Greetings, and welcome to Marcus & Millichap's third quarter 2023 earnings conference call. As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Jacques Cornet. Thank you. You may begin. Thank you, operator. Good morning, and welcome to Marcus & Millichap's third quarter 2023 earnings conference call. With us today are President and Chief Executive Officer, Hessam Nadji, and Chief Financial Officer, Steve DeGennaro. Before I turn the call over to management, please remember that our prepared remarks and the responses to questions may contain forward-looking statements. Words such as may, will, expect, believe, estimate, anticipate, goal, and variations of these words and similar expressions are intended to identify forward-looking statements. Actual results can differ materially from those implied by such forward-looking statements due to a variety of factors, including, but not limited to, general economic conditions and commercial real estate market conditions, the company's ability to retain and attract transactional professionals, the company's ability to retain its business philosophy and partnership culture amid competitive pressures, the company's ability to integrate new agents and sustain its growth, and other factors discussed in the company's public filings, including its annual report on Form 10-K, filed with the Securities and Exchange Commission on February 28, 2023. Although the company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can make no assurance that its expectations will be attained. The company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise. In addition, certain financial information presented on this call represents non-GAAP financial measures. The company's earnings release, which was issued this morning and is available on the company's website, represents a reconciliation to the appropriate GAAP measures and explains why the company believes such non-GAAP measures are useful to investors. This conference call is being webcast. The webcast link is available on the Investor Relations section of the company's website at www.marcusmillichap.com, along with the slide presentation you may reference during the prepared remarks. With that, it is my pleasure to turn the call over to CEO, Hessam Nadji. Thank you, Jacques. On behalf of the entire Marcus & Millichap team, good morning, and welcome to our third quarter 2023 earnings call. The market challenges we've been facing this year continued on in the third quarter. The 10-year Treasury yield briefly touched the psychologically key level of 5%, and the Federal Reserve sent a clear signal of higher for longer in its interest rate outlook, citing that inflation is proving to be more persistent than expected. Rate volatility, a restrictive lending environment, and the cumulative effect of the sharp increase in the cost of debt over the past 18 months weighed heavily on sales and financing volumes. Revenue for the quarter came in at $162 million, down 50% over last year, with an adjusted EBITDA loss of $6.6 million. Revenue production remains hampered by the widened bid-ask spread, constrained financing, and interest rate volatility, disrupting deal closings. Transaction timelines extended significantly beyond historical norms, and many deals fell out of contract multiple times, creating a drag on our team's productivity. The result was a 39% decline in the number of brokerage sales transactions and a 59% decline in volume during the quarter. Given the macro nature and scope of the capital markets disruption, all product types and price segments showed major declines. Our traditional advantage as a market leader in the Private Client segment remains intact. As Steve will cover in his remarks, the Private Client market has declined the least of all segments, as smaller deals are more driven by personal circumstances and easier to finance. As history has also shown time and again, the private investor will also likely lead in the recovery. On the other side of the spectrum, the severe drop-off in larger transactions is having an outsized impact on MMI's revenue trends, especially considering that this part of our business outpaced the market in the past few years. We firmly believe that our expanded coverage in larger transactions and penetration into the institutional client segment through our IPA division are critical to our long-term competitiveness. MMI is uniquely qualified to bridge the vast private capital world with institutional assets and create value for all client segments. Notwithstanding expense reductions and various cost containment strategies we've employed, the loss in the quarter is largely due to expenses related to investments made over the past several years, including the acquisition and retention of top producers and teams. It also reflects our strategy to remain on the offensive side despite revenue headwinds, by further growing the experienced cadre of our sales force, investing in key industry conferences, client outreach programs, and providing resources for analytical and market research support. Although transaction activity is down significantly market-wide, our clients' need for market information, asset evaluation, and opinions of value are at a high, given the degree of uncertainty in the marketplace. We view the costs associated