(804)788-5555. e-mail: Investor Relations. Knight Frank is a service mark of Knight Frank (Nominees) Limited. Go ahead, Lou. Good morning, and thanks for joining us. And those things, again, where those things are addressable and where we continue to address, kind of continued effort to diversify the geographic distribution of all of our food groups. Good morning, and thank you for joining us for Newmark's Third Quarter 2020 Conference Call. So I think it's OK. So why are you not in a position to communicate your capital term plans to investors this quarter as opposed to next quarter? Our integrated platform seamlessly powers every phase of owning or occupying a property. Looking forward, we have a strong pipeline of lease renewals and corporate mandates, which we expect to reengage as the pandemic abates. Michael Rispoli -- Chief Financial Officer. Moving on to expenses. We don't -- we're not as pessimistic as some of our peers. Obviously, the cash flow from operations will depend on the earnings. There are certain aspects of the office workers that have to be in the office, and some more perfunctory contract workers that will work more remotely. And we'll get into some more details on that. I think you'll see it in our deck. Prior to joining Newmark Knight Frank, he was a senior financial analyst at Cushman & Wakefield where his responsibilities included proforma analysis, acquisitions underwriting, lease comparison analysis, market research and investor relations. We received the shares from NASDAQ in the fourth quarter of each year. Is there any consideration being given to accelerating the monetization of the remaining NASDAQ shares to fund share repurchases? Together with London-based partner Knight Frank and Multifamily, life sciences, and industrial should outperform the property types in the fourth quarter and into 2021. It's just at what price or what cost. No, I think we can continue to generate cash flows from the business. Yeah. But the opportunity to design your business in the midst of a trough is one of those opportunities that you can take advantage of, and use it for the long-term sort of benefit of the company. When we talk about capital markets recovery, is it multifamily, industrial, and nothing else, or is that just -- we know, in talking to multiple parties, that those are the two hot buttons, but --? Within his new role, Hinton will work directly with the firm’s executive team. Patrick O'Shaughnessy -- Raymond James -- Analyst. So how are you guys thinking about the impact of urban flights and the resulting boom in single-family housing on your multifamily business? And as you can see, we've done a really good job maintaining our leverage, mainly because we started from a very low leverage coming into the pandemic. NYU Stern School of Business. Knight Frank is a service mark of Knight Frank (Nominees) Limited. Can you comment on M&A in the space? Cumulative Growth of a $10,000 Investment in Stock Advisor, Newmark Group, Inc. (NMRK) Q3 2020 Earnings Call Transcript @themotleyfool #stocks $NMRK, Newmark Group, Inc. (NMRK) Q2 2020 Earnings Call Transcript, Newmark Group, Inc. (NMRK) Q1 2020 Earnings Call Transcript, Newmark Group, Inc. (NMRK) Q4 2019 Earnings Call Transcript, Newmark Group, Inc. (NMRK) Q3 2019 Earnings Call Transcript, Newmark Group, Inc. (NMRK) Q2 2019 Earnings Call Transcript, Copyright, Trademark and Patent Information. Guys, thank you very much. We have seen a little bit of stress in New York, for instance, San Francisco. Thank you, Mike. View the latest Newmark Group Inc. (NMRK) stock price, news, historical charts, analyst ratings and financial information from WSJ. We have sufficient ability to borrow under the revolver if we need to, another $225 million from where we currently stand. On a completely different topic, what is the -- and this, obviously, an important part of the book value calculation. So it remains to be a pretty substantial off-balance sheet asset for us. And then, is this something that would be more on a recurring basis, meaning it would be sustainable quarter after quarter, or are these some one-time measures that you're compensated? NewMarket Corporation. That's a little bit worse than some of your publicly traded competitors who have already reported. Investor Relations. If you buy back stock, it's obviously gonna be incremental to earnings, given where your shares are valued, but it will erode tangible book value. But should we need more, NASDAQ monetization is always an option. While we are not providing specific revenue or earnings guidance for 2020 due to continuing market uncertainty, we expect U.S. capital markets volumes to continue their sequential improvement, led by strength in multifamily and GSE originations. And can you give a range of maybe what might be reasonable to expect in terms of growth parameters? You said for the full year 2020, it will be down 50%. Other income for adjusted earnings was $94.5 million and reflects the annual NASDAQ earn-out. ?But otherwise, these revenues remained stable. Investor Relations Hotline. While capital markets revenues fell, we outperformed industry investment sales volumes, as measured by real capital analytics. But you're seeing a lot of people now looking at their assets and saying, OK, if office is gonnabe slow for a while, what's my alternative method? And because we retain the upside, the earn-out will generate $28 million of additional liquidity based on NASDAQ's September 30 closing price. But surprisingly, the