NASDAQ:NMRK Newmark Group Q4 2023 Earnings Report $11.30 +0.12 (+1.07%) As of 02:06 PM Eastern Earnings HistoryForecast Newmark Group EPS ResultsActual EPS$0.46Consensus EPS $0.46Beat/MissMet ExpectationsOne Year Ago EPS$0.32Newmark Group Revenue ResultsActual Revenue$747.70 millionExpected Revenue$743.53 millionBeat/MissBeat by +$4.17 millionYoY Revenue GrowthN/ANewmark Group Announcement DetailsQuarterQ4 2023Date2/22/2024TimeBefore Market OpensConference Call DateThursday, February 22, 2024Conference Call Time10:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)SEC FilingEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Newmark Group Q4 2023 Earnings Call TranscriptProvided by QuartrFebruary 22, 2024 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:01Good day, and welcome to the Newmark Group 4Q and FY 2023 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jason McGruder, Head of Investor Relations. Please go ahead. Speaker 100:00:18Thank you, operator, and good morning. Newmark issued its Q4 and full year 2023 financial results press release and presentation this morning. Unless otherwise stated, the results provided on today's call compare only the 3 months ending December 31, 2023 with a year earlier period. Except as otherwise specified, we will be referring to our results only on a non GAAP basis, which includes the term adjusted earnings and adjusted EBITDA. Please refer to the section in today's press release for complete and or updated definition of any non GAAP terms, reconciliation of these items to the corresponding GAAP results and how, when and why management uses them. Speaker 100:00:58Unless otherwise stated, any figures discussed today with respect to cash flow from operations refer to net cash provided by operating activities excluding loan origination and sales. Cash generated by the business is the latter cash flow metric before the impact of loans, forgivable loans and other receivables from employees and partners and the impact of the 2021 equity event. For more information on these cash flow items, our GAAP and non GAAP results and the industry statistics mentioned today, see our website, today's press release, the supplemental Excel tables and or the presentation. Our outlook discussed today assumes no material acquisitions or meaningful changes in this company's stock price. Our expectations are subject to change based on various macroeconomic, social, political and other factors. Speaker 100:01:48None of our long term targets or goals beyond 2024 should be considered formal guidance. I also remind you that information on this call about our business that are not historical facts are forward looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1933 as amended. Such statements involve risks and uncertainties. Except as required by law, Newmark undertakes no obligation to update any forward looking statement. For a complete discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to, the risk factors in our most recent Form 10 ks, Form 10 Q or Form 8 ks filings, which are incorporated by reference. Speaker 100:02:36I am now happy to turn the call over to our host, Barry Gosin, Chief Executive Officer of Newmark. Speaker 200:02:42Good morning and thank you for joining us. Newmark's revenues increased by over 23% in the quarter with double digit gains across every revenue category. We completed the more than $50,000,000,000 Signature Portfolio sale, the largest real estate loan sale in U. S. History. Speaker 200:03:02We also closed the largest industrial occupier lease, the largest office tenant lease and the largest office building sale in the United States. Newmark is successfully executing on its strategy of being the best in each of its service lines. In addition to completing the largest transactions in the industry, we generated 20% revenue growth from management services, servicing fees and other. This improvement reflected a more than doubling of our high margin asset management and servicing portfolio to $176,000,000,000 the addition of Jerali and continued organic growth from GCS. Newmark improved its leasing revenues by 20%, while overall industry leasing activity declined by more than 10%. Speaker 200:03:52Our significant outperformance was driven by strong double digit organic growth in office and industrial. We also gained meaningful market share in capital markets. Newmark was the number 2 broker in U. S. Investment sales for the Q4 of 2023 and number 3 for the full year, which excludes the $22,000,000,000 equity portions of Signature transactions. Speaker 200:04:16We continue to progress towards our goal of becoming the number one capital markets advisor in the U. S. We attract the best of the best. Already in 2024, we hired the preeminent affordable housing team, some of the most prolific and experienced debt and structured finance professionals, as well as one of the most innovative and active U. S. Speaker 200:04:37Leasing teams. We empower our extraordinary talent with world class research, data analytics, and technology