with providing personalized client support as an investment in long-term relationships that will manifest in future business. We remain steadfast in our belief that these investments will help us lead in the recovery, which is a matter of when, not if, based on our experience through multiple cycles over the company's 52-year history. Speaking of recovery, we believe several underlying forces will eventually converge to drive higher transaction volumes. These include a still strong labor market, which is more likely to slow than fall off a cliff, and resistant consumers who may also come off of recent spending highs, but sustain a solid financial profile. These economic pillars support strong property fundamentals across all product types, with the exception of older office assets. Another encouraging factor is that we appear to be very close, if not at, the end of the most aggressive Fed tightening cycle in 40 years. This milestone, even without a Fed pivot to lowering interest rates anytime soon, should bring some stability and direction to the market and help price discovery. Perhaps more critical than any quantitative factor is time. With time, sellers are adjusting to more realistic price expectations, and record capital on the sideline is starting to reenter the market. The difficulty in obtaining financing and significantly lower loan-to-value is not keeping astute investors from acquiring desired assets if the price is right. Although wholesale distressed sales by lenders are unlikely to become a major wave, individual situations arising from maturing loans, operating issues, and/or personal drivers are creating investment opportunities and recapitalization across all property types. For example, even within multifamily, which generally has the strongest fundamentals in the business, speculative transactions made at the peak pricing levels on short-term financing are having issues with maturing loans that are now far more costly and difficult to replace. One of the most important advantages of the MMI platform is the market coverage and countless relationships that our sales force harnesses through our collaborative culture and internal communication. We're in constant motion and making connections that lead to unique problem-solving and opportunity creation for buyers, sellers, and lenders. Our financing division has matured and grown through the addition of numerous experienced originators, teams, and boutique financing acquisitions, who are now actively partnering with our sales teams to help investors find financing solutions. MMCC's access to and relationships with over 400 lenders that our originators have closed deals with in the past 12 months alone, are of great value in the current market, where we face financing scarcity and very tight scrutiny. All these advantages demonstrate MMI's leading position in investment brokerage, despite the market headwinds, with over 4,000 sales transactions closed year to date and 800 financings. This is a direct result of our client commitment and the hard work, persistence, and skill of our sales force and support personnel. To expand our market position, we have supplemented our core business with industry-leading research, auction services in recent years, and our loan sales division to foster new client relationships and help existing clients execute in this difficult market environment. In the same spirit, I'm excited to announce the strategic investment in a technology-driven platform for equity raising and private debt placement called EquityMultiple. Their platform specializes in helping sponsors access its vast network of investors to raise project-specific equity and debt, and provides asset management services to many of its sponsor clients. EquityMultiple's proprietary technology enables rapid execution, which is especially valuable in the current market environment. We see multiple opportunities for client synergies and mutual referrals facilitated by both companies, heavy emphasis on technological advancements. We also made a strategic investment in a venture-backed company called Archer, which specializes in services that will increase our property underwriting productivity and ability to generate sales and financing leads. These services include property-level performance metrics across the U.S. through consolidating multiple data sources with proprietary technology, as well as analytics we expect will make our client targeting more efficient. Looking forward, we expect the market disruption to take more time and the recovery to be pushed out, given all the factors that I've summarized. As I stated on prior calls, we are committed to our organic hiring system and continue to execute expanded candidate outreach initiatives, enhance training and development, and are increasing our recruiting resources to return to positive net hiring. This remains a top priority for the management team. In the meantime, we continue to build on our success in attracting experienced professionals, teams, and independent boutiques to the firm in a complementary fashion to our existing coverage. In closing, let me emphasize the strengths of our balance sheet, leading market position, and brand as they enable us to continually improve the MMI platform and pursue strategic acquisitions and investments. The