Welcome to Douglas Elliman Inc.'s first quarter 2022 conference call. During this call, the terms Adjusted Net Income and Adjusted EBITDA will be used. These terms are non-GAAP financial measures and should be considered in addition to, but not as a substitute for, other measures of financial performance prepared in accordance with GAAP. Reconciliations to Adjusted Net Income and Adjusted EBITDA are contained in the company's earnings release, which has been posted to the investor relations section of the company's website, located at investors.elliman.com. Before the call begins, I would like to read a safe harbor statement. The statements made during this conference call that are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks are described in more detail in the company's Securities and Exchange Commission filings. I would now like to turn the call over to the Chairman, President, and Chief Executive Officer of Douglas Elliman Inc., Howard M. Lorber. Good afternoon, and thank you for joining us. Joining me today are Richard Lampen, our Chief Operating Officer, J. Bryant Kirkland III, our Chief Financial Officer, and Scott Durkin, President and CEO of Douglas Elliman Realty, our residential real estate brokerage business. On today's call, we will discuss the continued strength of the U.S. residential real estate market and how factors in the market contributed to our solid first quarter financial performance. We will then answer your questions before concluding today's call. During our last earnings call, we discussed why a brand name synonymous with luxury and a comprehensive suite of technology-enabled real estate solutions positions Douglas Elliman to capitalize on the highly attractive dynamics in the U.S. residential real estate market. During the first quarter, we demonstrated that this continued to be true. We saw an ongoing trend of strong demand for residential homes, combined with low inventory, which continues to result in significant price appreciation. One. We reported $52.8 billion in gross transaction value or closed sales over the last 12 months. To date, our business has not been materially impacted by higher mortgage rates, and we believe this is the result of our focus on our luxury markets, where a higher percentage of transactions occur in cash. We believe this momentum will continue for the residential real estate and Elliman in particular, because of our strong presence in leading luxury markets. Also contributing to this momentum are factors such as the growing importance of millennial buyers, the return of international buyers, and limited supply due to under-building of new homes between 2007 and 2020. It is important to note that our luxury brand results in higher average sales prices versus our peers across all our markets. For the 12 months ending March 31st, 2022, Elliman had an average price per transaction of $1.62 million per home, substantially higher than our leading competitors outside of New York City. Our average price per transaction is approximately $1.5 million, which is well above the national average. We believe this creates a runway for us to continue to grow our business, not only in our existing markets, but in complementary markets as well. In addition to organic growth through recruiting in our major markets, we have significant opportunities to increase our market share in adjacent markets where the Elliman name is well known and trusted. New York City remains our largest market, with $17.3 billion in gross transaction value in the last twelve months, ending March 31, 2022. We also continue to be pleased with the strong performance of our South Florida market, with $14.7 billion in gross transaction value in the same period. Average selling price remained at approximately $2 million per home across New York City and South Florida. We also maintained strong market share in New York City and South Florida. For the last twelve months, our market share in New York City and South Florida was 21% and 20%, respectively. We have also continued to expand our footprint across existing and new luxury markets. In Florida, we expanded to Vero Beach and Ponte Vedra Beach near Jacksonville in the first quarter. In Massachusetts, we opened a Nantucket office in April and recently brokered the highest price transaction ever in that market. We are opening two additional offices in Boston in the coming months. We also continue to aggressively grow our business in Texas. We are actively recruiting new agents in Houston, Dallas, and Austin. We believe Texas will be a major market for us in the future. Our residential brokerage is further differentiated and enhanced by our PropTech technology. In the first quarter of 2022, we continued rolling out refinements of our cloud-based myDouglas agent portal by incorporating new features, including personalized distribution of data-driven videos for marketing and social media, a service designed to maximize our agents' digital presence, and our Studio Pro agent concierge service. Concurrently, we continue to focus on reducing our expenses and rolled out two new packaged applications to automate our payment processing and streamlined escrow services. In addition to lowering expenses, these integrated applications will provide a more automated experience and superior service to our agents. Looking ahead, Elliman is focused on creating stockholder value through the expansion of our footprint, acceleration of our adoption of cutting-edge PropTech solutions, continued recruitment of best-in-class talent, acquisitions, acqui-hires, and operational efficiencies. Before we discuss the financial results for the quarter, I'd like to express my deep gratitude to the Elliman agents and employees who work hard every day for our company and our clients. Our agents are consistently ranked among the