Newmark’s Third-Quarter Earnings Bolstered by Capital Markets Growth

Newmark (NMRK) boosted its third-quarter revenues driven largely by 18.5 percent growth in its capital markets business, the company announced in its quarterly earnings call on Election Day morning.

The brokerage’s company-wide revenue was $685.9 million, up 11.8 percent in the third quarter compared to the same period a year ago, which slightly beat analysts’ expectations. 

Its capital markets revenues rose by 18.5 percent from July through September, marking the fourth quarter in a row with a double-digit increase.

Barry Gosin, CEO of Newmark, said on the earnings call that every capital markets business line improved, led by a 45 percent jump in origination fees. Newmark netted a 76.8 percent increase in debt placements compared to 25 percent across the commercial real estate industry, according to Gosin.

Gosin added that volume in Fannie Mae-backed debt placements was up 58 percent at the end of the third quarter compared to the trailing 12-month period. It registered a 27.5 percent quarterly jump in agency-backed debt deals. 

“We’re winning market share in more complex, larger transactions,” Gosin said during the Tuesday morning call. “We have the athletes on the field in all the geographies and all the verticals.”

Investment sales fees rose by 4.8 percent in the third quarter from the same period a year ago, which Newmark attributed to higher volumes in the retail and office sectors. Gosin said he sees strong potential for investment sales deals in all property sectors with the exception of office, which has proven to be the only “complicated” asset class due to the large inventory of Class B assets in many markets. 

Leasing revenues rose 5.6 percent in the third quarter spurred in large part by momentum in the retail and industrial sectors. Michael Rispoli, chief financial officer at Newmark, said the firm is also seeing some positive signs with office leasing of late.

“We see office mandates coming back, we see a strong leasing pipeline, and we think that’s going to continue into 2025,” Rispoli said. “Last year, we outperformed the market in leasing and we’re up more than the average [brokerage], particularly in the fourth quarter.”

Andrew Coen can be reached at acoen@commercialobserver.com