passage of time appears to have surfaced interesting acquisition opportunities that we're evaluating, even as some of our previous explorations did not close, primarily due to a valuation expectation gap. Our expanded capital allocation strategy reflects these offensive strategies and return of significant capital to shareholders over the past 18 months. We look forward to continuing on the path of long-term value creation as we position MMI to lead in the recovery. With that, I will turn the call over to Steve for additional insights on our results. Steve? Thank you, Hessam. As mentioned, market conditions remain challenging due to the Fed's steep trajectory of rate increases implemented since last year and their continued higher for longer messaging. This has led to a significant decline in transactional activity due to a lack of price discovery between buyer and seller, increasingly restrictive credit markets, and rate uncertainty. With that as a backdrop, let's get into the results. Total revenue for the quarter was $162 million, compared to $324 million in the prior year. Year to date, total revenue was $480 million, versus $1 billion last year. Revenue from real estate brokerage commissions for the third quarter was $140 million and accounted for 86% of total revenue, compared to $293 million last year, a decrease of 52% year-over-year. For the quarter, total sales volume was $7.4 billion across 1,361 transactions, down 59% and 39% respectively. Year to date, revenue from real estate brokerage commissions was $415 million and accounted for 87% of total revenue, compared to $934 million last year, a decrease of 56% year-over-year. Year to date, sales volume was $22.1 billion across 4,062 transactions, down 60% and 43%, respectively. Average transaction size during the third quarter was approximately $5.5 million, as compared to $8 million a year ago, reflecting the sharp decline of larger transactions. Within brokerage, for the quarter, our core private client business contributed 65% of brokerage revenue, or $91 million, versus 57% last year. Year to date, the private client business contributed 67% of brokerage revenue, or $278 million, versus 57%, again last year. Middle market and larger transactions, which experienced outsized growth over the past couple of years, together accounted for 31% of brokerage revenue or $43 million during the quarter, compared to 41% last year. Year to date, middle market and larger transactions represented 29% of brokerage revenue, or $122 million, compared to 40% last year. For the quarter, private client, middle market and larger transactions declined 45%, 60% and 67%, respectively, and year to date, declined 48%, 64% and 70%, respectively. Revenue in our financing business, including MMCC, was $17 million in the third quarter, compared to $28 million last year. In the quarter, we closed 276 financing transactions totaling $1.9 billion in volume, compared to 518 transactions for $3.3 billion in volume in the prior year. Financing revenue year to date was $51 million, compared to $91 million last year. This represents 839 transactions totaling $5.3 billion in volume, compared to 1,735 transactions and $10.4 billion in volume last year. Other revenue, comprised primarily of consulting and advisory fees, along with referral fees, was $5 million in the third quarter, compared to $3 million last year. Year to date, other revenue was $13 million this year, flat compared to last year. Moving on to expenses. Total operating expenses for the third quarter were $177 million, 39% lower than last year. Year to date, total operating expenses were $522 million, 43% lower compared to the prior year. Lower expenses were largely a result of lower revenue. Cost of services was $105 million, or 64.6% of total revenue, a decrease of 254 basis points over the third quarter last year. Year to date, cost of services was $301 million, or 62.8% of total revenue, an improvement of 169 basis points compared to last year. SG&A during the third quarter was $69.2 million, a decrease of 5.2% over the prior year. Year to date, SG&A was $210.3 million, a decrease of 7.5% compared to last year. The decrease in SG&A was attributed to lower variable compensation tied to business performance impacted by market conditions, along with cost reduction actions implemented over the past nine months. This was offset in part by expenses related to talent acquisition and retention, as well as new business development and marketing support. As discussed previously, the combination of lower revenue and the fixed nature of certain expenses associated with the expansion of our sales force, technology, and infrastructure in recent years, continues to impact our profitability. During the third quarter, we reported a net loss of $9.2 million, or $0.24 per share. This compares with net income of $21.4 million, or $0.53 per share in the previous year. Year to date, net loss totaled $23.8 million, or $0.61 per share, compared to net income of $96.3 million, or $2.39 per share in the prior year. For the quarter, Adjusted EBITDA was -$6.6 million, compared to $36.6 million in the prior year. Year to date, Adjusted EBITDA was -$15.1 million, compared to $151.4 million in the prior year. The effective tax rate for the quarter was 18%, and our current expectation of the