NEWMARK GROUP INC

Previous wording

This discussion summarizes the significant factors affecting our results of operations and financial condition during the three and six months ended June 30, 2024 and 2023. We operate in one reportable segment, real estate services. This discussion is provided to increase the understanding of, and should be read in conjunction with, our accompanying unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

This discussion summarizes the significant factors affecting our results of operations and financial condition during the three and nine months ended September 30, 2024 and 2023. We operate in one reportable segment, real estate services. This discussion is provided to increase the understanding of, and should be read in conjunction with, our accompanying unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

With respect to our overall business, our near-term goals include becoming number one in capital markets in the United States and growing significantly larger in key international markets. This is partly because our investment sales and debt businesses have historically had a multiplier effect that drives outsized growth across many of our other service lines. When overall capital markets activity rebounds and our recently hired producers reach full productivity, we believe that our market share, revenues, and earnings can outperform the industry across our suite of services. While the macroeconomic environment may be challenging in the short term, we remain excited about our market position and our future. We are also focused on increasing the percentage of our total revenues from our recurring and/or contractual businesses, such as servicing, V&A, GCS, agency leasing, and property management. Our goals also include increasing cross-selling opportunities with and between many of these service lines and our capital markets and overall leasing businesses. We expect this to create a virtuous circle that will continue to bolster our long-term market share gains over time.

Current wording

With respect to our overall business, our near-term goals include becoming number one in capital markets in the United States and growing significantly larger in key international markets. This is partly because our investment sales and debt businesses have historically had a multiplier effect that drives outsized growth across many of our other service lines. When overall capital markets activity rebounds and our recently hired producers reach full productivity, we believe that our market share, revenues, and earnings can outperform the industry across our suite of services. We are also focused on increasing the percentage of our total revenues from our recurring and/or contractual businesses, such as servicing, V&A, GCS, agency leasing, and property management. Our goals also include increasing cross-selling opportunities with and between many of these service lines and our capital markets and overall leasing businesses. We expect this to create a virtuous circle that will continue to bolster our long-term market share gains over time.

Previous wording

We have relationships with many of the world’s largest commercial property owners, real estate developers and investors, as well as Fortune 500 and Forbes Global 2000 companies. For the six months ended June 30, 2024, we generated revenues of approximately $1.2 billion, primarily from commissions on leasing and capital markets transactions, consulting and technology user fees, property and facility management fees, and mortgage origination and loan servicing fees.

Current wording

We have relationships with many of the world’s largest commercial property owners, real estate developers and investors, as well as Fortune 500 and Forbes Global 2000 companies. For the nine months ended September 30, 2024, we generated revenues of approximately $1.9 billion, primarily from commissions on leasing and capital markets transactions, consulting and technology user fees, property and facility management fees, and mortgage origination and loan servicing fees.

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As discussed in greater detail in “—Economic Growth and Outlook in the United States and the United Kingdom” and “—Market Statistics,” origination and investment volumes in the commercial real estate industry declined year-on-year each quarter from the second half of 2022 to the fourth quarter of 2023, and were generally lower in the first half of 2024, due to the rise in global interest rates. We gained market share in the U.S. capital markets in 2023, particularly in the third and fourth quarters, as our corresponding transaction volumes either improved or decreased at rates less than those for the industry as a whole. Our share gains continued in the first and second quarters of 2024. Major central banks have stopped increasing short-term target interest rates and have begun lowering them or indicated that they may begin reducing them later this year. This, coupled with the significant amount of commercial and multifamily debt maturities due over the next three years, leads us to expect industry volumes to begin rebounding, although there remains uncertainty with respect to the exact timing of such a recovery.

Current wording

As discussed in greater detail in “— Economic Growth and Outlook in the United States and the United Kingdom” and “— Market Statistics,” origination and investment volumes in the commercial real estate industry declined year-on-year each quarter from the second half of 2022 to the fourth quarter of 2023, and were generally lower in the first half of 2024, due to the rise in global interest rates. Industry investment sales volumes stabilized in the third quarter of 2024, while commercial and multifamily origination activity accelerated its year-on-year improvement in the U.S. We gained market share in the U.S. capital markets in 2023, particularly in the third and fourth quarters, as our corresponding transaction volumes either improved or decreased at rates less than those for the industry as a whole. Our share gains continued in the first through third quarters of 2024. Most major central banks have stopped increasing short-term target interest rates or have begun lowering them. This, coupled with the significant amount of commercial and multifamily debt maturities due over the next three years, leads us to expect industry volumes to continue rebounding, although there remains uncertainty with respect to the exact timing of sustained recovery.

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We believe that during stressed or challenging times, our clients value having a trusted advisor like Newmark. We believe our partnership and collaboration with our clients during the recent uncertainty has helped us develop long-lasting relationships and gain market share over time. Despite slower industry transactional activity levels, we continue to see strong client dialogue and engagement as owners and occupiers seek our advice with respect to executing on their strategic and real estate-focused objectives.

Current wording

We believe that during stressed or challenging times, our clients value having a trusted advisor like Newmark. We believe our partnership and collaboration with our clients during the recent uncertainty has helped us develop long-lasting relationships and gain market share over time. During the recent slowdown in industry transactional activity levels, we continued to see strong client dialogue and engagement as owners and occupiers sought our advice with respect to executing on their strategic and real estate-focused objectives.

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Institutional investors have accumulated near record amounts of undeployed real estate-focused capital, with Preqin estimating that there was approximately $394 billion of investible funds held by closed-end funds at real estate focused institutions as of July 24, 2024, of which $254 billion was held by North America focused funds and $68 billion by funds focused on Europe. This is in addition to the significant amount of real estate assets held by other types of investors and owners such as publicly traded REITs, non-traded REITs, and open-ended core property funds. According to the most recent data from MSCI, the overall size of the professionally managed global real estate investment market was $13.2 trillion in 2023, while the size of the overall investible market was $19.5 trillion in 2022 (the last year for which this information was released).

Current wording

Institutional investors have accumulated significant amounts of undeployed real estate-focused capital, with Preqin estimating that there was approximately $373 billion of investible funds held by closed-end funds at real estate focused institutions as of October 23, 2024, of which $245 billion was held by North America focused funds and $65 billion by funds focused on Europe. This is in addition to the significant amount of real estate assets held by other types of investors and owners such as publicly traded REITs, non-traded REITs, and open-ended core property funds. According to the most recent data from MSCI, the overall size of the professionally managed global real estate investment market was $13.2 trillion in 2023, while the size of the overall investible market was $19.5 trillion in 2022 (the last year for which this information was released).

