guidance, as well as our 2026 target of generating 50% even of growth over the next two years.

Jason Mcgruder: We remain confident in our 2024 full year guidance, as well as our 2026 target of generating 50% EBITDA growth over the next two years. With that, I'm happy to turn the call over to Michael Rispoli.

Michael Rispoli: With that, I'm happy to turn the call over to Michael Rispoli. Thank you, Barry, and good morning. Newmark's second quarter results demonstrated our strong operating leverage. Our 8.1% revenue improvement delivered adjusted EPS growth of 22.2% and adjusted EBITDA growth of 18.3%. Total revenues were $633.4 million. We improved revenues for management services, servicing, and other by 9.2%. The fourth consecutive quarter of strong growth, and we're up 14.7% year-to-date. These businesses have grown at a 17% CAGR since our initial public offering in 2017 and recently surpassed $1 billion of annual revenues. We anticipate these service lines generating solid, organic improvement for the remainder of the year.

Michael Rispoli: Thank you, Barry, and good morning. Newmark's second quarter results demonstrated our strong operating leverage. Our 8.1% revenue improvement delivered adjusted EPS growth of 22.2% and adjusted EBITDA growth of 18.3%. Total revenues were $633.4 million.

Michael Rispoli: Thank you, Barry, and good morning.

Michael Rispoli: Newmark's second quarter results demonstrated our strong operating leverage. Our 8.1 percent revenue improvement delivered adjusted EPS growth of 22.2 percent and adjusted EBITDA growth of 18.3 percent.

Michael Rispoli: We improved revenues for management services, servicing, and others by 9.2%, the fourth consecutive quarter of strong growth, and we're up 14.7% year-to-date. These businesses have grown at a 17% CAGR since our initial public offering in 2017 and recently surpassed $1 billion of annual revenue. We anticipate these service lines generating solid organic improvement for the remainder of the year.

Michael Rispoli: Total revenues were $633.4 million.

Michael Rispoli: We improved revenues for management services, servicing, and other by 9.2%, the fourth consecutive quarter of strong growth, and we're up 14.7% year-to-date.

Jason Mcgruder: These businesses have grown at a 17% CAGR since our initial public offering in 2017 and recently surpassed $1 billion of annual revenues.

Jason Mcgruder: We anticipate these service lines generating solid organic improvement for the remainder of the year.

Michael Rispoli: We increased our leasing revenues by 2.4%, led by 15.8% growth in office. We increased capital markets revenues by 14.5%, continuing to gain market share in both investment sales and debt. Investment sales fees improved 18.2% against the 2% volume decline in the US and Europe. These from our debt business increased 14.6% against a more than 5% decline in the U.S., commercial and multi-family originations. This outperformance was driven by 46.2% growth in mortgage brokerage fees, partially offset by a decline in GSE FHA origination. The decline in origination is due to a 27% decrease in industry activity, as well as the difficult comparison to the second quarter of last year when we closed the $947 million Park La Brea origination.

Michael Rispoli: We increased our leasing revenues by 2.4%, led by 15.8% growth in office. We increased capital markets revenues by 14.5%, continuing to gain market share in both investment sales and debt. Investment sales fees improved 18.2% against a 2% volume decline in the US and Europe. These from our debt business increased 14.6% against a more than 5% decline in U.S. commercial and multifamily origination. This outperformance was driven by 46.2% growth in mortgage brokerage fees, partially offset by a decline in GSE FHA origination. The decline in origination is due to a 27% decrease in industry activity, as well as the difficult comparison to the second quarter of last year, when we closed the $947 million Park La Brea origination.

Jason Mcgruder: We increased our leasing revenues by 2.4% led by 15.8% growth in office.

Jason Mcgruder: We increased capital markets revenues by 14.5%, continuing to gain market share in both investment sales and debt.

Michael Rispoli: Investment sales fees improved 18.2% against a 2% volume decline in the U.S. and Europe .

Jason Mcgruder: These from our debt business increased 14.6% against a more than 5% decline in the U.S. commercial and multifamily originations.

Jason Mcgruder: This outperformance was driven by 46.2% growth in mortgage brokerage fees.

Jason Mcgruder: partially offset by a decline in GSE FHA origination.

Jason Mcgruder: The decline in origination is due to a 27% decrease in industry activity, as well as the difficult comparison to the second quarter of last year when we closed the $947 million Park La Brea origination.

Michael Rispoli: Turning to expenses, excluding past due items, total expenses were up 4.3%. Compensation expenses were up 8.3%, reflecting higher variable commissions as well as the recent addition of revenue-generating professionals. Non-compensation expenses were down 5.3%.

Michael Rispoli: Turning to expenses, total expenses were up 4.3%. Compensation expenses were up 8.3%, reflecting higher variable commissions, as well as the recent addition of revenue-generating professionals. Non-compensation expenses were down 5.3%.

Jason Mcgruder: Returning to expenses, excluding pass-through items. Total expenses were up 4.3%. Compensation expenses were up 8.3%, reflecting higher variable commissions, as well as the recent addition of revenue-generating professionals.

Jason Mcgruder: Non-compensation expenses were down 5.3%.

Michael Rispoli: During the second quarter, we completed our $75 million cost savings. This consisted of long-term and sustainable expense reductions focused on streamlining and improving operational efficiency and service delivery to our producers and their clients, while we achieved our previously announced savings target. Business transformation and operational excellence is an ongoing part of our DNA. Reimagining every part of our service delivery model through the lens of enhanced technology, artificial intelligence, and automation will drive operating results, more stable cash flow generation, and shareholder value. Turning to Earth,

Michael Rispoli: During the second quarter, we completed our $75 million cost savings plan. This consisted of long-term and sustainable expense reductions focused on streamlining and improving operational efficiency and service delivery to our producers and their clients. While we have achieved our previously announced savings target, business transformation and operational excellence is an ongoing part of our DNN. Reimagining every part of our service delivery model through the lens of enhanced technology, artificial intelligence, and automation will drive operating results, more stable cash flow generation, and shareholder value. Turning to earnings, our adjusted EPS was 22 cents, up 22.2 percent. The adjusted EBIDA was $86.3 million, up 18.3 percent.