effective tax rate for the full year is approximately 17%. Turning to the balance sheet, we maintain a well-capitalized, debt-free position with cash, cash equivalents, and marketable securities totaling $411 million, up modestly from the prior quarter total of $407 million. During the quarter, there were no share repurchases or dividend payments. However, we have had activity on both fronts subsequent to quarter end. In the quarter, we declared a semiannual dividend of $0.25 per share, representing a total of $10.1 million, which was paid in the first week of October. Over the last 18 months, we have returned approximately $83 million to shareholders in the form of declared dividends. Additionally, since the end of the quarter through the end of October, we repurchased approximately 161,000 shares of common stock at an average price of $27.92 per share, for a total of $4.5 million. Year to date, this brings total shares repurchased to nearly 1.3 million at an average price of $30.89 per share, for a total of $39.4 million. Since initiating the program last August, we have repurchased more than 2.1 million shares for more than $68 million and have approximately $72 million remaining on the current repurchase authorization. We remain committed to our multipronged capital allocation strategy, while at the same time ensuring that we maintain an appropriate level of liquidity to manage through the current business cycle. We continue to invest in technology and the recruitment and retention of top talent, as well as via strategic acquisitions, thus positioning ourselves for the eventual recovery and leveraging the business for long-term growth. As Hessam mentioned, after the end of the quarter, we made minority investments in two separate innovative proptech companies. Looking forward, we expect current market trends to continue. Given these dynamics, the outlook for the fourth quarter is a continuation of transactional levels consistent with the third quarter, although this week's Federal pause may spur some additional activity. Cost of services as a percentage of revenue for the fourth quarter should follow the usual pattern of increasing sequentially. SG&A for the quarter should increase modestly over Q3 in absolute dollars and be well below Q4 of last year. As I mentioned, the full year tax rate is currently expected to be in the 17% range. We remain committed to fostering client trust, actively pursuing strategic growth opportunities, and driving operational excellence through best practices with our entire team. The investments we have made and continue to make will position us to capture growth as market conditions inevitably improve. With that, operator, we can now open up the call for Q&A. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star key. One moment please, while we poll for your questions. Our first questions come from the line of Blaine Heck with Wells Fargo. Please proceed with your questions. Great, thanks. Good morning, guys. Hessam, you all have a somewhat unique concentration in your business model, where the transaction brokerage and financing businesses drive the vast majority of your total revenue, relative to some of your competitors who have, you know, more diversification across revenue streams with other services like leasing and asset management. You know, clearly there are times in which, you know, your structure is advantageous and levered to more healthy transactional markets. But does a slow market like this give you any desire to potentially diversify that revenue stream and get into some of those arguably more stable services? I know you mentioned, you know, making some investments in proptech companies that might provide some of those services, but is there any desire to have some of those services in-house? Good morning, Blaine. Absolutely, and that desire has been there during the, stronger macro environment, trends, as well as. Current market condition that we're facing. So it's not really unique to a reaction to the challenging market that we face today. It's been part of the company's long-term strategy for some time, and most of our exploration in terms of M&A, outside of the brokerage world, has been focused on those types of services and those types of complementary services that bring value to our existing sales force and our existing clients. So part of the criteria we've used in exploring those has to do with synergies and additional service lines that would benefit our private clients, as well as middle-market and institutional clients. So we examine those opportunities as much about their diversification benefits, hopefully margin benefits, and so on, from an accretion perspective, but also from a service expansion and client capturing and repeat business perspective. So the long answer, the short answer to your question is, absolutely, it's been a focus, and we are as focused on it in this period as ever. Great, thanks. I don't know if I missed this, but can you give us any sense of kind of the size of those investments and potential returns you're expecting, on your investments in those platforms? Well, in terms of the investments themselves, they kind of give us an entry point into some of these really interesting platforms that we believe have a lot of growth ahead of them. And, but again, it comes