to bring their best to Newmark's clients. We refuse to let complacency impede progress in this rapidly evolving industry, And we champion the entrepreneurial spirit. If you are great, you should be at Newmark. The MBA expects a record $929,000,000,000 of commercial and multifamily mortgage maturities in 2024. Speaker 200:05:11We estimate that about 1 third are underwater and reasonably likely to be sold. One third will need assistance with restructuring or recapitalization, and onethree will likely require an advisor to help find new lenders. As a service provider that does not own real estate, these maturities represent an enormous opportunity for us. This refinancing wave is expected to drive double digit increases in commercial and multifamily originations this year and next. The difficulties that our clients may face will continue to drive them to seek our innovative financing solutions. Speaker 200:05:53We expect both existing owners as well as lenders who receive properties in foreclosure to turn to Newmark for the following services: finding new sources of capital, including equity recaps and joint ventures selling loans selling properties property management, valuation and advisory, asset management and servicing and agency leasing. With respect to leasing, vacancies remain below long term averages in nearly all property types in the U. S. And UK, except for office, which remains challenged outside of premium Class A properties. Quality office assets continue to command a disproportionate share of the market's activity. Speaker 200:06:35Class A properties accounted for 53% of all U. S. Office leasing in the Q4 of 2023. New construction pipelines have fallen significantly from the Q1 2020 peak and a small but growing percentage of office buildings are being converted to other uses. In addition, owners and lenders are reaching the end of their ability to extend and pretend with respect to mortgages. Speaker 200:07:00The recapitalization of these properties will lead to a reset in values and stronger leasing activity. We continue to expect solid fundamentals with respect to industrial and retail leasing, which together represented over 40% of Newmark's leasing revenue in 2023 compared with just over 25% in 2019. We expect transaction volumes to accelerate in the second half of twenty twenty four, which coupled with Newmark's investments in Talend will drive our industry leading revenue growth. With that, I'm happy to turn the call over to our CFO, Mike Rispoli. Speaker 300:07:36Thank you, Barry, and good morning. We increased total revenues by 23.1% to $747,400,000 producing double digit growth in every revenue category. Fees from management services, servicing and other grew by 19.4%. This improvement reflected the addition of Gerald Leag, an increase in our high margin asset management and servicing portfolio to $175,900,000,000 and continued organic growth from GCS. We improved our leasing revenues by 19.6%, driven by strong double digit organic growth in office and industrial. Speaker 300:08:17This was the 4th consecutive quarter of leasing market share gains for Newmark as overall industry leasing activity was down by over 10%. We improved our investment sales and origination revenues by 20.7% and 45.9%, respectively, and outpaced the market in each of these categories. Industry wide investment sales activity was down by over 40% in the U. S. And Europe, while U. Speaker 300:08:44S. Commercial and multifamily originations decreased by 25%. We also gained market share in GSE origination as our volumes declined by approximately 11% compared to the 42% reduction in industry wide activity. Turning to expenses. Compensation expenses were up 23.6%, mainly due to higher commissions tied to revenue, as well as expenses related to acquired companies and the hiring of revenue generating professionals under long term contracts. Speaker 300:09:19Non compensation expenses were up 8% due to a $10,300,000 increase in past year expenses. Total expenses were up by 19.2%. With respect to the company's $75,000,000 cost reduction initiative, Newmark recognized approximately $35,000,000 in savings in 2023 and expects to realize an incremental $25,000,000 in 2024 with the balance of the savings realized in 2025. Turning to earnings. Our adjusted earnings per share grew by 43.8 percent to $0.46 and our adjusted EBITDA improved to $166,200,000 up 62.6 percent. Speaker 300:10:05Our quarterly adjusted earnings tax rate was 14.8% compared with 9.3% a year earlier. Our full year 2023 adjusted earnings tax rate was 15.1% as compared to 17.1% in 2022. Our fully diluted weighted average share count was consistent with guidance of approximately $250,000,000 for the quarter $246,000,000 for the full year. Turning to the balance sheet. We ended the year with $164,900,000 of cash and cash equivalents. Speaker 300:10:42The change from year end 2022 reflects $341,200,000 of cash generated by the business and $105,500,000 from the redemption of a joint venture. These receipts of cash were partially offset