Good day. Welcome to the Newmark first quarter 2023 earnings call. Today's conference is being recorded. If you'd like to ask a question today, please press star one. At this time, I'd like to turn the conference over to Jason McGruder, Head of Investor Relations. Please go ahead, sir. Thank you for your patience as we dealt with some technical difficulties on the vendor end. Also, thank you, operator, and good morning. Newmark issued its first quarter 2023 financial results press release and a presentation summarizing these results this morning. Unless otherwise stated, the results provided on today's call compare only the three months ending March 31st, 2023 to the year earlier period. Unless otherwise stated, we will be referring to our results only on a non-GAAP basis, which terms include adjusted earnings, adjusted EBITDA. Please refer to the section in today's press release for complete and more updated definitions of any non-GAAP terms, reconciliations of these terms to the corresponding GAAP results, and how, when and why management uses them. You can find more information with respect to our GAAP and non-GAAP results on today's website in today's press release, the supplemental tables, and the quarterly results presentation. Unless otherwise stated, any figures discussed today with respect to cash flow from operations refer to cash, net cash provided by operating activity, excluding loan origination and sale, as well as the impact of the 2021 equity event. Cash from the business is the same cash flow metric, excluding employee loans for producers. The outlook on today's call assumes no additional share repurchases, material acquisitions or meaningful changes in the company's prospects. Our expectations are subject to change based on various economic, social, political, and other factors. While our long-term financial and operating targets assume no acquisitions, they are also subject to change for key chain reasons. None of our long-term targets or goals should be considered formal guidance. I also remind you that information on this call about our business that are not historical facts or forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, Section 21E of the Securities Exchange Act of 1934 as amended. Such statements involve risks and uncertainties. As is required by law, Newmark undertakes no obligation to update any forward-looking statements. A complete discussion of additional risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements can be seen in Newmark Securities Exchange Commission filings, including, but not limited to, the risk factors in our most recent Form 10-K, Form 10-Q, Form 8-K filings, which are incorporated by reference. I'm now happy to turn the call over to our host, Chief Executive Officer of Newmark, Barry Gosin. Good morning. Thank you for joining us. With me today are Newmark's Chief Financial Officer, Mike Rispoli, our Chief Strategy Officer, Jeff Day, and our Chief Revenue Officer, Lou Alvarado. Newmark's strategy is to assemble the industry's most talented professionals and arm them with superior data and analytics for our clients. Since the beginning of the year, we added industry-leading capital markets producers in New York, Dallas, Phoenix and San Diego focused on industrial multifamily office and life science. We continued our global expansion by acquiring U.K.-based full service real estate advisory firm, Gerald Eve, bringing to Newmark the top three U.K. industrial capital markets platform. We generate nearly $200 million in annual revenues in the U.K. and plan to expand further across Europe. Our exclusive FDIC mandate to sell Signature Bank's $60 billion loan portfolio exemplifies our strength in managing large and complex transactions. This portfolio represents the largest real estate loan sale in U.S. history and demonstrates the capacity and depth of Newmark. Loan advisory services are becoming increasingly significant for us. According to Trepp, almost $2.6 trillion of U.S. commercial and multifamily loans mature over the next five years, with 55% owned by banks. During the quarter, we acquired the remainder of Spring 11, increasing the size of our overall servicing portfolio from $71 billion to $169 billion. Our loan portfolio solutions practice, which provides risk assessment and stress testing services to banks, is seeing a significant increase in activity. These businesses, together with capital markets and GSE FHA origination, provide Newmark with tremendous insight into commercial and multifamily lending. This combination helps us to better advise our clients across property types and service lines. Newmark's long-term prospects remain strong because of the $400 billion of uninvested capital in closed-end funds, which will drive capital markets. The $2.6 trillion of commercial and multifamily mortgages maturing over the next five years, which will fuel our debt, loan service, loan sales and loan advisory businesses. The continuing consolidation of our industry and the ongoing trend of outsourcing of real estate services, which will drive business towards full