best in the business and continue to power our company's success. With that backdrop, let us move on to Douglas Elliman's financial results. For the three months ended March 31, 2022, Douglas Elliman reported $308.9 million in revenues, compared to $272.8 million in the 2021 period, primarily driven by increased commission and other brokerage income in our luxury markets. Net income attributed to Douglas Elliman was $6.5 million or $0.08 per diluted share for the three months ended March 31, 2022, compared to net income of $14 million or $0.18 per share in the prior year period. For the three months ended March 31, 2022, Adjusted EBITDA attributed to Douglas Elliman was $12.7 million, compared to $16.4 million in the first quarter of 2021. For comparability purposes, Douglas Elliman began operating as a standalone public company in the first quarter of 2022. Expenses incurred by our public company operations are reported in the corporate and other segment, and the operations of our brokerage business are reported in our real estate brokerage segment. Therefore, for comparison purposes, our real estate brokerage segment reported operating income of $14.5 million for the three months ended March 31, 2022, compared to $14.2 million for the three months ended March 31, 2021. Our real estate brokerage segment reported Adjusted EBITDA attributed to it of $17.7 million for the three months ended March 31, 2022, compared to $16.4 million for the three months ended March 31, 2021. For the three months ended March 31st, 2022, Adjusted Net Income was $6.5 million or $0.08 per share, compared to Adjusted Net Income of $13.9 million or $0.18 per share in the first quarter of 2021. Douglas Elliman also maintained a strong balance sheet with cash of $203.7 million at March 31st, 2022. We believe this liquidity places us in a position of strength in the market. In summary, Elliman had a strong first quarter, and we believe we have a strong platform for continued growth. In addition, during the first quarter, we were pleased to begin paying a $0.05 per share dividend to our stockholders. It is our expectation the dividend will serve as a key component of our capital allocation going forward. With that, we will be happy to answer questions. Operator? At this time, I would like to remind everyone, in order to ask a question, press star followed by the number one on your telephone keypad. Your first question comes from the line of Ritwik Roy from Jefferies. Your line is open. Yeah. Hi, Howard and team. Hi. When you guys discussed the resilience of sales, relative to higher rates, you guys mentioned cash buyers. Do you guys by any chance have a percentage on that number? Well, it varies from market to market, but the real fact is that in the higher-end deals, there's less talk of mortgage. That doesn't mean they're not ultimately getting financing on it after they purchase it. If they deal with a private bank, they could be getting, you know, financing which doesn't have a mortgage on it from the private bank. We don't really see interest rates having affected too much yet. In fact, what I've seen in the past over the years is that as rates start going up, that brings people into the market quicker because they don't wanna be priced out of the market. They start thinking back of what interest rates looked like a long time ago, and they're like, "Wow, they don't wanna get to that point." It sort of motivates some people to come into the market. Understood. That kind of ties into what I was gonna ask after that. You would basically say the higher end markets like New York City and Florida, those are, you know, relatively resilient against the interest rate backdrop? Well, you know, it could be resilient, but it depends how much. At some point, it wouldn't if we got back to these crazy rates that we had, you know, years ago. But we don't see that. Then also, they're taking into account inflation. Look, people need houses. We're still millions of houses short in this country and, according to all the data that we see, and, you know, people need and want housing. Therefore, they're gonna do everything possible to do it as quick as possible because the way it looks now with inflation and supply problems to build new houses and rising interest rates, there's no better time probably than right now. Got it. That was helpful. Thank you. If I may, just a little bit on modeling. How should we think about growth and fixed costs for this upcoming fiscal year, 2022 or this current year? Yeah. BK? Hey. Hey, Rick. How are you? I'm doing well. Thank you. Um. Good to hear from you. Very good. If we look at our costs, we put them into three buckets. We put them into activity-based, which are advertising and discretionary compensation or bonuses. We put them into non-activity based, and we put them into expansion. If you look at our cost in recent years on the general administrative line, our non-activity based have been reduced from $216 million to $194 million. That number has crept up as people have returned to the offices, but we will be taking initiatives to examine those costs as the year progresses. Got it. Just for clarity, though, that reduction in G&A, that's referring to the total entity or just the brokerage segment? Yeah. The G&A from 2019 over the last 12 months is roughly, it's gone from $252 million to $256. Most of that has been either through expansion of $13 million or activity-based costs, which are the advertising and discretionary bonuses of from $35 million to $49 million. Got it. Obviously, the activity-based costs are really contingent or they correlate to the business, and we've increased our business significantly since 2019. Okay. Understood. I guess, taking away from that, you know, with the return to office, you know, expect some sort of pickup potentially in G&A, but you guys