back to the synergies and client benefits we can bring, as well as benefits for our own sales force, with a combination of three different areas. One is productivity gains, new business generation gains, and the repeat business opportunities to our clients who we know need some of these services and are not getting it currently. So the return on that investment is going to be measured by both how well the companies do, of course, and us as investors in those companies, but also the incremental additional business we're going to gain from having access and partnerships with these firms, which is very difficult to quantify. Yeah, Blaine, this is Steve. I'll add a little bit there, and want to point out that we're not all of a sudden getting into the venture investing business. Each of these relationships started on the commercial side and looking at the benefits that they can bring to our business, our clients, our agents, as Hessam has indicated. We liked what we saw on those fronts. There was an opportunity to invest in each of them. We did that. We did our diligence. We did that. I will point out, though, that neither of these investments are of a size or percentage ownership that would require their quarterly operating results to impact ours, which if you're, you know, on the, you know, from a technical standpoint, means the investment was less than 20%. Okay, great. That's helpful color. Switching gears, you know, clearly the transaction market remains deeply depressed, but, you know, of the transactions that are occurring, I guess, you know, what percentage or, or portion would you say are driven by some form of distress that's kind of forcing, you know, sellers to capitulate versus those that are occurring a little bit more naturally? As I mentioned, Blaine, in my prepared remarks, we're starting to see situations that are unique to the owner, unique to the lender, as opposed to large waves of distress being marketed or portfolios of distress, whether they're loans or assets being brought to market or even being really prepared to be brought to market. It's one-off situations that are starting to happen, and we anticipate to see a lot more of them as more loans come due over the next two years. And frankly, as some players continue to need recapitalization. We're seeing a significant increase in the need for recaps in order to stay active in certain assets that are having either refinancing issues or operating issues. As a percentage of our closings in the third quarter, it wouldn't have been significant, but I can clearly share with you that this bucket of transaction catalyst is on the rise, measurably. Got it. That's really helpful. Can you talk a little bit more about how the market dislocation and depressed transaction market is kind of affecting your recruiting efforts? And I guess how we should think about what broker count should look like as we move forward into 2024. Sure. The market condition around inexperienced professionals being hired, trained, and transitioned into productive producers for us is still very challenged for the same reasons we've talked about for a while now, since early post-pandemic. In that, the very tight labor market, which is starting to loosen to some extent based on today's jobs report, of course, as well as the disruption, the significant swings since the pandemic of a severe market shutdown and the downturn in 2020, a big comeback in 2021, 2022, and then an interest rate-induced dislocation, has made the usual process of bringing inexperienced people onto the business, training them, having them work with a mentor, and transition them into productive individuals, has really been disrupted. We're still, if you will, reacting and pivoting to the ripple effects of that three-year disruption in the normal cadence of our new agent and originator hiring. But the trends are moving in the right direction. The additional initiatives that we've implemented are paying off, whether it's our fellowship program, our internship program, expanded kind of channels for reaching out to sales professionals from other industries, and a lot of flooding the zone in helping the newer professionals that are within the firm already get more training, get more support, and make it to the other side. But I don't want to underestimate just how difficult it is as a new professional to make it in this market. What we do know is that those that started in 2008, 2009 with us, maybe even 2010, and really struggled for the first few years, are some of our top performers now. Because they really learned the business in a healthy, foundational way that has given them an advantage as a career. And we're really advertising that and using those best practices to do everything we can to help our newer professionals right now. Complementing that with experienced professional hiring, teams, boutique firms, has been very successful, and we continue to build on that. This year, we've brought a number of market-leading teams on board. We've designed that effort in a way to be complementary to our existing coverage and our existing teams, so we avoid as much overlap as possible, so that we're not cannibalizing current opportunities that are already being pursued. And that strategy is very much alive and kicking and a high priority for us. Okay, great. That's