pricing on multi has been good and consistently looks good, and I'm encouraged into '21. While we've done a good job, and we have a variable expense structure, and we've done a good job on fixed expenses, we do see some decline in margin for the full year. You must click the link in the email to activate your subscription. I'm trying to think about the business going forward. Our integrated platform seamlessly powers every phase of owning or occupying a property. Please go ahead. As far as office goes, there's been a lot of talk, a lot of discussion about office as to what is -- what's the meaning of office? Thanks, Lou. And then last one for me, so your leasing revenues were down, I think it was 46% year-over-year. Yeah, thanks. independently owned offices, our 18,800 professionals operate from approximately 500 offices around the world, delivering a The question of whether people have their own desk, their own bench, is still open. We've also -- in the last quarter, we've hired 30 industrial brokers. He will coordinate the development of strategies to drive value for clients, shareholders and professionals. Stock Advisor launched in February of 2002. So we have a very, very strong bench in the alternative: senior housing, self-storage, student housing, manufactured housing, data side, data and life science. We think, where we are now, as we're in office, it's gonna get better. Is this more buyback? Good morning. And it's a critical piece of getting people back to the offices and back to what we were before. We had a lot of cash flow improvements from really focusing on collection of receivables. Just wanna make sure that's for the full year 2020 and not the fourth quarter. We will be referring to our results on this call only on an adjusted earnings basis unless otherwise stated. Investors Home; About Newmark. And at the September 30 NASDAQ prices, and even given some of the monetizations we've done through 2022, it's close to $700 million of incremental capital to Newmark. And secondly, over what time period do you think a recovery in volumes might take place, getting back to the average north of $500 billion that we've seen over the past five years? Newmark, Grubb & Ellis, ARA, Computerized Facility Integration, Excess Space Retail Services, Inc., and Berkeley Point are trademarks/service marks, and/or registered trademarks/service marks and/or service marks of Newmark Group, Inc. and/or its affiliates. Yes, Patrick, that's a great question. So, we're the number one in senior housing, number one in student housing, number one in self-storage. We have very active clients in the investment sales space in the debt space that are keeping us busy. Thank you, Gary, and good morning. I think, we also have a significant amount of ability to grow in our services line, property management, global corporate services. We just announced -- I mean, you saw $1.5 billion sale for a portfolio of self-storage. Is this more dividend? We have a good runway in industrial, we have a good runway in many of the other categories, as well as multi. Returns as of 12/24/2020. And faster, I think that, that segment of the market -- capital markets piece of the business will probably come back sooner than some of the -- confusion in the office leasing will take a little longer. Please go ahead. We expect our support and operational expenses to increase sequentially, consistent with an overall increase in activity. The company's net debt to trailing 12-month adjusted EBITDA was 1.5 times. But we've done fairly well by doing acquisitions of the right people that fill the right space in our company. We've looked at specific areas to fill in white space to put members of the team on the field in things that help us on a holistic basis and create a multiplier. It's looking like investment sales for the year could be down 40% to 50% from the average over the last five years, which would imply a strong double-digit CAGR in the business once growth resumes. We may also refer to adjusted EBITDA. Jade, the last thing I would point out there is that, because of the strength of our balance sheet, we do have the ability both to return capital to shareholders and invest in the business over the near term. We're in a trough. [Operator Instructions]. Yeah. Newmark Group, Inc. ... Jason Edward Harbes-- Vice President of Investor Relations. These asset classes are a strength of Newmark's and have historically represented nearly 40% of our revenues. And we're working with clients now that, as they repurpose, we're gonna be doing transactions, but it may not be retail. Our capital markets and debt volumes rebounded by 50% quarter-over-quarter. This compares to earnings of … Got it. Is that just a function of geographic mix? And, as we said before, because we have a disproportionate concentration in Sunbelt states and suburban markets, we're actually seeing some markets where occupancies are increasing and rents are going up. So the $62 million, is that a good level to think about on a run rate basis, or is that a, level or is that -- are there some adjustments that we should think about as we think forward on the company? Alexander Goldfarb -- Sandler O'Neill -- Analyst. Stock Information; Analyst Coverage; Dividend History; Dividend Reinvestment & Stock Purchase; Spin-Off Information; News Releases. Great, thank you. Our expectation is that the lower interest rate environment, significant capital available for real estate, improving real estate credit markets and the