service, well-capitalized companies like Newmark. Given our strong financial position and significant global growth prospects, we expect to remain the preferred destination for industry's top professionals. With interest rates stabilizing, capital markets activity should increase in the fourth quarter and continue growing through 2024. As a result of our strong client relationships and deep pool of talent, we are uniquely positioned to benefit as industry volumes rebound similar to our success in 2021. With that, I'm happy to turn the call over to Mike. Thank you, Barry. Good morning. During the first quarter, Newmark made significant investments for future growth. Once our new producers ramp up, we expect these investments to add approximately $300 million of annualized revenues. For full year 2023, we anticipate generating $300 million-$350 million of cash from the business and using a portion to pay down our revolver, which we used to fund these first quarter investments. Our first quarter results were down compared to our record performance in the first quarter of 2022, in line with our expectations. Total revenues were $520.8 million, down 23.2%, mainly due to lower industry-wide capital markets activity, with U.S. investment sales down 56% according to RCA, origination activity down by as much as 53% according to Newmark research. Leasing revenues declined 2.8% grew 31.1% versus the first quarter of 2021, with retail and industrial revenues rising year-on-year to above pre-pandemic levels. We achieved these results despite U.S. leasing volumes being down more than 10%. We produced double-digit percentage organic growth in fees from Global Corporate Services, as well as continued improvement for our high margin servicing business. Total revenues for management services, servicing fees, and other declined by 8.9% due to lower pass-through revenues and valuation fees. Total expenses of $461.9 million were 13% lower, largely due to the variable nature of our cost structure. We remain ahead of schedule with respect to our $50 million annualized fixed cost savings target and expect to realize at least $35 million during 2023. Turning to earnings. Adjusted EBITDA was $62.9 million versus $126.5 million. Our EPS was $0.16 compared with $0.36. These results reflect the impact of the dramatic rise in interest rates on our higher margin capital markets platform. Our fully diluted weighted average share count declined by 5.1% to 239.9 million. Moving to the balance sheet. We ended the quarter with $210.7 million of cash and cash equivalents and $773.4 million of total corporate debt. The changes from year-end 2022 were primarily related to cash generated by the business, offset by normal first quarter movements in working capital and $225 million of borrowings under our revolving credit facility, which were used to fund our first quarter investments. We remain in a strong financial position with net leverage of 1.3x. Moving to our outlook, we expect to be near the low end of our full-year guidance range, which was first issued on February 16, 2023. Our full-year outlook assumes that the decline in industry-wide transactions will begin to rebound in the 4th quarter. We expect our 2nd quarter results to be up sequentially but down year-on-year by similar percentages to the 1st quarter of 2023. For the balance of the year, we expect continued sequential improvement. With that, I would like to open the call for questions. Operator? Thank you. If you would like to ask a question, signal by pressing star one on your telephone keypad. If you are using a speakerphone, make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask your question. Our first question is on the phone from Chandni Luthra from Goldman Sachs. Please go ahead. Hi. Good morning. Thank you for taking my question. I'd like to start with the Signature Bank loan sale. Could you guys talk about the composition of the portfolio in terms of the asset class? You know, what's the geography? What is the age? Are there any restrictions you have to keep in mind as you sell them? Barry, give us a sense of the economics. You know, perhaps talk about commission rates. How do you think about timing of the sale? You know, when do you expect to complete the $60 billion, like, and what's the impact in 2023? You know, I apologize, we can't comment on the loan portfolio. Whatever is public is on the FDIC website, and we're not prepared to comment on anything beyond that. Okay. Fair enough. In that, however, in that you should note that we are doing other loan sales, and we are seeing way more activity in that space. Advisory and that, so it's, you know, it serves us very well. Got it. Let me pivot to a little bit more of a macro question then. How would you say the backdrop for capital markets has changed after the events of the banking industry almost two months ago? Are you seeing anything different in the market right now? Are there any green shoots in the business currently that you are seeing? Just give us a sense of the broader landscape, please. Thank you. What has been signaled is the, you