Jason Mcgruder: During the second quarter, we completed our $75 million cost savings plan.

Jason Mcgruder: This consisted of long-term and sustainable expense reductions focused on streamlining and improving operational efficiency and service delivery to our producers and their clients.

Jason Mcgruder: While we have achieved our previously announced savings target, business transformation and operational excellence is an ongoing part of our DNA.

Jason Mcgruder: Re-imagining every part of our service delivery model through the lens of enhanced technology, artificial intelligence, and automation will drive operating results, more stable cash flow generation, and shareholder value.

Michael Rispoli: Our adjusted EPS was $0.22, up 22.2%, and adjusted EBITDA was $86.3 million, up 18.3%. With respect to our share count, our fully diluted weighted average share count was $255.6 million, flat compared with the first quarter of 2024. We repurchased 5.5 million shares in the quarter. Year-to-date, we repurchased 9 million shares at an average price of $10.32. Turning to the

Jason Mcgruder: Turning to earnings, our adjusted EPS was 22 cents up 22.2 percent. Adjusted EBITDA was 86.3 million dollars up 18.3 percent.

Michael Rispoli: With respect to our share count, our fully diluted weighted average share count was 255.6 million, flat compared with the first quarter of 2024. We repurchased 5.5 million shares in the quarter. Year-to-date, we repurchased 9 million shares at an average price of $10.32. Turning to the balance sheet, we ended the quarter with $176.4 million of cash and cash equivalents and $745.2 million in corporate debt. Year-to-date, we have generated $132.5 million of cash from the business, representing 88.5 percent of our year-to-date adjusted EBIDA. We expect this strong cash generation to continue. Changes from year-end cash reflected the cash generated by the business and $197.9 million of incremental corporate debt.

Jason Mcgruder: With respect to our share count, our fully diluted weighted average share count was $255.6 million flat compared with the first quarter of 2024.

Jason Mcgruder: We repurchased 5.5 million shares in the quarter.

Jason Mcgruder: Year-to-date, we repurchased 9 million shares at an average price of $10.32.

Michael Rispoli: We ended the quarter with $176.4 million of cash and cash equivalents and $745.2 million in corporate debt. Year to date, we have generated $132.5 million of cash from the business, representing 88.5% of our year-to-date adjusted EBITDA. We expect this strong cash generation to continue. Changes from year-end cash reflect cash generated by the business and $197.9 million of incremental corporate debt. These increases were partially offset by $185.7 million used primarily for investment in our business. $92.7 million of share repurchases and normal First Half movements in working capital. We ended the quarter at 1.4 times net leverage, amongst the lowest in the industry. Moving on to guidance.

Jason Mcgruder: Turning to the balance sheet.

Jason Mcgruder: We ended the quarter with $176.4 million of cash and cash equivalents and $745.2 million in corporate debt.

Jason Mcgruder: Year-to-date, we have generated $132.5 million of cash from the business, representing 88.5% of our year-to-date adjusted EBITDA.

Jason Mcgruder: We expect this strong cash generation to continue.

Jason Mcgruder: Changes from year-end cash reflect the cash generated by the business.

Michael Rispoli: These increases were partially offset by $185.7 million used primarily for investment in our business, $92.7 million of share repurchases, and normal first half movements in working capital. We ended the quarter at 1.4 times net leverage, amongst the lowest in the industry.

Jason Mcgruder: and $197.9 million of incremental corporate debt.

Jason Mcgruder: These increases were partially offset by $185.7 million used primarily for investment in our business, $92.7 million of share repurchases,

Jason Mcgruder: and Normal First Half Movements in Working Capital.

Jason Mcgruder: We ended the quarter at 1.4 times net leverage, amongst the lowest in the industry.

Michael Rispoli: Moving to guidance, our full year 2024 revenue and earnings outlook remains unchanged, and we expect sequential earnings improvement for the remainder of the year. We continue to target annual share count growth of 2 percent or less over time. For 2024, we expect slightly higher, fully diluted, weighted average share count growth as a result of our 16 percent year-to-date increase in share price, which accelerates the recognition of certain RSUs under the Treasury Stock Method. This is just timing and does not reflect the issuance of any additional equity.

Michael Rispoli: Our full year 2024 revenue and earnings outlook remains unchanged, and we expect sequential earnings improvement for the remainder of the year. We continue to target annual share count growth of 2% or less over time. For 2024, we expect slightly higher fully diluted weighted average share count growth as a result of our 16% year-to-date increase in share price, which accelerates the recognition of certain RSUs under the Treasury stock. This is just timing and does not reflect the issuance of any additional. And with that, I would like to open the call for questions. Thank you.

Jason Mcgruder: Moving to guidance.

Jason Mcgruder: Our full year 2024 revenue and earnings outlook remains unchanged, and we expect sequential earnings improvement for the remainder of the year.

Jason Mcgruder: We continue to target annual share count growth of 2% or less over time. For 2024, we expect slightly higher fully diluted weighted average share count growth as a result of our 16% year-to-date increase in share price.

Jason Mcgruder: which accelerates the recognition of certain RSUs under the Treasury stock method.

Michael Rispoli: And with that, I would like to open the call for questions. Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions.

Jason Mcgruder: This is just timing and does not reflect the issuance of any additional equity.

Speaker Change: And with that, I would like to open the call for questions.

Operator: Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We will take our first question from Connor Mitchell with Piper Sandler.

Speaker Change: Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.

Jason Mcgruder: Again, press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions.

Connor Mitchell: We will take our first question from Connor Mitchell with Piper Sandler. Hey, good morning. Thanks for taking my question. So, kind of across the whole real estate industry, we've seen cap rates coming in, especially with multi-family and shopping centers though. You know, Blackstone might be interested in some shopping centers. We've seen some large apartments, transactions. Just wondering how you guys kind of think about the institutional appetite for putting dry powder to use paired with higher pricing and submitting more. Especially on the favorable property types and how that might impact your investment sale fees in the back half of the year.