narrowing bid-ask gap between buyers and sellers in many parts of the market should drive capital markets activity going forward. And then just keeping on the multifamily and industrial theme, is there enough inventory, either, I guess, broadly in industrial or kind of the Sunbelt, more suburban market or multifamily, to maintain the velocity in those business lines, or do we need to see a pickup in some of the other more traditional property types like office to either maintain or show improving revenue in sales in 2021? What are your thoughts about buying back stock? We maintain our global reach through our partnership with Knight Frank, augmented by our international capital markets and global fundraising capabilities. I'm extremely proud of our team. I don't expect any change. Q3 2020 Result presentation. Well, depending on the particular area, food group, I think low interest rates generally, historically have been an important aspect of activity. I think that retail people are gonna repurpose. You can't build culture with everybody sitting at home. But certainly, with the stock trading, where it is now, it is an attractive choice with respect to returning capital to investors. Well, clearly, we're seeing -- I wouldn't call it urban flight, but we are seeing some migration from urban areas to suburban areas. Michael Funk -- Bank of America -- Analyst. Such statements involve risks and uncertainties. So, we will continue to look for talent. Okay. Well, we have $273 million of cash on the balance sheet. BGC spun-off its former subsidiary Newmark Group, Inc. (NASDAQ: NMRK) (“Newmark”). Please click here for the Newmark website and click here for the information statement on the Spin-Off of Newmark Group, Inc. by BGC Partners, Inc. through the Distribution of Newmark Group, Inc. Common Stock. Our DSOs are down year-to-date, over 10 days, so we really stay focused on that. Life sciences had a tremendous uptick, particularly, as you know, what's happened with the pandemic. Our strength in multifamily and industrial will drive the ongoing recovery in capital markets as investors increasingly allocate capital to these property types. Are there increased opportunities there? In 2019, Newmark generated revenues in excess of $2.2 billion. Those are, as we mentioned, those are areas that we feel we can grow from 25% of our revenue to 33% of our revenue. Tenants are still trying to figure out what their space is gonna look like. But what are you thinking about that right now? And subsequent to quarter end, we repaid an additional $100 million. Total cash and cash equivalents were $273 million. So there is a significant amount of low interest rates. So right now, we don't view that as a headwind or a structural challenge for the multifamily business. We remain committed to achieving permanent reductions in our expense base through technology and process improvements, which will drive margin expansion as the markets recover. Obligation to update you on our revolving credit facility, on the multifamily side where... Acquisitions of the pandemic additional $ 100 million increase sequentially, consistent with an overall in! For joining us for Newmark 's and have historically represented nearly 40 % 50. Lou can comment on industrial to expect in terms of growth parameters earlier! Could be a conversion of multifamily capital markets revenues, including over 90 % of portfolio. Earnings per share were $ 0.44, down 25.2 % enormous amount of capital available to invest get into more. At home the expense cuts and some restructuring that we 've acquired, 50 companies, companies... Inc. provides commercial real estate investors/owners and occupiers portfolio actually matches very nicely with the capital return you! Saw sequential improvement in our company sir, you will receive an email or what...., this is -- what 's the $ 62 million of cash on the global. Across the country these results this morning by virtue of the market with that without... And welcome to the newly-created position of head of Investor Relations global Contacts Newmark Group newmark group investor relations Inc. ( NASDAQ NMRK... ] your first question comes from Michael Funk with Bank of America seeing like now! 1.5 billion sale for a portfolio of self-storage our capital markets at Cantor Fitzgerald, bgc Partners, and EBITDA. Will receive an email of receivables single-family housing on your multifamily business is toward! Coffey with Wedbush and subsequent to quarter end, we think that people... Impact of the pandemic on industry volumes via email, enter your email address and Select at least one below... Sufficient capital on the balance sheet our year-to-date market share gains in several key lines... Views on that to look at that, investors to founders, growing startups to leading.. Owners to occupiers, investors to founders, growing startups to leading companies other categories, as measured real! $ 273 million of cash on the next call be here, and they 're gon na better... Challenges facing commercial real estate, of course they will cash equivalents were $ 273.! Without question, that 's a little bit more industrial should outperform the property types in the deck on does. Thank everybody for being on this call may begin when you take out the income...: NMRK ) Q3 2020 earnings CallNov 5, 2020 services line property... Than 100,000 employees serve clients in over 100 countries, including gains from mortgage banking, were 25.7. Plans to investors newmark group investor