helpful. Last one from me. Can you just give us a little bit more color on any additional external growth opportunities you guys might be exploring? You know, how far along any of those discussions might be? And given that you didn't repurchase shares this quarter, although, you know, as Steve mentioned, you guys have been active since then. I guess, you know, just how should we think about your preferences between those two options for capital deployment? I'll take the first part of your question first. As I mentioned in my prepared remarks, we have been actively pursuing external growth through acquisitions for some time now, and had advanced discussions with some targets that didn't work out, predominantly because of a valuation and purchase terms gap that we still felt brought too much near-term risk and midterm risk to the company. Those that did not work out have been more than replaced by new activities and new discussions, pretty advanced discussions, with others that fall in the same category of external growth. And with time, we are seeing a little bit more realistic price expectations and terms expectations, not because the targets that we're talking to are distressed in any shape or form, but because this realism is setting in, just as much as it is for real estate owners, by the way. It's the same process and the same curve, if you will. And, so we're encouraged by that quite a bit, and, and we are doing everything we can to continue to build that pipeline. Our preference, of course, would be to deploy as much capital for external growth and, and long-term growth and, and expanding the platform as much as possible. Not just because of diversification, although that's very important, but also recognizing, Blaine, that within our core business, brokerage and in finance, there's plenty of room for growth. There's plenty of opportunity for additional boutiques, additional groups, where we don't have that coverage, to be added to the company. And the success stories that we've had with the numerous firms that have joined us over the past five years are the reason to do more of it, both for the sellers as well as us. So that's the preference, but I think the benefit of our current capital deployment strategy is the fact that we worked very hard for several years to position the company to have such a fortress balance sheet, to have multiple strategies deployed at the same time. We're returning capital to shareholders through our dividend policy and share buybacks. We're pursuing acquisition opportunities, and as importantly, we're investing in ourselves. We are doubling down on MMI in this period. That is for sure. So the fact that there was no buybacks in one particular quarter is not signaling any change to the overall strategy. That just happened to be the dynamics for that particular quarter. And we have optionality. So as we pursue these external growth opportunities, hopefully, as they scale and some exciting things come together, that's where we'd love to see the capital deployed first and foremost, as well as, as I said, doubling down on ourselves in technology investments, a talent acquisition that wouldn't be considered necessarily M&A. Yeah, and, Blaine, really the only thing for me to add, that was very comprehensive, is, pointing out that, between the dividend and the share repurchase programs, we returned over $150 million- To shareholders over the last 18 months. And it is that very balance sheet that we've built up over the years that's allowed us to do that, while also still being able to make investments both internally and externally. Okay, great. Just a follow-up here for Hessam. You know, you talked about a valuation gap on some of those deals that fell out. Can you give us any better sense of how far off you were from an agreeable price? Was this, you know, closer to 5% off or 25%? It's somewhere in between, Blaine. And, you know, really it was maybe about a turn, you know, with a multiple turn of what we felt may have been a fair market value versus what the sellers would have liked, and/or the combination of the guaranteed value in an earn-out, where some folks would like to take more chips off the table, and we would like to see the opposite because we're not really looking to be anybody's retirement plan. And we're targeting groups and entities that have a lot of runway and would benefit from a exciting growth path in the future that would be much, much more rewarding with Marcus & Millichap than without, or with any other platform. If we don't see those characteristics in a deal, we're not just looking to buy market coverage. We really want to find complementary services, complementary folks that are like-minded, that are similar in culture and are aggressive about future growth. I would say those are as important criteria for us as any financial metrics. Okay, great. Thanks for all the commentary. Thank you, Blaine. Thank you. We have reached the end of our question and answer session. I would now like to turn the floor back over to CEO, Hessam Nadji, for closing remarks. Thank you, operator, and thank you everybody for joining our third quarter call. We look forward to seeing you on the road and look forward to our next earnings call. Have a great day. Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.