Speaker Change: We will take our first question from Connor Mitchell with Piper Sandler.

Connor Mitchell: Hey, good morning. Thanks for taking my question. So kind of across the whole real estate industry, we've seen cap rates coming in, especially with multi-family and shopping centers. You know, Blackstone might be interested in some shopping centers. We've seen some large apartment transactions. I'm just wondering how you guys kind of think about the institutional appetite for putting dry powder to use paired with higher pricing and submitting more, especially on the favorable property types and how that might impact your investment sales fees in the back half of the year.

Connor Mitchell: Hey, good morning. Thanks for taking my question.

Speaker Change: So kind of across the whole real estate industry, we've seen cap rates coming in, especially with multi-family and shopping centers. So, you know, Blackstone might be interested in some shopping centers. We've seen some large apartments transactions.

Speaker Change: I'm just wondering how you guys kind of think about the institutional appetite for putting dry powder to use paired with like higher pricing and submitting more, especially on the

Jason Mcgruder: favorable property types and how that might impact your investment sales fees in the back half of the year.

Larry Gosson: Well, I mean, we passed the inflection point. We hit the trough; we're on our way to better times. Interest rates have stabilized. The ecosystem is designed to buy property. You have a whole industry that is there to invest, dry powder, and they're starting to feel better about the opportunities. Many of the categories, it's not a demand or supply issue. It's really about interest rates and liquidity. As interest rates come down or stabilize, at the very least, there's a better look at positive leverage. Looking at where and the creases in the market, where you want to invest, the smart guys are looking at lots of different things.

Barry Gosin: Well, I mean, we've passed the inflection point, we hit the trough, we're out, and we're on our way to better times. Interest rates have stabilized. The ecosystem is designed to buy property. You have a whole industry that is there to invest dry powder, and, you know, they're starting to feel better about the opportunities. In many categories, it's not a demand or supply issue. It's really about interest rates and liquidity. And as interest rates come down or stabilize, at the very least, there's a better look at, you know, positive, positive leverage.

Speaker Change: Well, I mean, we've passed the inflection point. We hit the trough. We're on our way to better times.

Speaker Change: Interest rates have stabilized.

Speaker Change: The ecosystem is designed to buy property. You have a whole industry that is there to invest dry powder, and they're starting to feel better about the opportunities.

Speaker Change: Many of the categories it's not it's it's not a demand or supply issue it's really about interest rates and liquidity.

Speaker Change: And as interest rates come down or stabilize, at the very least,

Speaker Change: There's a better look at, you know, positive, positive, positive leverage. So, you know, looking at where and the creases in the market where you want to invest, you know, the smart guys are looking at lots of different things.

Barry Gosin: So, you know, looking at where and the creases in the market where you want to invest, you know, the smart guys are looking at lots of different things, and retail is one of those. I mean, it had a softer year this year in terms of retail leasing and industrial, but the underlying fundamentals are all strong, near-shoring, on-shoring. We have consumers. There have been a lot of retail centers that have been taken off the market. As long as the population continues to grow, there'll still be a need, and, you know, the consumer's still strong, so. I think that all bodes well for the opportunities looking forward over the next couple of years.

Larry Gosson: Retail is one of those. I mean, it had a software year this year in terms of retail leasing and industrial. But the underlying fundamentals are all strong; near-shoring, ensuring consumers, there have been a lot of retail centers that have been taken off the market. As long as population continues to grow, there will still be a need, and the consumers still strong.

Speaker Change: And retail is one of those. I mean, it had a softer year this year in terms of retail leasing and industrial. But the underlying fundamentals are all strong, nearshoring, onshoring. We have consumers, there have been a lot of retail centers that have been taken off the market.

Speaker Change: As long as population continues to grow, there will still be a need, and the consumer is still strong.

Larry Gosson: I think that all boasts well for the opportunities looking forward over the next couple of years.

Speaker Change: I think that all bodes well for the opportunities looking forward over the next couple years.

Barry Gosin: Okay, and then maybe turning to office. You guys talked about some strong office leasing in the quarter and saw that you're the number one broker in the space now, or in the first half. You know, we're well aware of the strength in Park Avenue and then Century City out West. Just wondering. If these two sub markets are truly differentiated, or are you guys starting to see some spillover to some other sub markets, maybe closer by, or even other regions of the country in terms of leasing and then also any investment activity?

Connor Mitchell: Okay, and then maybe turning it to office. You had talked about some strong office leasing in the quarter, and so that you're the number one broker in the space now, or in the first half. We're well aware of the strength in Park Avenue and then Century City out West.

Speaker Change: Okay, and then maybe turn into office.

Speaker Change: You guys talked about some strong office leasing in the quarter and saw that you're the number one broker in the space now, or in the first half.

Speaker Change: You know, we're, we're well aware of, like, the strength and Park Avenue and then Century City out West. Just wondering.

Connor Mitchell: Just wondering, if these two submarkets are truly differentiated, or are you guys starting to see spill over to some other submarkets, maybe close or buy, or even other regions of the country in terms of leasing and then also any investment activity. I mean, I think it's pretty consistent across the Gateway cities. At the top of the markets are generally pretty good. And it's a bifurcated market down the property types. Top of the market, low vacancy, high pricing. Next, as vacates rented, the next tier starts to see activity. I think you could say that for other cities.

Speaker Change: If these two sub-markets are truly differentiated, or are you guys starting to see some spillover to some other sub-markets, maybe closer by or even other regions of the country in terms of leasing and then also

Barry Gosin: I mean, I think it's pretty consistent across the gateway cities that the top of the markets are generally pretty good. And it's a bifurcated market, you know, down the property types, top of the market, low vacancy, high pricing, next, as that gets rented, the next year starts to see activity. Lou, do you want to add to that?

Speaker Change: any investment activity.

Speaker Change: I mean I think it's pretty consistent across the gateway cities that the top of the markets are generally pretty good.

Speaker Change: And it's a bifurcated market, you know, down the property types, top of the market, low vacancy, high pricing. Next, as that gets rented, the next year starts to see activity. I think you could say that for other cities.