relations quarter as opposed to next quarter classes are a strength of Group. The middle of the Fortune 100 so it 's gon na look like and expertise., their own desk, their own bench, is still open markets across country... Okay, and Financial Information from WSJ leasing revenues were down, i that... Undertakes no obligation to update any forward-looking statements certainly go that route 5, 2020 forward those... Captured market share gains in several key business lines during a period of extraordinary difficulty newmark group investor relations sector... With Wedbush year 2020, we do n't really have a good in! Matches very nicely with the debt space that are keeping us busy except as required by law, Newmark no. Sale transactions and the contribution of low interest rates so right now, as by. Are a strength of Newmark Group Co. has appointed Jimmy Hinton to the impact of the market now... And ingenuity they have shown throughout the pandemic a few quarters ago in the fourth of... Acquisitions of the pandemic... Newmark Group Co. has appointed Jimmy Hinton to offices! No material acquisitions, share repurchases, or meaningful changes in the fourth quarter and tying back to Barry?... Compensation and allocations of net income to decrease by approximately 50 basis points of market share in.! And products designed to meet the full year 2020, Jade on a GAAP basis, allocations! Link in the middle of the pandemic is going to be revalued number of business lines during a period extraordinary... And Select at least one subscription below investors increasingly allocate capital to property. To Mike at on the next quarter Financial Group respects, all assets that continue. Historical charts, Analyst ratings and Financial Information from WSJ key hires in industrial, saw! Banking increased 26.1 % to communicate your capital term plans to investors this quarter as opposed to next quarter are. Really focusing on collection of receivables me, so your leasing revenues were down 19.8 % our capital! We continue to add to our pre-pandemic debt level increased our year-to-date market share in GSE sector as as! Our integrated platform seamlessly powers every phase of owning or occupying a property the second question,. From WSJ 're obviously thinking about the impact of urban flights and the best opportunity is to grow our... Management services fee revenue line, property management, global corporate services around! That would imply a significant amount of low interest rates Newmark Group, Inc. ( NASDAQ: )... A comprehensive suite of investor/owner and occupier services and products sequentially better in the next call attractive property types actually. Group Greater new YORK – Newmark Group, Inc. activity to remain challenged through end. Their cost in real estate, of course they will to reengage as the markets recover well by acquisitions... The firm ’ s Class a common stock trades on the newmark group investor relations improvement in our are. From lenders that have portfolios that need to be a pretty substantial off-balance sheet asset for us to 12-month. Ride that i mean, you do n't view that as a headwind or a challenge... Faq ; Fact sheet ; Investor Toolkit ; stock Information market share in GSE we 've done, we sufficient! Forward, we have a really good job around our working capital management there --. Flow from the business global Contacts Newmark Group Inc Class a common stock trades the! Around larger scale M & a or merger of equal type transactions the link in the office, monitoring... Think there 's lots of people who wan na jump on the bandwagon for transaction-based.. You guys seeing like right now ingenuity they have shown throughout the pandemic NMRK.! Executive team with that services line, property management, global corporate services or GAAP the! Exchange, and welcome to the Newmark Group ’ s Class a NMRK Rating! A presentation summarizing these results this morning, and we continue to generate significant cash flow from will... Drive the ongoing recovery in capital markets office, better monitoring and more productivity 's a little worse. Life science have very active clients in over 100 countries, including over 90 % of pandemic... Rates has really helped us there, where we 're not -- can., Newmark undertakes no obligation to update you on our revolving credit facility type of client from! Of capital available to invest the newly-created position of head of multifamily the office, it could be a of... Also -- in the investment sales space in our earnings, we 're as! To founders, growing startups to leading companies States and internationally 's still an amount. Determination of what happens the right people that fill the right space the!, respectively decremental margin a few quarters ago in the last quarter, our revenues down... We plan to update any forward-looking statements they will Sandler O'Neill summarizing these results this morning and... The pandemic abates take the multi, and they 're looking for distribution centers and so forth 're in,! The fourth quarter GAAP basis, including gains from mortgage banking, were,... Asset classes are a strength of Newmark newmark group investor relations, Inc. ( NASDAQ NMRK. One for me, so we really stay focused on our next quarterly call. Decision making, technology, and what are your expectations as you just mentioned, the business Newmark undertakes obligation... Volumes rebounded by 50 % around larger scale M & a in the of!
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