Previous wording

Furthermore, there was approximately $4.7 trillion in U.S. commercial and multifamily mortgage debt outstanding as of March 31, 2024 per the MBA (excluding loans for acquisitions, development, and construction, as well as loans collateralized by owner-occupied commercial properties). Of this amount, approximately $2.6 trillion is expected to mature between 2024 and 2028, with approximately $2.0 trillion of this debt expected to mature by 2026. With the sharp increase in interest rates over the past two years and generally rising capitalization rates, as well as the pullback in commercial real estate lending by banks and other traditional lenders, we believe a large and growing percentage of investors and owners will need to find alternative solutions, including via the growing share of loans we expect to be originated by alternative lenders such as private credit funds and insurance companies. We anticipate a significant portion of debt maturities to be resolved not only through refinancing, which should help our mortgage brokerage and GSE/FHA origination businesses, but also through the kinds of more complex and sophisticated financing solutions in which Newmark specializes, including restructurings, loan sales, equity joint ventures, and recapitalizations. Our capital markets clients have sought, and we believe will continue to seek, our counsel with respect to addressing their related investing and financing needs.

Current wording

Furthermore, there was approximately $4.7 trillion in U.S. commercial and multifamily mortgage debt outstanding as of June 30, 2024, per the MBA (excluding loans for acquisitions, development, and construction, as well as loans collateralized by owner-occupied commercial properties). Of this amount, approximately $2.6 trillion is expected to mature between 2024 and 2028, with approximately $2.0 trillion of this debt expected to mature by 2026. With the increase in interest rates since early 2022, and generally rising capitalization rates, as well as the pullback in commercial real estate lending by banks and other traditional lenders, we believe a large and growing percentage of investors and owners will need to find alternative solutions, including via the growing share of loans we expect to be originated by alternative lenders such as private credit funds and insurance companies. We anticipate a significant portion of debt maturities to be resolved not only through refinancing, which should help our mortgage brokerage and GSE/FHA origination businesses, but also through the kinds of more complex and sophisticated financing solutions in which Newmark specializes, including restructurings, loan sales, equity joint ventures, and recapitalizations. Our capital markets clients have sought, and we believe will continue to seek, our counsel with respect to addressing their related investing and financing needs. In addition, we anticipate better office market leasing fundamentals as the recapitalization of properties at lower values leads to a more attractive market.

Previous wording

We believe factors such as those discussed above will drive strong levels of leasing and capital markets activity over the intermediate and long-term time horizons, even as volumes remain muted in the near-term. We expect our professionals to not only provide our clients with innovative capital markets solutions, but to offer integrated services from our experts across leasing, V&A, property management, and other Newmark service lines. By using a collaborative and multidisciplinary approach, we can provide our clients with extensive industry and product expertise along regional, national, and increasingly global reach across a wide variety of property types.

Current wording

We believe factors such as those discussed above will drive strong levels of leasing and capital markets activity over the intermediate and long-term time horizons, even as volumes for certain property types and in certain geographies remain muted in the near-term. We expect our professionals to not only provide our clients with innovative capital markets solutions, but to offer integrated services from our experts across leasing, V&A, property management, and other Newmark service lines.

Previous wording

We operate a leading capital markets business in the United States with a growing international presence. We have access to many of the world’s largest owners of commercial real estate, and we believe this will drive growth throughout the life cycle of each real estate asset by allowing us to provide best-in-class agency leasing and property management during the ownership period. We also supply investment sales and arrange debt and equity financing to assist owners in maximizing the return on investment in each of their real estate assets. With respect to multifamily assets, we are a leading GSE/FHA lender by loan origination volume and loan servicing portfolio size. In addition to our traditional servicing business, we acquired the remainder of Spring11, an entity in which we had otherwise held a controlling stake since 2017, in the first quarter of 2023. Spring11’s recently launched asset management and servicing business focuses on bank, fund, and commercial mortgage-backed securities clients. As of June 30, 2024, our overall loan servicing and asset management portfolio was $175.4 billion (of which 62.2% was limited servicing and asset management, 36.4% was higher margin primary servicing, and 1.5% was special servicing).

Current wording

We operate a leading capital markets business in the United States with a growing international presence. We have access to many of the world’s largest owners of commercial real estate, and we believe this will drive growth throughout the life cycle of each real estate asset by allowing us to provide best-in-class agency leasing and property management during the ownership period. We also supply investment sales and arrange debt and equity financing to assist owners in maximizing the return on investment in each of their real estate assets. With respect to multifamily assets, we are a leading GSE/FHA lender by loan origination volume and loan servicing portfolio size. In addition to our traditional servicing business, we acquired the remainder of Spring11, an entity in which we had otherwise held a controlling stake since 2017, in the first quarter of 2023. Spring11’s recently launched asset management and servicing business focuses on bank, fund, and commercial mortgage-backed securities clients. As of September 30, 2024, our overall loan servicing and asset management portfolio was $179.1 billion (of which 62.5% was limited servicing and asset management, 36.0% was higher margin primary servicing, and 1.4% was special servicing).

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In addition, there are various trends that we expect to continue benefiting our various service lines with respect to industrial real estate. According to Newmark Research, several factors, including disruptions in global supply chains, tensions between the U.S. and China, and U.S. government spending on infrastructure and subsidies for industries associated with electrification, green energy, and strategically important technologies—notably the federal spending provided by the CHIPS and Science Act, Inflation Reduction Act, and Infrastructure and Investment and Jobs Act—could increase the size of the U.S. manufacturing base by more than 10% over the next ten years. According to Newmark Research, CoStar, and the U.S. Census Bureau, during the second quarter of 2024, annualized manufacturing construction spending in the U.S. was approximately 275% higher than the annual average for the ten years ended 2019 in nominal terms, or 130% higher based on chain linked 2007 dollars. The impact of reshoring manufacturing would likely have far-reaching effects in terms of industrial real estate, local and national tax revenues, increases in jobs, and growth in regional and national economies. Most of the new manufacturing construction will be build-to-suit or owner-built, but demand will also exist for speculative manufacturing space.