Larry Gosson: Do you want to ask of that?

Larry Gosson: Yeah, yeah, I would agree kind of. I mean, I think what we're seeing is consistent across the market. You know, demand is up. Certainly, people are making commitments for longer term, whereas before it was much more of a shorter term commitment.

Luis Alvarado: Yeah, I would agree, Connor. I mean, I think what we're seeing is consistent across the market. You know, demand is up, and certainly people are making commitments for the longer term, whereas before it was much more of a shorter term commitment. I think the other thing that you're seeing is as these buildings get recapitalized, it creates opportunities for these buildings that weren't competitive to become competitive by having the capital to provide the TIs, which is a big issue in the leasing market today, as well as to amenitize these buildings to make them competitive and attractive for the tenants that are out there looking in the market.

Speaker Change: Lou, you want to add to that?

Lou: Yeah, yeah, I would agree, Connor. I mean, I think what we're seeing is consistent across the market, you know, demand is up, certainly people are making commitments for longer term, whereas before it was much more of a shorter term commitment.

Larry Gosson: I think the other thing that you're seeing is, as these buildings get recapitalized, it creates the opportunities for these buildings that weren't competitive to become competitive by having the capital to provide the TIs, which is a big issue in the leasing markets today, as well as to amendatize these buildings to make them competitive and attractive for the tenants that are out there looking in the market. So I think we're seeing a couple of things impacting the growth in office. And look, we're certainly not back to where we were, but we're certainly making good strides and good growth.

Speaker Change: I think the other thing that you're seeing is as these buildings get recapitalized

Speaker Change: It creates the opportunities for these buildings that weren't competitive to become competitive by having the capital to provide the TIs, which is a big issue in the leasing market today, as well as to

Luis Alvarado: So I think we're seeing, you know, a couple of things impacting growth in office. And look, we're certainly not back to where we were, but we're certainly making good strides and good growth, and the pipeline looks good, and activity looks good going forward.

Speaker Change: amenitize these buildings to make them competitive and attractive for the tenants that are out there looking in the market. So I think we're seeing

Speaker Change: You know, a couple of things impacting the growth in office, and look, we're certainly not back to where we were, but we're certainly making good strides and good growth, and the pipeline looks good and activity looks good going forward.

Larry Gosson: and the pipeline looks good, and activity looks good going forward.

Connor Mitchell: Okay, maybe just one more for me as well. Just curious and wanted to get your take on how the business is progressing with some of the new international launches, most recently Paris. Fantastic. It's incredibly exciting. I think we've hired great people in Paris. You know, we have opened four months ago. We have now 30 to 40 people sitting in our office in Paris, and we expect to grow that over the next 12 months. We've hired the number one and two teams in capital markets, retail brokerage, and just hired a great team in office leasing, both on the tenant and agency side.

Barry Gosin: Okay, maybe just one more for me as well. I'm just curious and want to get your take on how the business is progressing with some of the new international launches, most recently, Paris.

Speaker Change: Okay, maybe just one more for me as well. I'm just curious and want to get your take on on how the business is progressing with some of the new international launches, most recently Paris.

Barry Gosin: It's incredibly exciting. I think we've hired great people in Paris. You know, we opened four months ago. We have now 30 to 40 people sitting in our office in Paris, and we expect to grow that over the next 12 months. We've hired the number one and two teams in capital markets, retail brokerage, and we just hired a great team in office leasing, both on the tenant and agency side. You know, we're very excited about France.

Speaker Change: Fantastic.

Speaker Change: It's incredibly exciting.

Speaker Change: I think we've hired great people in Paris. You know, we have opened four months ago. We have.

Speaker Change: Now 30 to 40 people sitting in our office in Paris, and we expect to grow that over the next 12 months.

Speaker Change: We've hired the number one and two team in capital markets, retail brokerage, just hired a great team in office leasing, both on the tenant and agency side. We're very excited about France.

Larry Gosson: We're very excited about France. And we're doing well in the UK. We built a very good foundation of a business in the UK in a relatively short time, 24 months since we broke up from our alliance partner.

Barry Gosin: And we're doing well in the UK. We built a very good foundation for a business in the UK in a relatively short time, 24 months since we broke up from our alliance partner. And we're going to do the same thing throughout Europe.

Speaker Change: And we're doing well in the UK. We built a very good foundation of a business in the UK in a relatively short time, 24 months, since we broke up from our alliance partner. And we're going to do the same thing throughout Europe .

Larry Gosson: And we're going to do the same thing throughout Europe.

Connor Mitchell: Okay, thank you very much.

Connor Mitchell: Okay, thank you very much.

Speaker Change: Okay, thank you very much.

Michael Rispoli: Again, if you would like to ask a question, it is star one.

Operator: Again, if you would like to ask a question, it is star 1. We will take our next question from Jade Rahmani with KBW.

Jade Rahmani: We will take our next question from Jade Rahmani with KBW. Hi, good morning.

Speaker Change: Again, if you would like to ask a question, it is star 1. We will take our next question from Jade Rahmani with KBW.

Jason Sabshon: Hi, good morning. This is actually Jason Sabshon on for Jade. Thanks for taking my question. What kind of growth rates do you expect to see in leasing and capital markets in 2025?

Jason Safshan: This is Jason Safshan on for Jade. Thanks for taking the question. What kind of growth rates do you expect to see in leasing in capital markets in 2025?

Speaker Change: Hi, good morning. This is actually Jason Sabshon on for Jade. Thanks for taking my question.

Jason Sabshon: What kind of growth rates do you expect to see in leasing and capital markets in 2025?

Michael Rispoli: Good morning, Jason. So, you know, I think we've been pretty clear that we're seeing a turn in the market. Our pipelines are building. You know, we have a clear target for 2026, which is about 50 percent EBITDA growth over two years. You know, exactly how that plays out each year is a little bit difficult to predict at the moment, but I would imagine that, you know, we're going to continue to see improvement as we move through the back half of 24, as we move into 25, and certainly by the back half of 25 and into 26.