by $325,800,000 of cash invested for acquisitions and producers. Other uses of cash included capital expenditures and return of capital to shareholders. Our net leverage ratio was 1.0 as of year end 2023. Last month, we successfully completed the refinancing of our long term debt by issuing $600,000,000 of 5 year senior notes at 7.5%. Speaker 300:11:30Moving to our outlook for the full year 2024 compared to 2023. We expect total revenues to grow between 3% 7%. We anticipate both adjusted EBITDA and earnings per share to grow between 5% to 9%. We expect our fully diluted weighted average share count to increase by approximately 2% and we expect our adjusted earnings tax rate to be between 16% 18%. Due to the scale of our hiring and our significant outperformance in the Q4 of 2023, we expect the majority of our year over year improvement in earnings to occur in the 2nd and third quarters of 2024. Speaker 300:12:16As Barry discussed, we expect industry volumes to pick up in the back half of twenty twenty 4 and into 2025. Once volumes fully normalize, which we expect to be around the middle of 2025 and given our substantial investments, we expect our business to generate on an annual basis over $3,000,000,000 in revenue and over $630,000,000 in adjusted EBITDA. And with that, I would like to open the call for questions. Operator00:12:46Thank And our first question will come from Connor Mitchell with Piper Sandler. Speaker 400:13:14Hey, good morning. Thanks for taking my question. So thinking about the revenue outlook you guys outlined, can you just share a little bit more about how you're thinking of each line items growth over the year in order to achieve that total revenue growth of the 3% to 7%. I know Barry touched on a few of them. Maybe you guys could provide some numbers or just some further outline on your thinking to reach that total growth number? Speaker 300:13:43Sure. Good morning. Yes, I would say that certainly we had great leasing performance in 2023. Our expectation is that because we gained so much market share this year that line item could be somewhat flat in 2024 maybe even down a little. And the growth will come from our management businesses as we continue to grow those businesses. Speaker 300:14:10And our capital markets businesses, I think Barry mentioned debt industry wide will be up probably 20% or more. And we think we'll see some more sales activity because of the debt maturity of all that's coming. Speaker 400:14:28Okay. That's helpful. And then Barry touched on in the opening remarks, you guys have brought in a lot of great talent, the top affordable housing advisory team, debt and structured finances. Is there anywhere that you guys are kind of eyeing the next moves, maybe some product lines or geographies, sector, specialties, etcetera, maybe you guys want to increase your bench or just add some more depth in that area? Speaker 200:15:06I mean, we're always adding talent. That is really our strategy about adding talent. We added affordable, which has implications with Freddie and Fannie. It's mission critical to the GSE business. So we're excited about that opportunity. Speaker 200:15:24We've brought in and strengthened our debt and structured finance, certainly with $2,600,000,000,000 of debt maturing over the next few years. Many of these loans are going to need help that will offer up as an opportunity, so we strengthen that bench. There are some white spaces in the U. S. And then we're growing across Europe, but we're we always continue to look for talent that fills a spot. Speaker 400:15:55Okay. Appreciate the color. Thank you. Operator00:16:10Our next question will come from Jade Rahmani with KBW. Speaker 500:16:16Thank you very much. I realize there's not too much you can disclose, but on Signature, I want to confirm there's no revenue expectation in 2024? Speaker 300:16:30Good morning, Jade. Yes, I can confirm that. Speaker 500:16:33And do you know roughly speaking where investment sales commission percentage rates and debt brokerage commission percentage rates would be ex Signature in the 4th quarter? Speaker 300:16:49I would say that they're within Speaker 200:16:57We gave market share without this. We gave market share without the signature transactions. Speaker 500:17:04Yes. It certainly appears that way based on the data that we've seen. Wanted to ask about the outlook again and the phone was a bit difficult to hear. Did you say debt capital markets volumes would be up 20% or more, there would be growth in investment sales and that leasing would be down a little bit? Speaker 300:17:28Yes, that's generally correct. I said, because of our leasing outperformance in 'twenty three, our expectation going into the year is somewhat flat for 'twenty four. It could be down a little. We expect to continue to see growth in management services and our management business is generally our servicing business. The NBA expects debt to be up around 20% year over year in 24%. Speaker 300:17:55And we would expect maintain or grow our market share there. And