Current wording

In addition, there are various trends that we expect to continue benefiting our various service lines with respect to industrial real estate. According to Newmark Research, several factors, including disruptions in global supply chains, tensions between the U.S. and China, and U.S. government spending on infrastructure and subsidies for industries associated with electrification, green energy, and strategically important technologies—notably the federal spending provided by the CHIPS and Science Act, Inflation Reduction Act, and Infrastructure and Investment and Jobs Act—could increase the size of the U.S. manufacturing base by 6% to 10% over the next ten years. According to Newmark Research, CoStar, and the U.S. Census Bureau, during the third quarter of 2024, annualized manufacturing construction spending in the U.S. was approximately 277% higher than the annual average for the ten years ended 2019 in nominal terms, or more than 130% higher based on chain linked 2007 dollars. The impact of reshoring manufacturing would likely have far-reaching effects in terms of industrial real estate, local and national tax revenues, increases in jobs, and growth in regional and national economies. Most of the new manufacturing construction will be build-to-suit or owner-built, but demand will also exist for speculative manufacturing space.

Previous wording

Commercial real estate capital markets transactions involving financing generally utilize medium- or long-term debt, and the interest rates for such debt tend to correlate with movements in benchmark rates with similar tenors, including U.S. Treasuries. Such benchmark rates can be meaningfully impacted by movements in key short-term rates, such as the Fed Funds Target rate. Sudden increases in short term interest rates can therefore have pronounced effects on commercial mortgage origination and investment sales volumes. In 2022, global benchmark interest rates rose at the fastest pace since at least the early 1990s, according to Fitch. U.S. and U.K. ten-year government yields continued to rise through October of 2023, fell over the remainder of that year, but gradually rose over the first half of 2024. This has led to challenging market conditions across commercial real estate capital markets for Newmark and the industry. Real estate capital market transactions were also lower due to the pullback in commercial and multifamily real estate lending activity as a response to recent bank failures and higher interest rates, as well as the gap between buyer and seller expectations.

Current wording

Commercial real estate capital markets transactions involving financing generally utilize medium- or long-term debt, and the interest rates for such debt tend to correlate with movements in benchmark rates with similar tenors, including U.S. Treasuries. Such benchmark rates can be meaningfully impacted by movements in key short-term rates, such as the Fed Funds Target rate. Sudden increases in short term interest rates can therefore have pronounced effects on commercial mortgage origination and investment sales volumes. In 2022, global benchmark interest rates rose at the fastest pace since at least the early 1990s, according to Fitch. U.S. and U.K. ten-year government yields continued to rise through October of 2023, fell over the remainder of that year, but gradually rose over the first nine months of 2024. This led to challenging market conditions across commercial real estate capital markets for Newmark and the industry. Real estate capital market transactions were also lower due to the pullback in commercial and multifamily real estate lending activity as a response to recent bank failures and higher interest rates, as well as the gap between buyer and seller expectations. Most major central banks recently began lowering their short term rates. Partly as a result of this, industry capital markets volumes generally declined by less or grew year-over-year in the third quarter of 2024, as discussed below.

Previous wording

U.S. GDP expanded by 1.9% and 2.5%, in 2022 and 2023, respectively, according to the U.S. Department of Commerce (with all GDP figures herein inflation adjusted, unless otherwise stated). According to the same source, U.S. GDP expanded at an annualized rate of 1.4% and 2.8% in the first and second quarters of 2024, respectively. The most recent period’s GDP growth was driven by various factors, including increases in consumer spending, private inventory investment, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased. Economists generally expect U.S. GDP to grow in 2024 and 2025 at levels somewhat below pre-pandemic levels. For example, based on the July 19, 2024 Bloomberg consensus of economists, U.S. real GDP should expand at respective rates of 2.3%, 1.8%, and 2.0% in 2024, 2025, and 2026. For context, over the ten years ended December 31, 2019, real U.S. GDP grew at a CAGR of 2.4%, measured in chain linked 2017 dollars. Actual and projected growth has been and is expected be lower in the U.K., which is now our second largest market. According to the most recent data from The Office for National Statistics, U.K. GDP increased by 0.1% in 2023 and by 0.3% year-on-year in the first quarter of 2024. The July 15, 2024 Bloomberg consensus was for U.K. GDP to grow by 0.6% the second quarter of 2024, and by 0.8%, 1.3%, and 1.5% in full years 2024, 2025, and 2026, respectively. In comparison, real U.K. GDP grew at an annual CAGR of 2.0% over the ten years ended December 31, 2019, measured in chain linked 2019 pounds, also per Bloomberg.

Current wording

U.S. GDP expanded by 2.5% and 2.9%, in 2022 and 2023, respectively, according to the U.S. Department of Commerce (with all GDP figures herein inflation adjusted, unless otherwise stated). According to the same source, U.S. GDP expanded at an annualized rate of 1.6%, 3.0%, and 2.8%, respectively, in the first through third quarters of 2024. Economists generally expect U.S. GDP to grow in 2024 and 2025 at levels somewhat below pre-pandemic levels. For example, based on the October 25, 2024, Bloomberg consensus of economists, U.S. real GDP should expand at respective rates of 2.6%, 1.9%, and 2.0% in 2024, 2025, and 2026. For context, over the ten years ended December 31, 2019, real U.S. GDP grew at a CAGR of 2.4%, measured in chain linked 2017 dollars. Actual and projected growth has been and is expected be lower in the U.K., which is now our second largest market. According to the most recent data from The Office for National Statistics, U.K. GDP increased by 0.4% in 2023 and by 0.3% and 0.7% year-on-year in the first and second quarters of 2024, respectively. The October 15, 2024, Bloomberg consensus was for U.K. GDP to grow by 1.0%, 1.3%, and 1.5% in full years 2024, 2025, and 2026, respectively. In comparison, real U.K. GDP grew at an annual CAGR of 2.0% over the ten years ended December 31, 2019, measured in chain linked 2019 pounds, also per Bloomberg.