Michael Rispoli: Morning, Jason. Look, you know, I think we've been pretty clear that we're seeing a turn in the market, and our pipelines are building. You know, we have a clear target for 2026, which is about 50% EBITDA growth over two years. You know, exactly how that plays out each year is a little bit difficult to predict at the moment, but I would imagine that, you know, we're going to continue to see improvement as we move through the back half of 2024, as we move into 2025, and certainly by the back half of 2025 and into 2026, we expect pretty robust activity throughout all the markets.

Speaker Change: Good morning, Jason. Hello.

Speaker Change: You know, I think we've been pretty clear that we're seeing a turn in the market, our pipelines are building. You know, we have a clear target for 2026, which is about 50% EBITDA growth over two years.

Speaker Change: You know, exactly how that plays out each year is a little bit difficult to predict at the moment.

Speaker Change: But I would imagine that, you know, we're going to continue to see improvement as we move through the back half of 24, as we move into 25, and certainly by the back half of 25 and into 26, we expect pretty robust activity throughout all the markets.

Michael Rispoli: We expect pretty robust activity throughout all the markets.

Michael Rispoli: Great. Thank you.

Barry Gosin: Great, thank you. And for commercial real estate transaction volumes to really pick up, would you rather see weaker employment and lower rates or stronger employment paired with higher interest rates?

Larry Gosson: And for commercial real estate transaction volumes to really pick up, would you rather see weaker employment and lower rates, or stronger employment paired with higher interest rates? Yeah, that's, that's got to be carefully titrated. I mean, the reality is you would think that lower employment takes the fear out of inflation. People will come back to the office. Lower interest rates is probably the single biggest driver of capital markets transactions. You know, people looking for returns relating to the fixed free rate of return. and if you can, you know, you can't get positive leverage; it's hard to invest.

Speaker Change: Great, thank you. And for commercial real estate transaction volumes to really pick up, would you rather see weaker employment and lower rates or stronger employment paired with higher interest rates?

Barry Gosin: That's got to be carefully titrated. I mean, the reality is you would think that lower employment takes the fear out of inflation. [inaudible] people will come back to the office. Lower interest rates are probably the single biggest driver of capital markets transactions. You know, people are looking for returns relating to the fixed free rate of return. And if you can, you know, you can't get positive leverage; it's hard to invest. I mean, people are investing at an inflection point where there's even leverage, you know, on the anticipation of taking floating rate loans or SASB or CMBS loans for shorter terms in anticipation of a takeout at a lower interest rate than an arbitrage as a result. So that, you know, that's really the biggest driver. On the one hand, lower employment, you know; you want higher employment and high employment growth because that establishes demand. Um, So it's tricky. It's tricky.

Speaker Change: Yeah, that's all right.

Speaker Change: That's got to be carefully titrated. I mean, the reality is you would think that lower employment takes the fear out of inflation.

Speaker Change: People will come back to the office.

Speaker Change: Lower interest rates is the probably the single biggest driver of capital markets transactions.

Speaker Change: You know, people looking for returns relating to the fixed free rate of return.

Larry Gosson: I mean, people are investing at the, at the conflection point where there's even leverage, you know, on the anticipation of taking floating-grade loans, or SASB or CMBS loans, for shorter terms in anticipation of a takeout at a lower interest rate and arbitrage as a result. So that, you know, that's really the biggest driver. On one hand, lower employment; you know, you want higher employment and high employment growth because that establishes demand.

Speaker Change: And if you can, you know, you can't get positive leverage, it's hard to invest. I mean, people are investing at the inflection point where there's even leverage, you know, on the anticipation of taking floating rate loans or SASB or CMBS loans.

Speaker Change: for shorter terms in anticipation of a takeout at a lower interest rate and an arbitrage as a result.

Speaker Change: So that, you know, that's really the biggest driver. On one hand, lower employment, you know, you want higher employment and high employment growth because that establishes demand.

Larry Gosson: So, you know, so it's tricky. It's tricky. Inflation will never reside in some respects if you have population growth and you have inflation. It makes the existing inventory in stock more valuable and subject to replacement value. It's never going to get cheaper to build office buildings, so that inflation with population growth and low interest rates would be the optimum condition to have because you would then be too expensive to build office. The existing inventory would get filled up. They would be more valuable at higher rates. And so it's, you know, this complex set of levers that drive the market.

Barry Gosin: Inflation will never go away. In some respects, if you have population growth and you have inflation, it makes the existing inventory and stock more valuable and subject to replacement value. It's never gonna get cheaper to build office buildings so that inflation with population growth and low interest rates would be the optimum condition to have. Because it would then be too expensive to build an office, the existing inventory would get filled up, and they would be more valuable at higher rates.

Speaker Change: So, you know, so it's tricky. It's tricky. Inflation will never reside. In some respects, if you have population growth and you have inflation, it makes the existing inventory and stock more valuable and subject to replacement value. It's never going to get cheaper to build office buildings so that inflation.

Speaker Change: with population growth and low interest rates would be the optimum.

Speaker Change: condition to have.

Speaker Change: because you would then be too expensive to build an office, the existing inventory would get filled up, they would be more valuable at higher rates.

Barry Gosin: And so it's, you know, it's a complex set of levers that drive the market. But, you know, from our perspective, we have a very good runway. We have an increasing market share. We've hired a lot of people over the last few years that have not even entered our numbers, who are now gestating into, you know, production. So we are, you know, we are in a really good position to benefit from all aspects of the market improvement, market stabilization, and runway increase.

Speaker Change: And so it's, you know, it's a complex set of levers that drive the market. But, you know, from our perspective, we have a very good runway. We have an increasing market share. We've hired a lot of people over the last few years that have not even entered our numbers.

Larry Gosson: But, you know, from our perspective, we have a very good runway. We have an increasing market share. We've hired a lot of people over the last few years that have not even entered our numbers who, you know, are just stating into, you know, production. So we are, you know, we are in a really good position to benefit from both all aspects of the market improvement and market stabilization and runway increase.