are monitoring the situation or, I guess, that scenario. We're monitoring it very closely. Yeah. When you say the return to office, that was just part of it. Don't forget, you know, we had people on furlough and, you know, layoffs. All of a sudden when, you know, COVID slowed down and the markets really started picking up in our primary markets, we had to hire back people and we had to find people, and that wasn't that easy. I think that's on the negative side. The positive side is the fact that we really like most other companies that have lots of office space, we're not gonna need all the space we have. As leases start coming due, we're going to consolidate and save some substantial money on rent over the next few years. Got it. That's good to hear. One last item. Maybe I missed this in the reporting, but do you guys have a number of transactions in the quarter? No, I don't. Do you have that? Yeah, it's in the quarter. Just a minute. Oh. Rick, it's in the press release. The number? Rick, when we are giving expenses, we are providing the expenses at the real estate brokerage subsidiary. That does not include corporate costs. Okay. Understood. The public costs. Got it. Yeah, it doesn't include the G&A entity there. Yeah. Adjustment. Understood. Okay. Cool. I will take another look at the press release then for that deal count and appreciate your guys' answers. Okay. Thank you. Thank you. Again, if you would like to ask a question, press star followed by the number one on your telephone keypad. Your next question comes from John Massocca with Ladenburg Thalmann. Your line is open. Good afternoon. Hi. How's it going? Just curious where you feel you are in terms of your broker count. Are you looking to kind of recruit still maybe in some of your core markets? I know there's obviously an initiative to expand in some newer markets in kind of into adjacent geographies, but, you know, in markets like New York or South Florida, I mean, do you feel you're in a good place from a brokerage, a broker number, or do you think you need to add more agents? No. We're always looking to add. We have some attrition. We try to keep our numbers going up, though, as far as agent count, especially on the good agents. We just hired a great agent, started a couple of days ago. We made an announcement about it. This was an agent that was doing a couple of million dollars a year in commissions. And that's what we're looking for. And then when you look at our newer markets like Texas, I mean, I think we hired 60 people in Dallas in the last month or two. You know, we are very much on the recruiting bandwagon. Everyone in the company, every executive in the company, one of their jobs, including mine, is to recruit, and we spend a lot of time doing that. Okay. As we think about growth, how much of that is really recruitment-driven, and how much of that could potentially be M&A, particularly given the current kind of capital markets environment we're in today? Well, look, M&A sounds better, but there's also a cost to it. Recruiting probably takes a longer period of time and is a little bit tougher than just going and buying someone. On the other hand, you know, we look at the costs also. There's no simple solution. I mean, we want to recruit, okay? We wanna, you know, have acquisitions. Most of our acquisitions recently have been small companies which we call sort of walkover deals. You know, there's maybe we just took over a group of 10 that had a small company, I think it was in Naples or outside of Naples. You know, all of a sudden now we have a new office in Naples. We didn't pay anything, you know, upfront to that. They wanted our brand. I mean, that's what everyone wants. They wanted our brand. One of the reasons they want our brand is because our agents, if you ask our agents where they get a lot of their business from, they're gonna tell you from Douglas Elliman agents in other markets. That's how we built the company. Florida people, New York people have Florida. Florida people go to Aspen in the summer months. Californians have been going to Texas and to Florida. We have New York City people have been going to the Hamptons. We have so many markets. All our markets sort of connect to each other. That's really how we wanna keep growing the company. Just one kind of detailed question. You talked about the G&A. I mean, was there anything one-time-ish in 1 Q that we should watch out for? Or is that at maybe kind of a good run rate now that you're kind of, you know, public company and, you know, separate public company, and then also, given the amount of activity going on the brokerage side? Good afternoon, John. As far as general administrative at the public company side, we had $6.7 million of loss, about $1.7 of that related to stock comp. Of that $5 million, there was a part that was one-time. We believe the number for the year will be about $18 million. Okay. That's very helpful. John- That's it for me. Yes. John, one more item. Someone asked earlier about the number of transactions. In the first quarter, the number was seven,212, and over the last 12 months, it's 32,518. Okay. Thank you very much. Thank you. Your next question is from the line of Anthony Paolone with JP Morgan. Your line is open. Good afternoon. Could you discuss, management succession now that you're independently traded? Well, we think we have a good management team, but, you know, we've only been independently, this is going on three months into the fourth month, and we're opening markets and doing a lot of recruiting. We will have put together a management succession plan at some point, but we're not ready for that at this point. Okay. Thank you. for joining us on Douglas Elliman's first quarter 2022 earnings conference call. This will conclude our call. We hope you have a good evening, and you may now disconnect.