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According to the U.S. Bureau of Labor Statistics data from August 2, 2024, the seasonally adjusted monthly average of non-farm payroll employment increased by approximately 377,000 and approximately 251,000 in 2022 and 2023, respectively. Their estimate as of the same date was that an average of approximately 267,000 jobs and approximately 168,000 jobs, respectively, were created per month in the first and second quarters of 2024. For context, this seasonally adjusted monthly figure averaged approximately 183,000 over the ten years ended December 31, 2019. The June 2024 U.S. unemployment rate (based on U-3) was 4.1% versus 3.6% a year earlier. The July 2024 U.S. unemployment rate (based on U-3) increased to 4.3% compared with 3.5% a year earlier, while the initial estimate for the number of jobs created in July was 114,000. The July figures came in above the Bloomberg consensus of 4.1% and below the Bloomberg consensus of 175,000, respectively. The most recent Bloomberg consensus also showed U-3 rising modestly in 2024 and 2025, but remaining at or below 4.2%. According to recent figures from Bloomberg, the U.K. unemployment rate was 3.9% and 3.8% at the end of 2022 and 2023, respectively, rose to 4.4% in May 2024 (the most recent month available), and is expected to be 4.4% at the end of 2024 and 4.5% at the end 2025.

Current wording

According to the U.S. Bureau of Labor Statistics data from November 1, 2024, the seasonally adjusted monthly average of non-farm payroll employment increased by approximately 377,000 and approximately 251,000 in 2022 and 2023, respectively. Their estimate as of the same date was that an average of approximately 267,000, 147,000, and 148,000 jobs, respectively, were created per month in the first through third quarters of 2024. For context, this seasonally adjusted monthly figure averaged approximately 183,000 over the ten years ended December 31, 2019. The October 2024 U.S. unemployment rate (based on U-3) was 4.1% compared with 3.8% a year earlier, while the initial estimate for the number of jobs created in October was 12,000. The October figures were in line with the Bloomberg consensus of 4.1% and below the consensus of 100,000, respectively. The Bureau of Labor Statistics said two hurricanes that hit the Southeast U.S. likely affected hiring in some industries, but it was not possible to quantify the net effect on the change in employment, hours or earnings in October 2024. Their report also showed manufacturing jobs were negatively impacted by strike activity in October. The most recent Bloomberg consensus also showed U-3 remaining at or below 4.4% through the end of 2026. According to recent figures and/or the forward consensus from Bloomberg, the U.K. unemployment rate was 3.9% and 3.8% at the end of 2022 and 2023, respectively, rose to 4.0% in August 2024 (the most recent month available), and is expected to be at or below 4.5% through the end of 2026.

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The ten-year U.S. Treasury yield increased by approximately 20 basis points quarter on quarter and by 56 basis points year-on-year to 4.4% as of June 30, 2024. On September 21, 2022 and November 2, 2022, the FOMC announced two separate increases to the upper bound of its target range for the federal funds rate of 75 basis points each, in order to curb inflation. The FOMC increased the upper bound by another 50 basis points in December of 2022, and then by 25 basis points each in February 2023, March 2023, May 2023, and July 2023. The FOMC has kept the rate unchanged since the July 2023 increase.

Current wording

The ten-year U.S. Treasury yield decreased by approximately 62 basis points quarter on quarter and by 79 basis points year-on-year to 3.8% as of September 30, 2024, but increased by 60 basis points to 4.4% as of November 1, 2024. The recent rise was due largely to uncertainty with respect to the pace at which inflation will subside and at which the FOMC will lower short term rates. For context, on September 21, 2022 and November 2, 2022, the FOMC announced two separate increases to the upper bound of its target range for the federal funds rate of 75 basis points each, in order to curb inflation. The FOMC increased the upper bound by another 50 basis points in December of 2022, and then by 25 basis points each in February 2023, March 2023, May 2023, and July 2023. The FOMC kept the rate unchanged at 5.5% between July 2023 and September 2024.

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In addition, the FOMC stated that it plans to continue reducing the $7.2 trillion portfolio of securities it holds (as of July 17, 2024), including long-term agency mortgage-backed securities and U.S. Treasuries. These securities were purchased as part of the Federal Reserve’s quantitative easing program designed to hold down long-term interest rates, with the total amount of securities having increased from less than $900 billion in the second quarter of 2008 to a peak of approximately $8.9 trillion in the first quarter of 2022. The FOMC previously indicated that a monthly maximum of $60 billion in U.S. Treasury purchases and $35 billion in mortgage-backed securities purchases (or a total of up to $95 billion) would be allowed to roll off, phased in over three months starting June 1, 2022. As quantitative easing is reversed in this manner through so-called quantitative tightening, long-term rates should rise, all else equal. In its annual report issued April 17, 2024, the New York Federal Reserve Bank predicted that the central bank’s holdings will fall to $6.0 trillion by the middle of 2025. It then expects holdings to again grow to in-line with the growth of the economy as reserves reach 8.0% of nominal U.S. GDP. After its May 1, 2024 meeting, the FOMC said that it will reduce the monthly redemption cap on Treasury securities from $60 billion to $25 billion. It will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion per month and will reinvest any principal payments in excess of this cap into Treasury securities.

Current wording

In addition, the FOMC stated that it plans to continue reducing the $7.0 trillion portfolio of securities it holds (as of October 30, 2024), including long-term agency mortgage-backed securities and U.S. Treasuries. These securities were purchased as part of the Federal Reserve’s quantitative easing program designed to hold down long-term interest rates, with the total amount of securities having increased from less than $900 billion in the second quarter of 2008 to a peak of approximately $8.9 trillion in the first quarter of 2022. The FOMC previously indicated that a monthly maximum of $60 billion in U.S. Treasury purchases and $35 billion in mortgage-backed securities purchases (or a total of up to $95 billion) would be allowed to roll off, phased in over three months starting June 1, 2022. As quantitative easing is reversed in this manner through so-called quantitative tightening, long-term rates should rise, all else equal. In its annual report issued April 17, 2024, the New York Federal Reserve Bank predicted that the central bank’s holdings will fall to $6.0 trillion by the middle of 2025. It then expects holdings to again grow to in-line with the growth of the economy as reserves reach 8.0% of nominal U.S. GDP. After its May 1, 2024 meeting, the FOMC said that it will reduce the monthly redemption cap on Treasury securities from $60 billion to $25 billion. It will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion per month and will reinvest any principal payments in excess of this cap into Treasury securities.