Speaker Change: who, you know, are gestating into, you know, production.

Speaker Change: So we are, you know, we are in a really good position to benefit from both all aspects of the market improvement and market stabilization and runway increase.

Jason Safshan: Great. Thank you. And for my last question, it's used, though, obviously, leasing volume has started to take up a bit.

Barry Gosin: And for my last question, it seems the office leasing volume has started to pick up a bit. So I'd be curious to hear your view on how occupier sentiment has changed and, and how you think the July jobs report, which was weaker than expected, factors in at all.

Speaker Change: Great, thank you. And for my last question.

Larry Gosson: So I'd be curious to hear your view on how off your prior sentiment has changed and how you see the July jobs report, which was weaker than expected, how that factors in at all. Well, the financial service industry has been doing really well. Artificial talent, intelligence; there are green fruits all over the place. Data centers, digital businesses, I mean, even Bitcoin and those kinds of businesses are doing well. The, I mean, the only issue in terms of office space in the cities are the businesses where people are more soft on people working from home. But the metrics are starting to show that productivity is declining and opportunity declines for young workers that don't come to the office.

Speaker Change: It seems the office leasing volume has started to pick up a bit so I'd be curious to hear your view on how occupier sentiment has changed and how you see the July jobs report, which was weaker than expected, how that factors in at all.

Barry Gosin: Well, the financial service industry has been doing really well; artificial intelligence, there are green streets all over the place, data centers, digital businesses, I mean even Bitcoin and those kinds of businesses are doing well. I mean, the only issue in terms of office space in the cities is businesses where people are more soft on people working from home, but the metrics are starting to show that productivity is declining, and opportunities are declining for young workers that don't come to the office.

Speaker Change: Well, the financial service industry has been doing really well. Artificial intelligence, there are green shoots all over the place.

Speaker Change: Data centers, digital businesses, I mean, even Bitcoin and those kind of businesses are doing well. I mean, the only issue in terms of office space in the cities are the businesses where

Speaker Change: People are more...

Speaker Change: Soft on people working from home, but the metrics are starting to show that productivity is declining, and opportunity declines for young workers that don't come to the office. Coming to the office, every other category of real estate is a supply-demand, interest-rate-driven,

Larry Gosson: Coming to the office, every other category of real estate is a supply-demand, interest rate-driven, a business consumer demand is high in retail, multi-family population growth. There's really a tremendous need for multi-family. The only, you know, there will always be an up and a down in respect of oversupply in certain industries that will, you know, come back and it's timing. But the office industry has been more complicated because of the nature of hybrid work. And, you know, that a lot of it, a lot of the information is anecdotal. You know, it's our belief that people will come to work.

Barry Gosin: Coming to the office, every other category of real estate is a supply-demand, interest-rate-driven business. Consumer demand is high in retail. With population growth, there's really a tremendous need for multifamily. There will always be an up and a down in respect of oversupply in certain industries that will come back, and it's timing.

Speaker Change: of business.

Speaker Change: Consumer demand is high in retail. Multifamily population growth, there's really a tremendous need for multifamily.

Speaker Change: The only, you know, there will always be an up and a down in respect of oversupply in certain industries.

Barry Gosin: But the office industry has been more complicated because of the nature of hybrid work, and a lot of the information is anecdotal. It's our belief that people will come to work, and the further away we get from the experience of COVID, the excitement of young people coming to cities to work and get jobs and build relationships and build their careers, it's going to get better. And I believe it is.

Speaker Change: that will come back and it's timing. But the office industry has been more complicated because of the nature of hybrid work. And a lot of the information is anecdotal. It's our belief that people will come to work.

Larry Gosson: And the further away we get from the experience of COVID, the excitement of young people coming to cities to work and get jobs and build relationships and build their careers, it's going to get better. And I believe it is. We leave; you know, our people are in the office. Of course, we're in the real estate business, financial services, companies are bringing their people into the office. They have to be there. But, you know, it's all going to get better. CEOs are trying to get their people back to the office because they know that it's really beneficial in terms of culture.

Speaker Change: And the further away we get from the experience of COVID, the excitement of young people coming to cities to work and get jobs and build relationships and build their careers, it's going to get better.

Barry Gosin: Our people are in the office. Of course, we're in the real estate business. Financial services companies are bringing their people into the office. They have to be there. But it's all going to get better.

Speaker Change: And I believe it is. Our people are in the office. Of course, we're in the real estate business. Financial services companies are...

Barry Gosin: CEOs are trying to get their people back to the office because they know that it's really beneficial in terms of culture. The CEOs have always, for the most part, wanted to bring their people back to the office. So the one positive of lower employment is the fact that it provides a lever of power between employee and employer, and that gives CEOs a little more power to bring people back to the office.

Speaker Change: bringing their people into the office, they have to be there.

Speaker Change: But, you know, it's all, it's all going to get better. CEOs are trying to, to get their people back to the office because they know that it's really beneficial in terms of culture.

Larry Gosson: The CEOs have always, for the most part, wanted to bring their people back to the office.

Speaker Change: The CEOs have always, for the most part, wanted to bring their people back to the office. But, you know, so the one positive of a lower employment is the fact it provides a lever of

Larry Gosson: But, you know, so the one positive of a lower employment is the fact that it provides a lever of, you know, the power between employee and employer, and that gives us a little more power to bring people back to the office.

Barry Gosin: You know, the power between employee and employer, and that gives CEOs a little more power to bring people back to the office.

Patrick O'Shaughnessy: Thank you. We will take our next question from Patrick O'Shaughnessy with Raymond James. Hey, good morning. Can you speak to the multi-family outlook in general and then for loan origination pipeline in particular? Well, multi-family, you know, there's still a tremendous demand. I mean, there is, you know, as a function, there will be, you know, some recaps, some situations where people refinanced and purchased at high prices, but the demand, the demand and growth in many of these markets have, it just continues to be strong. Some markets have an oversupply and have too much in the pipeline, but that's just normal, normal cyclical nature of the business. But we're optimistic about it.