then we would expect sales activity to be up year over year as well. Speaker 500:18:05And then the GSEs, Walker and Dunlop and I think Cushman and Wakefield, both expect volumes to be relatively flat in 2024. I mean that does go against their historical countercyclical role in the market, but they're being much more judicious in terms of what they accept for origination. Do you expect GSE volumes within your business to be flattish? Speaker 200:18:36We disagree with Warfar and Dunlop. We think that the GSE business will hit their caps or get closer to caps. We also believe that we will gain market share certainly getting into the affordable space, which adds we are now building out a private client part of our business. So some of the smaller institutional quality deals will offer up more mission critical for Freddie and Fannie. Speaker 500:19:10And just lastly on the recruitment front, there's been some high profile departures of late, so called superstar producers. Does that characterize the types of folks you're looking to recruit or would you be looking to recruit smaller infill teams that are more niche focused? Speaker 200:19:36A little of both. We're always looking for great talent and that's exceptional people brings exceptional results. Speaker 500:19:48Thanks very much. Operator00:19:56Thank you. And that does conclude the question and answer session. I'll now hand the conference back over to you. Speaker 200:20:04I want to thank everybody for joining us today and look forward to next quarter. Thanks. Operator00:20:12Thank you. That does conclude today's conference. We do thank you for your participation. Have an excellent day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallNewmark Group Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) Newmark Group Earnings HeadlinesPiper Sandler Issues Pessimistic Forecast for Newmark Group (NASDAQ:NMRK) Stock PriceMay 7 at 2:31 AM | americanbankingnews.comHarwood to Fuel Accelerated Expansion of Dallas' Y'all StreetMay 5 at 10:48 AM | prnewswire.comThe Trump Dump is starting; Get out of stocks now?The first 365 days of the Trump presidency… Will be the best time to get rich in American history.May 8, 2025 | Paradigm Press (Ad)Newmark Group, Inc. (NASDAQ:NMRK) Q1 2025 Earnings Call TranscriptMay 2, 2025 | msn.comNewmark: Above-Expectations Results Overshadowed By Unchanged Guidance (Downgrade)May 1, 2025 | seekingalpha.comNewmark Group shares fall as guidance overshadows Q1 beatMay 1, 2025 | investing.comSee More Newmark Group Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Newmark Group? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Newmark Group and other key companies, straight to your email. Email Address About Newmark GroupNewmark Group (NASDAQ:NMRK) provides commercial real estate services in the United States, the United Kingdom, and internationally. The company offers capital markets consisting of investment sales and commercial mortgage brokerage; landlord or agency representation leasing; valuation and advisory; property management; commercial real estate technology platform and capabilities; the United Kingdom business rates services; due diligence, consulting, and other advisory services; GSEs and the Federal Housing Administration lending services comprising multifamily lending and loan servicing; asset management; and flexible workspace solutions for owners. It also provides tenant representation leasing; and global corporate services consisting of workplace and occupancy strategy, energy and sustainability services, technology, project management, real estate and lease administration, and facilities management. The company offers its services to commercial real estate tenants, investors, owners, occupiers, and developers; lenders; small and medium size businesses; and multi-national corporations. The company was formerly known as Newmark Grubb Knight Frank Capital Group and changed its name to Newmark Group, Inc. in October 2017. Newmark Group, Inc. was founded in 1929 and is based in New York, New York. 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There are 6 speakers on the call. Operator00:00:01Good day, and welcome to the Newmark Group 4Q and FY 2023 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jason McGruder, Head of Investor Relations. Please go ahead. Speaker 100:00:18Thank you, operator, and good morning. Newmark issued its Q4 and full year 2023 financial results press release and presentation this morning. Unless otherwise stated, the results provided on today's call compare only the 3 months ending December 31, 2023 with a year earlier period. Except as otherwise specified, we will be referring to our results only on a non GAAP basis, which includes the term adjusted earnings and adjusted EBITDA. Please refer to the section in today's press release for complete and or updated definition of any non GAAP terms, reconciliation of these items to the corresponding GAAP results and how, when and why management uses them. Speaker 100:00:58Unless otherwise stated, any figures