Previous wording

Similar to what has happened in the U.S., the MPC has both raised short term U.K. rates to combat post-pandemic inflation and begun quantitative tightening. With respect to short term rates, the MPC raised the Official Bank Rate several times recently, or from 0.1% in November 2021 to 5.25% in August 2023. On August 1, 2024, the MPC delivered its first interest rate cut in more than four years, lowering the Official Bank Rate to 5.0%. Policymakers ultimately voted 5-4 in favor of the reduction, with Governor Andrew Bailey saying that the committee would move ahead cautiously.

Current wording

Similar to what has happened in the U.S., the MPC has both raised short term U.K. rates to combat post-pandemic inflation and begun quantitative tightening. With respect to short term rates, the MPC raised the Official Bank Rate several times recently, or from 0.1% in November 2021 to 5.25% in August 2023. On August 1, 2024, the MPC delivered its first interest rate cut in more than four years, lowering the Official Bank Rate to 5.0%. On November 7, 2024, the MPC again lowered its target rate to 4.75%. However, it updated its forecasts after taking government budget measures into account, saying that it expected inflation would now peak at 2.75% by the middle of next year and then remain above the 2% target in 2026, until falling back in 2027. This is a year longer than it had expected in its previous forecasts, published in August.

Previous wording

With respect to quantitative tightening, the MPC stopped buying bonds at the end of 2021, stopped reinvesting the proceeds from maturing bonds in February 2022, and began actively selling bonds in November of 2022. As a result, the amount of bonds the Bank of England holds has started to fall. From the end of 2021 through July 17, 2024, their notional value has declined from approximately £895 billion to £693 billion.

Current wording

With respect to quantitative tightening, the MPC stopped buying bonds at the end of 2021, stopped reinvesting the proceeds from maturing bonds in February 2022, and began actively selling bonds in November of 2022. As a result, the amount of bonds the Bank of England holds has started to fall. From the end of 2021 through October 30, 2024, their notional value has declined from approximately £895 billion to £655 billion.

Previous wording

U.S. inflation measures have gradually declined since 2022. The consumer-price index for June 2024 rose by 3.0% year-over-year, which was lower than the 3.5% year-over-year rate for the three months ended March 31, 2024, in-line with the rate one year earlier, and a significant improvement versus the recent peak of 9.1% observed in June of 2022. On a month-over-month basis, Consumer Price Index was flat in May and slightly negative in June of 2024. Other U.S. inflation measures, such as Core CPI and the Core Personal Consumption Expenditure Price Index, which exclude more volatile food and energy prices, have also come down meaningfully since their 2022 peak. As a result, economists generally expect long-term U.S. interest rates to stabilize or decline slightly over the next few quarters, and to remain below the long-term historical averages for the foreseeable future. For example, the July 19, 2024 Bloomberg consensus was for the ten-year U.S. Treasury yield to be approximately 4.2%, 4.2%, 4.1%, and 4.0%, respectively, by the ends of the third quarter of 2024 through the second quarter of 2025. The same survey indicated that the yield should be 3.9% and 3.8%, respectively, as of year-ends 2025 and 2026. In comparison, this 10-year yield was approximately 4.2% as of the end of the fourth quarter of 2023 and reached a five year closing high of 5.0% on October 19, 2023, also according to Bloomberg. For context, ten-year U.S. Treasury yields still remain below their 50-year average (through July 17, 2024) of 5.9%.

Current wording

U.S. inflation measures have gradually declined since 2022. The consumer-price index for 2024 rose by 2.4% year-over-year in September 2024, which was lower than the 3.0% year-over-year rate for June 2024 and 3.7% rate for September 2023, and a significant improvement versus the recent peak of 9.1% observed in June of 2022. Other U.S. inflation measures, such as Core CPI and the Core Personal Consumption Expenditure Price Index, which exclude more volatile food and energy prices, have also come down meaningfully since their 2022 peak. As a result, economists generally expect long-term U.S. interest rates to stabilize or decline slightly, and to remain below the long-term historical averages for the foreseeable future. For example, the most recent Bloomberg consensus was for the ten-year U.S. Treasury yield to be approximately 3.9%, 3.7% and 3.7%, respectively, as of year-ends 2024, 2025, and 2026. In comparison, this 10-year yield was approximately 4.4% as of November 1, 2024, and reached a five year closing high of 5.0% on October 19, 2023, also according to Bloomberg. For context, ten-year U.S. Treasury yields still remain below their 50-year average (through November 1, 2024) of 5.9%.

Previous wording

Inflation in the U.K. has also gradually fallen, albeit from much higher recent levels. According to Bloomberg, the retail price index was 2.9% for June 2024 versus 4.3% and 10.7% three months and a year earlier, respectively. This inflation measure reached a post-pandemic high of 14.2% for October of 2023. According to the OECD, the U.K. has had a higher inflation rate compared with the G-7 average since 2016, and this trend is expected to continue in 2024 and 2025. Conversely, the U.K. had lower than average GDP growth among G-7 nations in 2023 and the first half of 2024, according to Bloomberg. As a result, the Bank of England has had a more challenging time than certain other central banks with respect to balancing inflation and growth rates. U.K. benchmark long-term rates have therefore been somewhat below those of the U.S. According to Bloomberg, the yield on 10-year U.K. government bonds was approximately 4.2% at the end of June 2024, compared with 3.9% and 4.4%, respectively, three months and a year earlier. The July 15, 2024 Bloomberg consensus was for this 10-year yield to be approximately 3.9%, 3.8%, 3.8%, and 3.7%, respectively, by the ends of the third quarter of 2024 through the second quarter of 2025. The same survey indicated that the yield should be 3.5% as of year-ends 2025 and 2026. For context, ten-year Gilts have averaged approximately 6.9% over the 50 years ended June 30, 2024.

Current wording

Inflation in the U.K. has also gradually fallen, albeit from much higher recent levels compared with the U.S. According to Bloomberg, the retail price index was 2.7% for September 2024 versus 2.9% and 8.9% three months and a year earlier, respectively. This inflation measure reached a post-pandemic high of 14.2% for October of 2023. According to the OECD, the U.K. has had a higher inflation rate compared with the G-7 average since 2016, and this trend is expected to continue through 2025. Conversely, the U.K. had lower than average GDP growth among G-7 nations in 2023 and the first half of 2024, according to Bloomberg. As a result, the Bank of England has had a more challenging time than certain other central banks with respect to balancing inflation and growth rates. U.K. benchmark long-term rates have therefore been somewhat below those of the U.S. According to Bloomberg, the yield on 10-year U.K. government bonds was approximately 4.4% as of November 1, 2024, compared with 4.0% and 4.4%, respectively, as of the end of the third quarters of 2024 and 2023. The most recent Bloomberg consensus was for this 10-year yield to be approximately 3.9%, 3.7%, and 3.7%, respectively as of year-ends of 2024, 2025 and 2026. For context, the monthly closing yield for ten-year Gilts has averaged approximately 6.8% over the 50 years ended September 30, 2024.