Patrick O'Shaughnessy: We will take our next question from Patrick O'Shaughnessy with Raymond James.

Speaker Change: Thank you.

Speaker Change: We will take our next question from Patrick O'Shaughnessy with Raymond James.

Barry Gosin: Hey, good morning. Can you speak to the multifamily outlook in general and then your loan origination pipeline, in particular?

Patrick O'Shaughnessy: Hey, good morning. Can you speak to the multifamily outlook in general and then your loan origination pipeline in particular?

Barry Gosin: Well, multifamily is, you know, there's still a tremendous demand. I mean, there is, you know, a function, there will be, you know, some recaps, some situations where people refinance and purchase at high prices, but the demand, the demand and growth in many of these markets just continue to be strong. Some markets have an oversupply and add too much in the pipeline, but that's just the normal cyclical nature of the business.

Speaker Change: Well, multifamily is, you know, there's...

Speaker Change: There's still a tremendous demand.

Speaker Change: I mean, there is, you know, is a function there will be, you know, some recaps, some situations where people refinanced and purchase at high prices, but the demand, the demand and growth in many of these markets.

Speaker Change: have, it just continues to be strong. Some markets have an oversupply and have too much in the pipeline, but that's just the normal cyclical nature of the business. But we're optimistic about it. We're seeing a lot of...

Barry Gosin: But we're optimistic about it. We're seeing a lot of bids and a lot of interest in things that we're doing BOVs on. And, you know, and then you have affordable housing, which is a real opportunity. I mean, the good thing about affordable housing is on both sides of the aisle. There is no light between Republicans and Democrats on affordable housing because the Republicans like low-income tax credits and the private world coming into building affordable housing, and the Democrats really want more workforce and affordable housing for people.

Larry Gosson: We're seeing a lot of bids and a lot of interests and things that we're doing be of ease about.

Speaker Change: bids and a lot of interests and things that we're doing BOVs about.

Larry Gosson: And, you know, and then you have affordable housing, which is a real opportunity. I mean, the good thing about affordable housing is on both sides of the aisle, it's, you know, there is no light between Republicans and Democrats on affordable because the Republicans like low-income tax credits and the private world coming into building affordable, and the Democrats really want more workforce and affordable housing for people. So, that's, and it's, and it's mission-critical for Freddie and Fannie and, you know, CRE credits for institutions. So, I think that's a growing industry, and we're a big player in the affordable space around the country, certainly old, old time Section 8 and light tech.

Speaker Change: And then you have affordable housing, which is a

Speaker Change: which is a real opportunity. I mean, the good thing about affordable housing is on both sides of the aisle, it's, you know, there is no light between Republicans and Democrats.

Speaker Change: on Affordable because the Republicans like...

Speaker Change: Low-income tax credits and the private world coming into building affordable.

Speaker Change: and the Democrats really want more workforce and affordable housing for people. So that's it. And it's mission critical for Freddie and Fannie and CRA credits.

Barry Gosin: So that's, and it's mission critical for Freddie and Fannie and, you know, CRA credits or institutions. So I think that's a growing industry and we're a big player in the affordable space around the country, certainly Old Times Section 8 and LIHTC, so that's all good for housing.

Speaker Change: or institutions, so I think that's a growing industry and we're a big player in the affordable space.

Speaker Change: around the country, certainly old-time Section 8 and LIHTC. So that's all good for housing.

Michael Rispoli: So, that's, that's, that's all good for, for housing.

Michael Rispoli: Yeah, Patrick, I would add that, you know, our multi-family debt business is up about 13% year-to-date and our GSE pipelines look pretty good going forward. You know, while the, you know, the industry is not going to hit the caps, it, it shouldn't look pretty healthy in the back half of the year, and then our pipelines look strong.

Michael Rispoli: Yeah Patrick, I would add that our multifamily debt business is up about 13% year-to-date, and our GSE pipelines look pretty good going forward. You know, while the industry is not going to hit the caps, it should look pretty healthy in the back half of the year, and our pipelines look strong.

Speaker Change: Yeah, Patrick, I would add that our multifamily debt business is up about 13% year-to-date.

Patrick O'Shaughnessy: And our GSE pipelines look pretty good going forward. You know, while the...

Speaker Change: you know, the industry is not going to hit the caps, it should look pretty healthy in the back half of the year, and our pipelines look strong. Are you saying just origin, originations of GSE or generally loans in general? Because we are, our debt business is going through the roof.

Barry Gosin: Are you saying just origination of the GSE or generally loans in general? Because we are debt business is going through the roof. We have an enormous amount of an enormous pipeline for recaps and financings in every aspect of our business. I've never, we've never had as much as we have now. Gotcha. I know you answered my question. Thank you.

Larry Gosson: Are you saying just originates, originates in GSE or generally loans in general? Because we, our debt business is going through the roof. We, we have an enormous amount of an enormous pipeline for recaps and financing in every aspect of our business. I've never; we've never had as much as we have now.

Speaker Change: We have an enormous amount of, an enormous pipeline for recaps and financings.

Speaker Change: in every aspect of our business. I've never, we've never had as much as we have now.

Patrick O'Shaughnessy: Gotcha. I know you answered my question to you.

Patrick O'Shaughnessy: Maybe filling up that, what is new works ability to participate in the conversion of office structures into multi-family? I can; I couldn't get your question.

Speaker Change: Gotcha, I know you answered my question. Thank you. Maybe building off that, what is Newmark's ability to participate in the conversion of office structures into multifamily?

Patrick O'Shaughnessy: I can't; I couldn't hear that question.

Patrick O'Shaughnessy: What is Newmark's ability to participate in the conversion of outdated office properties into multifamily properties?

Larry Gosson: What is new work's ability to participate in the conversion of outdated office properties into multi-family properties? Well, we, the two largest in the country, were sold by NewMark, financed by NewMark, the equity was raised by NewMark, 22 Water, 25 Water downtown, which is 900,000 feet, in just in New York City, allowing 222 Broadway, which we sold and financed, which is another very large project in New York. We've been actively involved both on the legislative side of creating the programs and recommending programs, certainly in New York State, and I think pretty much everywhere in the country.