know, an opportunity for more certainty into interest rates. The stabilizing of interest rates and a pause by the Fed in raising interest rates is a good thing. I mean, it's very hard to trade properties when you can't underwrite what the interest rates will be. We see that has shortened the period of time for the uncertainty that will lead to a faster rebound in terms of opportunities to finance. There are green shoots. There are other parts of the world that are financing. You know, the GSE, Freddie, Fannie, they're out. They're actually financing. Life Cos are in some cases underallocated, and there's new formation of CMBS debt that seems to be coming up. You know, we're seeing some things. Ultimately what the banking crisis has made is I think it's speeded up the capitulation in terms of the delta between, you know, buyer and seller on valuation. You know, once that's established, people start to trade. Got it. This one's gonna be quick for Mike. In your outlook, as you think about your adjusted EBITDA, is there any incremental M&A embedded, based on the recent deals that you just announced? Is there any impact of the Signature Bank loan portfolio in there? The outlook for the year includes our pipeline, everything we know that's in the pipeline and includes Gerald Eve for the remainder of the year. It does not include any incremental M&A beyond that. You know, as I said, the second quarter, while sequentially better than the first quarter, will be down in a similar percentages as the first quarter of last year. The results should get sequentially better as we go through the year. Thank you so much. Our next question will come from Jade Rahmani from Keefe, Bruyette & Woods. Please go ahead. Thank you very much. Hopefully you can hear this. Just wanted to ask on. Yeah. -portfolio. We can hear you. Great. Wanted to ask on the portfolio sale side, if you could talk to the magnitude of deal flow that you're seeing and maybe general comments around economics. I know that one of your prior competitors, HFF, broke out the commission rate on that business, and I believe they're quite a bit higher than on the investment sale side and debt placement side. Clearly, it's sporadic and I'm sure very large portfolios, you know, there would be caps in place on what the commissions would look like and probably some kind of incentive for execution. What's the volume you're seeing and the economic impact? We generally don't comment on the specifics of guidance. We have confidentiality agreements on the things that we do. These are sensitive topics. We're just not gonna comment on Jay. I apologize. That's actually a good answer. Really appreciate that. You mentioned the banking crisis speeding up capitulation on pricing. Now, historically, the banks have maintained a outsized share in commercial real estate. When you look at the ratios prior to the GFC, it's clear that the CMBS market has declined dramatically post the regulations that Dodd-Frank put in place on risk retention, as well as curtailment of liquidity. The banks, as well as the debt funds, comprise the difference in terms of market share change. When you look to banks today, they probably will shrink their share in commercial real estate. How do you see this unfold? Could it potentially extend the magnitude and length of the downdraft in transaction volumes, or are you seeing any green shoots that would lead you to believe in the fourth quarter there would be a pickup? Jay, this is Lou. We're definitely seeing more activity. You know, during this time, I think most of our clients have been really trying to find out where pricing will shake out, right? Where will things settle? I think now that we've gotten some guidance from the Fed on rates, and I think as we get stability, we definitely believe we're gonna see that activity as we get down in the year. It's very similar to what you saw happen in 21, right? Where once we got over the impact that, you know, the pandemic hit, the activity picked up. I think you're gonna see a very similar respond as we get later on into the year. Thank you. You included a slide. Thank you. Yeah. Did she. The GCS will, you know, in the back end of this year, accelerate and get, you know, capture some of it up to the closer to the caps. We think you'll see more activity. It will be a lender of choice. As I said, you know, the Life Cos in some respects are underallocated in the, you know, sweet spot of $50 million-$150 million. They're out there. We're starting to see some CMBS loans, which, you know, there's some activity and discussions. You'll see it come from the, you know, the private markets, and then ultimately the banks will step back in. Thank you. Just lastly, leasing was a bright spot, this quarter. Significantly stronger than what we had forecast. Your five to nine notes across the platform office comprises 36%. Can you give any color as to what drove the relative strength in leasing? Clearly, you know, better than some of the peers that have reported. Yeah. Jade, this is Lou. Well, I think that we have leased-. I think... Go ahead, Lou. Do you