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While short-term yields are expected to be considerably above where they were compared with low levels seen for most of the period from the end of 2008 through early 2022, they are expected to stabilize and gradually fall from more recent levels. For context, the upper bound of the Fed Funds Target rate averaged 0.64% from December 31, 2008 through February 28, 2022, and was 5.50% as of July, 17, 2024. This rate averaged approximately 4.9% and 3.1% over the 50 years and 25 years ended December 31, 2022, respectively, according to Bloomberg. The most recent Bloomberg consensus was for this target rate to be approximately 5.3%, 5.0%, 4.7%, and 4.0%, respectively, by the ends of the third quarter of 2024 through the second quarter of 2025. The same survey indicated that the yield should be 3.9% and 3.4%, respectively, as of year-ends 2025 and 2026. As a result of the aforementioned statements by Chairman Powell and recent economic data, the CME’s Fed Funds futures market indicated that, as of August 2, 2024, traders expect more than four rate cuts by January 2025.

Current wording

While short-term yields are expected to be higher compared with most of the period from the end of 2008 through early 2022, they are expected to stabilize and gradually fall from more recent levels. For context, the upper bound of the Fed Funds Target rate averaged 0.64% from December 31, 2008 through February 28, 2022, and averaged approximately 4.9% and

Previous wording

The July 2024 Bloomberg consensus was for the Bank of England’s short-term target rate to be approximately 5.0%, 4.7%, 4.3%, and 4.0%, respectively, by the ends of the third quarter of 2024 through the second quarter of 2025. The same survey indicated that the yield should be 3.5% as of year-end 2025. As of August 1, 2024, the U.K. futures market implies that short term rates (as measured by overnight index swaps) will gradually fall to 4.2% by the March 20, 2025 meeting. In comparison, the Official Bank Rate was 5.00% as of August 1, 2024 and averaged approximately 6.3% over the 50 years ended this same date, according to Bloomberg.

Current wording

The most recent Bloomberg consensus was for the Bank of England’s short-term target rate to be 4.7%, 3.6%, and 3.2%, respectively, by the ends of 2024, 2025, and 2026. As of November 1, 2024, the U.K. futures market implies that short term rates (as measured by overnight index swaps) will fall in a manner largely consistent with this consensus. For context, the Official Bank Rate averaged approximately 6.2% over the 50 years ended September 30, 2024, according to Bloomberg.

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While the overall office market remains challenging, we continue to see increased demand in certain markets, led by ongoing return-to-work plans, as well as new demand driven by companies in technology including artificial intelligence as well as financial services. We also expect demand to be driven by the reset in values due to near-term debt maturities. According to the Freespace Index, the proportion of those attending work in person rose to 78% of 2019 levels in the Americas in June of 2024 compared with 69% a year earlier. The Freespace Index also reports that attendance increased to 73% of 2019 levels from 61% over the same timeframe across locations they track in Europe, the Middle East, and Africa, and to 83% from 67% in the Asia-Pacific region. Other measures with different methodologies also show in-person attendance increasing. For example, the Kastle Barometer, which measures daily occupancy in ten large U.S. cities versus pre-pandemic levels, increased to 52% as of June 14, 2024 versus 50% a year earlier. Placer.ai data comparing the last week of June 2023 to the end of June 2024 indicates that in-person attendance in the U.S. increased to 76% versus 69% over this period. Our management services, leasing, origination, and capital markets professionals continue to actively collaborate with clients to repurpose underutilized spaces and assets, including with respect to conversion of obsolete office or retail properties.

Current wording

We expect demand for office space to be driven by the reset in values due to near-term debt maturities. We also continue to see increased need for office space in certain markets, led by ongoing return-to-work plans, as well as new demand driven by companies in technology including artificial intelligence as well as financial services. According to the Freespace Index, the proportion of those attending work in person rose to 81% of 2019 levels in the Americas in September of 2024 compared with 67% a year earlier. The Freespace Index also reports that attendance increased to 73% of 2019 levels from 65% over the same timeframe across locations they track in Europe, the Middle East, and Africa, and to 77% from 69% in the Asia-Pacific region. Other measures with different methodologies also show in-person attendance increasing. For example, the Kastle Barometer, which measures daily occupancy in ten large U.S. cities versus pre-pandemic levels, increased to 52% as of October 11, 2024, versus 47% a year earlier. Placer.ai data comparing September 2024 versus a year earlier indicates that in-person attendance in the U.S. increased to 69% versus 64%. Our management services, leasing, origination, and capital markets professionals continue to actively collaborate with clients to repurpose underutilized spaces and assets, including with respect to conversion of obsolete office or retail properties.

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According to estimates from Green Street, prices for U.S. commercial real estate were up slightly month-on-month, declined by approximately 5% over the twelve months ended June 30, 2024, and were down 20% from their March 2022 peak. With respect to specific property types differing the most from the mean, mall prices were up 5% year-on-year, while strip retail and apartment prices were down by less than average. Self-storage, traditional industrial, and health care property prices decreased by more than average over the same period. Since notional volumes are based on both prices and transaction count, lower prices have contributed to industry-wide capital markets volumes declines. MSCI’s preliminary U.S. and European investment sales figures indicate that industry volumes across all property types declined by approximately 2% year-on-year in the second quarter of 2024. MSCI volumes are generally revised upwards at later dates. However, even before any revisions, these recent declines are an improvement from the double-digit percentage decreases reported over the prior seven quarters. In comparison, Newmark’s second quarter investment sales revenues and volumes were up by 18.2% and 17.5%, respectively. We have gained considerable market share over the past several years. Our U.S. investment sales volumes were approximately 8.8% of overall U.S. MSCI volumes over the twelve months ended June 30, 2024 versus 3.4% in 2015.