Speaker Change: I can't, I couldn't hear that question.

Speaker Change: What is Newmark's ability to participate in the conversion of outdated office properties into multifamily properties?

Barry Gosin: Well, the two largest in the country were sold by Newmark, financed by Newmark, the equity was raised by Newmark, 25 Water downtown, which is 900,000 feet, and just in New York City alone, 222 Broadway, which we sold and financed, which is another very large project in New York. We've been actively involved both on the legislative side of creating the programs and recommending programs, certainly in New York State and, I think, pretty much everywhere in the country. So we're involved in it in many respects.

Speaker Change: Well we, the two largest

Speaker Change: in the country were sold by Newmark, financed by Newmark, the equity was raised by Newmark.

Speaker Change: Twenty-five water downtown, which is 900,000 feet, and just in New York City alone, 222 Broadway, which we sold and financed.

Speaker Change: It's another very large project in New York. We've been actively involved both on the legislative side of creating the programs and recommending programs, certainly in New York State, and I think pretty much everywhere in the country. So, we're, you know, we're, we, we're involved in it.

Larry Gosson: So we're, you know, we're, we're involved in it in many, in many respects.

Larry Gosson: So, and that's certainly that's in the markets where there's inventory that is not suitable for first class office, you know, like New York. But other cities around the country are looking at this as an incredible opportunity to repurpose office buildings are outdated into either affordable hotels or multi-families. Some, and they're hard, but you know, some of the buildings are so deep, the floor is so deep, you can create light wells. It's really a function of the cost and what the yield to cost is in developing those buildings, and depending on the amount of light and how the building situated will determine that.

Barry Gosin: So, and that's certainly true in markets where there's inventory that is not suitable for first class office, you know, like New York, but other other cities around the country are looking at this as an incredible opportunity to repurpose office buildings that are outdated into either affordable hotels or multifamily some, and they're hard. But, you know, some of the buildings are so deep. The floor is so deep there that you can create light. Well, it's really a function of the cost and what the yield to cost is in developing those buildings, and depending on the amount of light and how the building is situated will determine that.

Speaker Change: in many respects.

Speaker Change: So, and that's that's certainly that's in the markets where there's a inventory that is not suitable for first class office.

Speaker Change: You know, like New York, but other other cities around the country are looking at this as an incredible opportunity to repurpose office buildings are outdated into either affordable.

Speaker Change: hotels or multifamily. And they're hard, but some of the buildings are so deep, the floors are so deep, you can create light wells. It's really a function of the cost and what the yield to cost is.

Speaker Change: in developing those buildings and depending on the amount of light and how the building is situated will determine that.

Patrick O'Shaughnessy: Got it. Thank you.

Patrick O'Shaughnessy: Got it. Thank you. And the last one for me. So, pretty strong second quarter. The macro backdrop seems to have become more favorable at this point. What was the thought process behind leaving all your outlook essentially unchanged versus maybe raising your outlook? Sure.

Patrick O'Shaughnessy: And then last one from me, so a pretty strong second quarter. The macro backdrop seems to be becoming more favorable at this point. What's the thought process behind all your outlook? You said unchanged versus maybe raising your outlook? Sure. So, as you probably remember, we outperformed the peer group by a pretty wide margin last year and, in particular, we had a really strong fourth quarter with the largest loan sale in U.S. history. So, you know, we're up against a little bit of a tough comp in the fourth quarter. We're seeing obviously good pipeline build throughout our businesses.

Speaker Change: Got it, thank you. And the last one from me, so a pretty strong second quarter, the macro backdrop seem to be becoming more favorable at this point. What was the thought process behind leaving all your outlook essentially unchanged versus maybe raising your outlook?

Michael Rispoli: So, as you probably remember, we outperformed the peer group by a pretty wide margin last year. And in particular, we had a really strong fourth quarter with the largest loan sale in US history. So we're up against a little bit of a tough comp in the fourth quarter.

Speaker Change: Sure.

Speaker Change: So, as you probably remember, we outperformed the peer group by a pretty wide margin last year and

Speaker Change: In particular, we had a really strong fourth quarter with the largest loan sale in U.S. history. So, you know, we're up against a little bit of a tough comp in the fourth quarter.

Michael Rispoli: We're seeing, obviously, good pipeline build throughout our businesses. We feel really good about where the guidance is right now, and you can never predict the timing of when these transactions will start to close. So things look good going forward. And certainly, over the next few years, we feel really great about the business.

Speaker Change: We're seeing...

Michael Rispoli: We feel really good about where the guidance is right now. And you can never predict the timing of when these transactions will start to close. So things look good going forward.

Speaker Change: Obviously good pipeline build throughout our businesses. We feel really good about where the guidance is right now.

Speaker Change: And you can never predict timing of when these transactions will start to close. So, things look good going forward and certainly over the next few years, we feel really great about the business.

Michael Rispoli: And certainly, over the next few years, we feel really great about the business.

Barry Dawson: Thank you. We currently do not have any further questions.

Speaker Change: Thank you.

Operator: We currently do not have any further questions. I would like to turn the call back to Mr. Barry Gosin to close out the call.

Barry Dawson: I would like to turn the call back to Mr. Barry Dawson to close out the call. Thank you for joining us again. Look forward to the next quarter.

Speaker Change: We currently do not have any further questions. I would like to turn the call back to Mr. Barry Gosin to close out the call.

Barry Gosin: Thank you for joining us again. I look forward to the next quarter, am very excited about our future, and hope to hear from you again.

Operator: This concludes today's call. Thank you for your participation. You may now disconnect.

Barry Dawson: Very excited about our future and hope to hear from you again. Thanks.

Barry Gosin: Thank you for joining us again. Look forward to the next quarter. I'm very excited about our future and hope to hear from you again.

Operator: This concludes today's call. Thank you for your participation.

Speaker Change: Thanks.

Operator: You may now disconnect.

Speaker Change: This concludes today's call. Thank you for your participation. You may now disconnect.