discussed today with respect to cash flow from operations refer to net cash provided by operating activities excluding loan origination and sales. Cash generated by the business is the latter cash flow metric before the impact of loans, forgivable loans and other receivables from employees and partners and the impact of the 2021 equity event. For more information on these cash flow items, our GAAP and non GAAP results and the industry statistics mentioned today, see our website, today's press release, the supplemental Excel tables and or the presentation. Our outlook discussed today assumes no material acquisitions or meaningful changes in this company's stock price. Our expectations are subject to change based on various macroeconomic, social, political and other factors. Speaker 100:01:48None of our long term targets or goals beyond 2024 should be considered formal guidance. I also remind you that information on this call about our business that are not historical facts are forward looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1933 as amended. Such statements involve risks and uncertainties. Except as required by law, Newmark undertakes no obligation to update any forward looking statement. For a complete discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to, the risk factors in our most recent Form 10 ks, Form 10 Q or Form 8 ks filings, which are incorporated by reference. Speaker 100:02:36I am now happy to turn the call over to our host, Barry Gosin, Chief Executive Officer of Newmark. Speaker 200:02:42Good morning and thank you for joining us. Newmark's revenues increased by over 23% in the quarter with double digit gains across every revenue category. We completed the more than $50,000,000,000 Signature Portfolio sale, the largest real estate loan sale in U. S. History. Speaker 200:03:02We also closed the largest industrial occupier lease, the largest office tenant lease and the largest office building sale in the United States. Newmark is successfully executing on its strategy of being the best in each of its service lines. In addition to completing the largest transactions in the industry, we generated 20% revenue growth from management services, servicing fees and other. This improvement reflected a more than doubling of our high margin asset management and servicing portfolio to $176,000,000,000 the addition of Jerali and continued organic growth from GCS. Newmark improved its leasing revenues by 20%, while overall industry leasing activity declined by more than 10%. Speaker 200:03:52Our significant outperformance was driven by strong double digit organic growth in office and industrial. We also gained meaningful market share in capital markets. Newmark was the number 2 broker in U. S. Investment sales for the Q4 of 2023 and number 3 for the full year, which excludes the $22,000,000,000 equity portions of Signature transactions. Speaker 200:04:16We continue to progress towards our goal of becoming the number one capital markets advisor in the U. S. We attract the best of the best. Already in 2024, we hired the preeminent affordable housing team, some of the most prolific and experienced debt and structured finance professionals, as well as one of the most innovative and active U. S. Speaker 200:04:37Leasing teams. We empower our extraordinary talent with world class research, data analytics, and technology to bring their best to Newmark's clients. We refuse to let complacency impede progress in this rapidly evolving industry, And we champion the entrepreneurial spirit. If you are great, you should be at Newmark. The MBA expects a record $929,000,000,000 of commercial and multifamily mortgage maturities in 2024. Speaker 200:05:11We estimate that about 1 third are underwater and reasonably likely to be sold. One third will need assistance with restructuring or recapitalization, and onethree will likely require an advisor to help find new lenders. As a service provider that does not own real estate, these maturities represent an enormous opportunity for us. This refinancing wave is expected to drive double digit increases in commercial and multifamily originations this year and next. The difficulties that our clients may face will continue to drive them to seek our innovative financing solutions. Speaker 200:05:53We expect both existing owners as well as lenders who receive properties in foreclosure to turn to Newmark for the following services: finding new sources of capital, including equity recaps and joint ventures selling loans selling properties property management, valuation and advisory, asset management and servicing and agency leasing. With respect to leasing, vacancies remain below long term averages in nearly all property types in the U. S. And UK, except for office, which remains challenged outside of premium Class A properties. Quality office assets continue to command a disproportionate share of the market's activity. Speaker 200:06:35Class A properties accounted for 53% of all U. S. Office leasing in the Q4 of 2023. New construction pipelines