Current wording

According to estimates from Green Street, prices for U.S. commercial real estate were flat month-over-month in September 2024, declined by approximately 3% over the twelve months ended September 30, 2024, and were down 19% from their March 2022 peak. With respect to specific property types differing the most from the mean, mall prices were up 5% year-on-year, while strip retail and apartment prices increased by less. Self-storage, traditional industrial, and office prices decreased by more than average over the same period. Since notional volumes are based on both prices and transaction count, lower prices have contributed to tepid industry-wide capital markets volumes. MSCI’s preliminary investment sales figures indicate that industry volumes across all property types were roughly flat in U.S. year-over-year in the third quarter of 2024 and were down by approximately 2% in Europe. MSCI volumes are generally revised upwards at later dates. However, even before any revisions, these recent figures are an improvement from the double-digit percentage declines reported over most of the prior eight quarters. In comparison, Newmark’s third quarter 2024 investment sales revenues and volumes were up by 4.8% and down 9.7%, respectively. In the third quarter of 2023, Newmark served as the Co-Lead Advisor to Blackstone Real Estate Income Trust, Inc. on its sale of Simply Self Storage to Public Storage for $2.2 billion, and this amount was included in our volumes for that period. We have gained considerable market share over the past several years. For example, our U.S. investment sales volumes were approximately 8.7% of overall U.S. MSCI volumes over the twelve months ended September 30, 2024, versus 3.4% in 2015.

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We have also gained market share in our commercial mortgage origination businesses. Newmark Research estimates that overall U.S. commercial and multifamily originations may have declined by over 5% in the second quarter of 2024 versus a year earlier, with declines in lending by banks and the government entities (such as the GSEs) offsetting increases from commercial mortgage-backed securities and private credit lenders. In comparison, the Company improved its second quarter 2024 revenues from Commercial mortgage origination, net, by 9.9% year-on-year. This growth was led by 46.2% improvement in our mortgage brokerage and debt placement fees. This was partially offset by a decline in GSE/FHA origination fees, which were impacted by an approximately 27% year-on-year quarterly decline in overall U.S. GSE volumes, as well as the $947 million Freddie Mac origination Newmark completed in the second quarter of 2023. Certain GSE multifamily statistics for the industry are based on when loans are sold and/or securitized, and typically lag those reported by the MBA or by Newmark and its competitors by 30 to 45 days. Based on their analysis of MBA data and preliminary MSCI lending data, we believe that we have meaningfully outperformed the industry in total debt over the last several years. According to data or estimates from MSCI, the MBA, and/or Newmark Research, our total debt volumes were approximately 5.9% of U.S. commercial and multifamily mortgage originations over the twelve months ended June 30, 2024, compared with 1.5% in 2015.

Current wording

We have also gained market share in our commercial mortgage origination businesses. According to the MBA, overall U.S. commercial and multifamily originations increased by 59% in the third quarter of 2024 versus a year earlier. Industry-wide GSE placement activity declined by 5% over the same period, according to Fannie Mae and Freddie Mac. In comparison, we increased our mortgage brokerage and debt placement volumes by 76.8% and our GSE/FHA origination volumes by 27.5%. The Company also improved its third quarter 2024 revenues from Commercial mortgage origination, net, by 45.2% year-on-year. Certain GSE multifamily statistics for the industry are based on when loans are sold and/or securitized, and typically lag those reported by the MBA or by Newmark and its competitors by 30 to 45 days. Based on their analysis of MBA data and preliminary MSCI lending data, we believe that we have meaningfully outperformed the industry in total debt over the last several years. According to data or estimates from MSCI, the MBA, and/or Newmark Research, our total debt volumes were approximately 6.2% of U.S. commercial and multifamily mortgage originations over the twelve months ended September 30, 2024, compared with 1.5% in 2015.

Previous wording

Over 90% of Newmark’s 2023 investment sales volumes (which included the equity portion of the Signature transactions) were generated in the U.S., while approximately 93% were from the U.S. in first half of 2024. Most of Newmark’s international volume was from the Company’s U.K. operations. Essentially all of Newmark’s total debt volumes were generated in the U.S. in both periods. Given our continued investments, we believe we can continue gaining market share over time in the U.S. and globally, and we anticipate non-U.S. transactions to make up a greater percentage of our revenues and volumes over time.

Current wording

Over 90% of Newmark’s 2023 investment sales volumes (which included the equity portion of the Signature transactions) were generated in the U.S., while approximately 93% were from the U.S. in first nine months of 2024. Most of Newmark’s international volume was from the Company’s U.K. operations. Essentially all of Newmark’s total debt volumes were generated in the U.S. in both periods. Given our continued investments, we believe we can continue gaining market share over time in the U.S. and globally, and we anticipate non-U.S. transactions to make up a greater percentage of our revenues and volumes over time.

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We expect the record amounts of commercial and multifamily mortgage maturities and interest rate stabilization to lead to improved industry volumes in debt, followed by increased investment sales activity. We anticipate better office market leasing fundamentals as the recapitalization of properties at lower values leads to a more attractive market. We also continue to expect solid fundamentals for industrial and retail properties. We believe that these factors, along with our leading presence in capital markets, will drive growth across nearly all of Newmark’s service lines.

Current wording

We expect the record amounts of commercial and multifamily mortgage maturities and interest rate stabilization to lead to continued improvement in industry debt volumes, followed by increased investment sales activity. We anticipate better office market leasing fundamentals as more companies mandate returns to the workplace, less new inventory is constructed, and the recapitalization of properties at lower values leads to a more attractive market. We also continue to expect solid fundamentals for industrial and retail properties. We believe that these factors, along with our leading presence in capital markets, will drive growth across nearly all of Newmark’s service lines.

Previous wording

We also think that the current market conditions have created an opportunity for us to solidify what we believe is our position as the platform of choice for many of the real estate industry’s top professionals. During the first half of 2024, we hired one of the top multifamily GSE/FHA originators in the U.S., who will work closely with the preeminent U.S. affordable housing investment sales team that we added earlier in the year. We also hired some of the most prolific and experienced debt and structured finance professionals in the U.S. and U.K., as well as some of the most innovative and active U.S. leasing teams. Newmark also opened a flagship office in France, continental Europe’s second largest transaction market, where we attracted some of the most talented leasing and capital markets professionals. We believe that such hires further demonstrate the strength of our global brand, and that our substantial investments in data, analytics, and talent position Newmark to capitalize on ongoing macroeconomic trends. In addition, our revenue-generating headcount and overall headcount were both relatively flat year-on-year as of the end of the second quarter of 2024. Therefore, productivity gains drove the large majority of our total revenue growth, as well as our increased fees across Capital markets, Leasing, and Valuation and Advisory. As more of our recently hired revenue-generating professionals ramp up, we expect further productivity gains over time.