want me to go there? Yeah. You know, I think what we've seen is, you know, and what we've spoken about, there's been a continuing flight to quality and a flight to the Class A product. We happen to represent a fair amount of Class A product across the markets. We also had some pretty sizable tenant deals of people that did make a commitment to space and did move forward with a plan to return people to the office. I think over time, we still believe that there's gonna be an increase in moves to keep bringing people back to the office. It may not be five days a week. It could be three days a week. Whether it's three days or five days, you still need space. The space will be different, but that's what we're seeing. We were fortunate that we were in the right sector. Industrial was up, retail was up. It wasn't just all office. The office sector did very well as well because of the product mix that we have. Thanks very much. Once again, if you'd like to ask a question, please press star one. Alexander Goldfarb from Piper Sandler, please go ahead. Hey, good morning. This morning and understand all, appreciate all your efforts with this morning's technical difficulties. Barry, if we look at the loans that are coming due, you know, when we went back to the GFC, you know, we all remember, like, GCCFC 2007-GG10, right? Like, all these monster peak of the, of the credit boom, CMBS that everyone was worried about, and all that stuff basically worked its way out. I mean, blend and extend. I mean, apart from the Corus condos, there wasn't really any distress that was sold into the market. Looking at the current wave, it doesn't seem so much it's a credit issue. It's, one, it's right sizing of loans. Two, it's no one wants an office loan. My question is, do you really see that this $1.4 trillion this year and next or the $2.7 trillion that you guys talked about is really going to be actionable stuff? In your view, there may be a few actionable loans, but a lot of this is just gonna be blend and extend, and that's the way it's gonna be resolved between the servicers and the borrowers. Well, a blend and extend is actionable. We're the maturities drive opportunity in the, you know, recaps, raising equity, looking for new partners, refinancing. You know, that they have to be dealt with. It's there's really no choice. We're in at every piece of it in every way. That can provide and drive opportunities for us on the advisory side, on the equity raise side, on the loan replacement side, all of those. If it's blend and extend, that doesn't seem to generate the same amount of fees that if you go through, you know, an auction and a restructuring and sale to new owners. Like, that would be much more lucrative, I would think fee-wise versus just the lenders and borrowers just getting together and recutting the deal. Wouldn't you say that? I I mean, that blend and extend doesn't seem to see the same fee stream that, you know, an auction and wholesale, you know, restructuring and sale to, you know, new owners would be. Well, there's gonna be all of the above. If there's a blend and extend, there's gonna be short term with a, you know, recap and probably a sale. There's just, there's a lot of stuff that comes along with loan sales and resales and recaps and resets. You know, in a market of disruption, there are opportunities that rise up that we don't think of, and that's happening. It is a big market. There are term dates on maturities, and there's still an enormous amount of capital sitting on the sidelines. There's $400 billion of closed-end funds available. There's lots of dry powder around the world. We're seeing foreign investors that are becoming more interested in investing in the United States for a host of different reasons. They'll see an opportunity and they're jumping in. We've done some recent equity raises from first-time foreign investors in projects where the domestic buyers were out of the market, and no one anticipate us finding equity in other parts of the world that were not available even one month ago. That leads to my second question. You know, we all talk about negative leverage in certain sectors like industrial. It's easy to pencil because growth is there. Office, I would imagine, is much tougher. Barry, in order for this transaction market to reopen, and let's talk more about office, do we need to see positive leverage return, or can the office transaction market recover if it still has negative leverage on trades? I think you're going to have to see some positive leverage return, right? In order to really move the market. I think it also will depend on the quality of the asset, right? The Class A core product, well amenitized and all that will obviously trade at a much smaller premium. The Class B and C is where we're going to struggle, right? Those are the areas where I think that the demand out there will be created by the fact that I think some of the market will shrink as these obsolete products no longer are viewed as competitive in the marketplace. That's where I think you're going to see the shift. Okay. Thank you. Patrick