have fallen significantly from the Q1 2020 peak and a small but growing percentage of office buildings are being converted to other uses. In addition, owners and lenders are reaching the end of their ability to extend and pretend with respect to mortgages. Speaker 200:07:00The recapitalization of these properties will lead to a reset in values and stronger leasing activity. We continue to expect solid fundamentals with respect to industrial and retail leasing, which together represented over 40% of Newmark's leasing revenue in 2023 compared with just over 25% in 2019. We expect transaction volumes to accelerate in the second half of twenty twenty four, which coupled with Newmark's investments in Talend will drive our industry leading revenue growth. With that, I'm happy to turn the call over to our CFO, Mike Rispoli. Speaker 300:07:36Thank you, Barry, and good morning. We increased total revenues by 23.1% to $747,400,000 producing double digit growth in every revenue category. Fees from management services, servicing and other grew by 19.4%. This improvement reflected the addition of Gerald Leag, an increase in our high margin asset management and servicing portfolio to $175,900,000,000 and continued organic growth from GCS. We improved our leasing revenues by 19.6%, driven by strong double digit organic growth in office and industrial. Speaker 300:08:17This was the 4th consecutive quarter of leasing market share gains for Newmark as overall industry leasing activity was down by over 10%. We improved our investment sales and origination revenues by 20.7% and 45.9%, respectively, and outpaced the market in each of these categories. Industry wide investment sales activity was down by over 40% in the U. S. And Europe, while U. Speaker 300:08:44S. Commercial and multifamily originations decreased by 25%. We also gained market share in GSE origination as our volumes declined by approximately 11% compared to the 42% reduction in industry wide activity. Turning to expenses. Compensation expenses were up 23.6%, mainly due to higher commissions tied to revenue, as well as expenses related to acquired companies and the hiring of revenue generating professionals under long term contracts. Speaker 300:09:19Non compensation expenses were up 8% due to a $10,300,000 increase in past year expenses. Total expenses were up by 19.2%. With respect to the company's $75,000,000 cost reduction initiative, Newmark recognized approximately $35,000,000 in savings in 2023 and expects to realize an incremental $25,000,000 in 2024 with the balance of the savings realized in 2025. Turning to earnings. Our adjusted earnings per share grew by 43.8 percent to $0.46 and our adjusted EBITDA improved to $166,200,000 up 62.6 percent. Speaker 300:10:05Our quarterly adjusted earnings tax rate was 14.8% compared with 9.3% a year earlier. Our full year 2023 adjusted earnings tax rate was 15.1% as compared to 17.1% in 2022. Our fully diluted weighted average share count was consistent with guidance of approximately $250,000,000 for the quarter $246,000,000 for the full year. Turning to the balance sheet. We ended the year with $164,900,000 of cash and cash equivalents. Speaker 300:10:42The change from year end 2022 reflects $341,200,000 of cash generated by the business and $105,500,000 from the redemption of a joint venture. These receipts of cash were partially offset by $325,800,000 of cash invested for acquisitions and producers. Other uses of cash included capital expenditures and return of capital to shareholders. Our net leverage ratio was 1.0 as of year end 2023. Last month, we successfully completed the refinancing of our long term debt by issuing $600,000,000 of 5 year senior notes at 7.5%. Speaker 300:11:30Moving to our outlook for the full year 2024 compared to 2023. We expect total revenues to grow between 3% 7%. We anticipate both adjusted EBITDA and earnings per share to grow between 5% to 9%. We expect our fully diluted weighted average share count to increase by approximately 2% and we expect our adjusted earnings tax rate to be between 16% 18%. Due to the scale of our hiring and our significant outperformance in the Q4 of 2023, we expect the majority of our year over year improvement in earnings to occur in the 2nd and third quarters of 2024. Speaker 300:12:16As Barry discussed, we expect industry volumes to pick up in the back half of twenty twenty 4 and into 2025. Once volumes fully normalize, which we expect to be around the middle of 2025 and given our substantial investments, we expect our business to generate on an annual basis over $3,000,000,000 in revenue and over $630,000,000 in adjusted EBITDA. And with that, I would like to open the call for questions. Operator00:12:46Thank And our first question will come from Connor Mitchell with Piper Sandler. Speaker 400:13:14Hey, good morning. Thanks for taking my question. So thinking about the revenue outlook you guys outlined, can you just share a little bit more about how you're thinking of each line items growth over the year in order to achieve