Current wording

We also think that the current market conditions have created an opportunity for us to solidify what we believe is our position as the platform of choice for many of the real estate industry’s top professionals. During the nine months of 2024, we hired one of the top multifamily GSE/FHA originators in the U.S., who will work closely with the preeminent U.S. affordable housing investment sales team that we added earlier in the year. We also hired some of the most prolific and experienced debt and structured finance professionals in the U.S. and U.K., as well as some of the most innovative and active U.S. leasing teams. Newmark also opened a flagship office in France, continental Europe’s second largest transaction market, where we attracted some of the most talented leasing and capital markets professionals. In October of this year, our European expansion continued with the launch of our capital markets and leasing businesses in Germany. We believe that these additions further demonstrate the strength of our global brand, and that our substantial investments in data, analytics, and talent position Newmark to capitalize on ongoing macroeconomic trends. Furthermore, our revenue-generating headcount was relatively flat year-on-year as of the end of the third quarter of 2024. Therefore, productivity gains drove the large majority of our total revenue growth, as well as our increased fees across capital markets, leasing, and V&A. As more of our recently hired revenue-generating professionals ramp up, we expect further productivity gains over time.

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Management services, servicing fees and other revenue increased by $22.1 million, or 9.2%, to $262.8 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase reflects growth from V&A and GCS.

Current wording

Management services, servicing fees and other revenue increased by $28.9 million, or 11.4%, to $282.6 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This increase reflects growth from our GCS, servicing, and property management businesses, as well as higher V&A fees.

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Leasing and other commissions revenues increased by $4.9 million, or 2.4%, to $208.6 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was led by 16% growth in office.

Current wording

Leasing and other commissions revenues increased by $11.3 million, or 5.6%, to $214.6 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was led by growth in retail and industrial volumes.

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Compensation and employee benefits expense increased by $30.6 million to $377.5 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase reflects improved commission-based revenue, an increase in pass through items, and expenses related to hiring revenue-generating professionals under long term contracts. These were partially offset by the impact of Newmark’s cost saving initiatives.

Current wording

Compensation and employee benefits expense increased by $21.0 million to $392.3 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase reflects improved commission-based revenue.

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Equity-based compensation and allocations of net income to limited partnership units and FPUs increased by $5.9 million, or 30.0%, to $25.5 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase is due to the timing of certain grants of exchangeability and the increase in share price of Newmark Class A common stock.

Current wording

Equity-based compensation and allocations of net income to limited partnership units and FPUs increased by $19.2 million, or 65.0%, to $48.7 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This increase is directly attributable to the approximately 87% year-on-year improvement in Newmark’s average stock price as compensation expense related to the grant of exchangeability for limited partnership units is related to the stock price of Newmark Class A common stock.

Previous wording

Operating, administrative and other expenses increased by $19.9 million, or 7.5%, to $285.7 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 largely due to higher pass through expenses directly tied to revenue.

Current wording

Operating, administrative and other expenses increased by $11.0 million, or 7.8%, to $151.9 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily related to costs associated with higher revenues from management services, servicing fees, and other.

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Other income (loss), net of $5.6 million in the three months ended June 30, 2024 primarily consisted of recoveries from forfeited restricted Newmark Class A common stock.

Current wording

Other income (loss), net of $0.3 million in the three months ended September 30, 2024 primarily consisted of recoveries from forfeited restricted Newmark Class A common stock.

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Other income (loss), net of $0.9 million in the six months ended June 30, 2023 was primarily due to net realized gains on equity method investments offset by a loss from the disposition of certain assets.

Current wording

Other income (loss), net of $3.2 million in the three months ended September 30, 2023 was primarily due to net realized gains on equity method investments offset by a loss from the disposition of certain assets.

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Interest expense, net decreased by $1.3 million, or 13.9%, to $8.3 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 due to higher interest income partially offset by higher interest expense on our recently completed 7.500% Senior Notes.

Current wording

Interest expense, net increased by $0.3 million, or 4.3%, to $7.9 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 due to higher interest expense on our corporate debt, partially offset by higher interest income, which primarily relates to interest income on employee loans.

Previous wording

The provision for income taxes increased by $2.3 million, or 34.6%, to $9.0 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase was primarily driven by higher pre-tax earnings. In general, our consolidated effective tax rate can vary from period to period depending on, among other factors, the geographic and business mix of our earnings.

Current wording

The provision for income taxes increased by $0.5 million, or 5.9%, to $8.8 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. In general, our consolidated effective tax rate can vary from period to period depending on, among other factors, the geographic and business mix of our earnings.

Previous wording

Net income attributable to noncontrolling interests increased by $4.3 million, to $9.1 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase was primarily driven by a higher pre-tax income.

Current wording

Net income attributable to noncontrolling interests increased by $2.3 million, or 55.6%, to $6.5 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This increase was primarily driven by a higher pre-tax income.

Previous wording

Management services, servicing fees and other revenue increased by $66.8 million, or 14.7%, to $519.7 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This increase reflects growth from V&A and GCS.

Current wording

Management services, servicing fees and other revenue increased by $95.6 million, or 13.5%, to $802.3 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This increase reflects growth from servicing fees and other, our GCS, and property management businesses, as well as higher V&A fees.

Previous wording

Leasing and other commission revenues decreased by $29.6 million, or 7.4%, to $367.4 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 which is largely due to Newmark’s outperformance in each quarter of 2023.

Current wording

Leasing and other commission revenues decreased by $18.2 million, or 3.0%, to $581.9 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 which is largely due to Newmark’s strong performance in 2023.

Previous wording

Capital markets increased by $36.0 million, or 14.0%, to $292.8 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase reflects improvements in investment sales fees and our significantly higher industrial and office volumes, as well as over 50% growth in mortgage brokerage fees.

Current wording

Capital markets increased by $65.5 million, or 15.7%, to $481.5 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase reflects a 28.0% increase in commercial mortgage origination, net and a 7.2% improvement in investment sales fees.