O'Shaughnessy with Raymond James. Please go ahead. Hey, good morning. Can you speak to the expected revenue contribution this year from Gerald Eve? Absent the acquisition, would you have had to lower your full year revenue outlook? Morning. When we announced the acquisition, we said they did about 92 million GBP of revenue in the prior fiscal year. We'll get nine months of that. A lot of their revenue is recurring management services type business, more than a majority of it. You know, we think it's pretty steady revenue, and we'll see that on a pro rata basis in our results this year. As we said, as the market continues to improve, our results consequentially get better as we move through the year. We currently feel comfortable around the low end of our guidance range. Okay. Appreciate that. Michael, another question I think for you. You guys have your senior notes coming due this November. How are you thinking about refinancing that? Do you have any kind of preliminary expectations on what the refinancing rate might look like? It will be higher than what we currently pay. I'm pretty sure about that. Look, we have great, clean balance sheet, low leverage and, you know, great ratings. We think we'll be able to execute on a refinance. We'll certainly go to market well in advance of maturity, which is in November. We don't really see too much issue other than it'll be a little bit more. Okay. Then maybe one last one from me. Can you guys speak to your aspirations with that Spring 11 business, and why was now the right time to buy the remainder of it? The Spring 11 business, yeah. The Spring 11 business is a business that crosses a broad spectrum of support services for our clients, but particularly the servicing and asset management businesses and special servicing businesses we felt were going to increase in need. We saw an entry point that was important for us. Actually the velocity has pleasantly surprised us to date. We're expecting because of some of these bank failures, because of these large portfolio sales and some of the resets in the marketplace to grow this business rapidly. Great. Thank you. Yep. Our next question will come from Jade Rahmani from Keefe, Bruyette & Woods. Please go ahead. Thank you very much. Wanted to ask about, maybe for Jeff Day, multifamily credit. What are your expectations there? Do you think that there'll be, you know, a decent amount of loans going through, performance issues given the floating rate loans as well as interest rate caps expiring this year? Well, let's level set where we are today versus some of our previous downturns. I've had the privilege to build our credit books for the last 23 years, along with my team. We went through 9/11, we went through the GFC. Where we are today in multifamily is nothing compared to those prior periods in terms of distress. Top line revenues are still growing, although a little bit slower. Expenses are increasing a little more rapidly, particularly insurance. Overall, we see very little distress. We, as Barry said, expect the GSEs to, if not approach, certainly hit the caps this year. Our book is pristine. Our performance has always been significantly better than the marketplace and significantly better than any of our competitors. I don't expect that to even be an issue. In the office sector, I think, you know, a problem like they said, you know, the only lender in office right now is the current lender. So that opens the door clearly for modifications and extensions as the most likely route. Cushion downfall. There'll have to be preferred equity brought in and probably loans being carved into A notes, B notes. What do you expect, the office, cycle to look like in terms of how the debt and how, you know, the capitalization plays out? What's your team seeing in terms of the office transactions that they're involved with? Clearly they've been active. I mean, one of the things by hiring the best talent in every market, in every category from multi-office industrial, which is what we've been on a quest to do. We're the go-to firm for complex, complicated recaps, which includes, you know, the talking to the lenders, talking to the owners, raising equity, restructuring notes, recapitalizing mezz, doing all of that. We're seeing an enormous amount of activity with the owners and many of the owners who may have a solid book and are, you know, stressed in other parts of their business, are selling assets, capitulating a bit where they may have good assets that are saleable with a good WAL, you know, weighted average lease term, and they're raising capital on those other assets to support those that are sort of snorkeling. We're seeing activity come from a lot of different places in a lot of different ways that are really work well for what we've built. Thank you. I have no further questions, mister. I will turn the call back over to Barry Gosin for the closing remarks. Thank you for joining us today. I am still extremely excited about the company's future and look forward to updating you on our next quarterly call. Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.