that total revenue growth of the 3% to 7%. I know Barry touched on a few of them. Maybe you guys could provide some numbers or just some further outline on your thinking to reach that total growth number? Speaker 300:13:43Sure. Good morning. Yes, I would say that certainly we had great leasing performance in 2023. Our expectation is that because we gained so much market share this year that line item could be somewhat flat in 2024 maybe even down a little. And the growth will come from our management businesses as we continue to grow those businesses. Speaker 300:14:10And our capital markets businesses, I think Barry mentioned debt industry wide will be up probably 20% or more. And we think we'll see some more sales activity because of the debt maturity of all that's coming. Speaker 400:14:28Okay. That's helpful. And then Barry touched on in the opening remarks, you guys have brought in a lot of great talent, the top affordable housing advisory team, debt and structured finances. Is there anywhere that you guys are kind of eyeing the next moves, maybe some product lines or geographies, sector, specialties, etcetera, maybe you guys want to increase your bench or just add some more depth in that area? Speaker 200:15:06I mean, we're always adding talent. That is really our strategy about adding talent. We added affordable, which has implications with Freddie and Fannie. It's mission critical to the GSE business. So we're excited about that opportunity. Speaker 200:15:24We've brought in and strengthened our debt and structured finance, certainly with $2,600,000,000,000 of debt maturing over the next few years. Many of these loans are going to need help that will offer up as an opportunity, so we strengthen that bench. There are some white spaces in the U. S. And then we're growing across Europe, but we're we always continue to look for talent that fills a spot. Speaker 400:15:55Okay. Appreciate the color. Thank you. Operator00:16:10Our next question will come from Jade Rahmani with KBW. Speaker 500:16:16Thank you very much. I realize there's not too much you can disclose, but on Signature, I want to confirm there's no revenue expectation in 2024? Speaker 300:16:30Good morning, Jade. Yes, I can confirm that. Speaker 500:16:33And do you know roughly speaking where investment sales commission percentage rates and debt brokerage commission percentage rates would be ex Signature in the 4th quarter? Speaker 300:16:49I would say that they're within Speaker 200:16:57We gave market share without this. We gave market share without the signature transactions. Speaker 500:17:04Yes. It certainly appears that way based on the data that we've seen. Wanted to ask about the outlook again and the phone was a bit difficult to hear. Did you say debt capital markets volumes would be up 20% or more, there would be growth in investment sales and that leasing would be down a little bit? Speaker 300:17:28Yes, that's generally correct. I said, because of our leasing outperformance in 'twenty three, our expectation going into the year is somewhat flat for 'twenty four. It could be down a little. We expect to continue to see growth in management services and our management business is generally our servicing business. The NBA expects debt to be up around 20% year over year in 24%. Speaker 300:17:55And we would expect maintain or grow our market share there. And then we would expect sales activity to be up year over year as well. Speaker 500:18:05And then the GSEs, Walker and Dunlop and I think Cushman and Wakefield, both expect volumes to be relatively flat in 2024. I mean that does go against their historical countercyclical role in the market, but they're being much more judicious in terms of what they accept for origination. Do you expect GSE volumes within your business to be flattish? Speaker 200:18:36We disagree with Warfar and Dunlop. We think that the GSE business will hit their caps or get closer to caps. We also believe that we will gain market share certainly getting into the affordable space, which adds we are now building out a private client part of our business. So some of the smaller institutional quality deals will offer up more mission critical for Freddie and Fannie. Speaker 500:19:10And just lastly on the recruitment front, there's been some high profile departures of late, so called superstar producers. Does that characterize the types of folks you're looking to recruit or would you be looking to recruit smaller infill teams that are more niche focused? Speaker 200:19:36A little of both. We're always looking for great talent and that's exceptional people brings exceptional results. Speaker 500:19:48Thanks very much. Operator00:19:56Thank you. And that does conclude the question and answer session. I'll now hand the conference back over to you. Speaker 200:20:04I want to thank everybody for joining us today and look forward to next quarter. Thanks. Operator00:20:12Thank you. That does conclude today's conference. We do thank you for your participation. Have an excellent day.Read morePowered by