Real estate services firm Newmark Group raised its earnings outlook for the year as it posted double-digit revenue and profit growth from what executives called a strengthened pipeline of deal activity.
The New York City-based firm reported a 20% increase in second-quarter revenue to $759.1 million from the year-earlier period, driven by gains in property sales and leasing commissions and fees from loan servicing, property management and investment management. Newmark posted a $28.8 million profit, up nearly 40% from the year-earlier period, fueled by double-digit increases across all of its major business lines.
Newmark joined CBRE, the world's biggest real estate services firm, in posting strong second-quarter revenue growth and expecting higher profit in 2025. Newmark expects a per-share earnings range of $1.47 to $1.57, up as much as 28% from its projection at the start of the year, and revenue between $3.05 billion and $3.25 billion for the full year, an increase of about 15%.
Chief Financial Officer Michael Rispoli said transaction activity was strong throughout the quarter, despite what some industry analysts described as a drop in deals during May and June as businesses awaited the outcome of federal trade and tax policies.
“Our pipelines have been pretty strong throughout the year,” Rispoli said Wednesday during a conference call to discuss the results. “We didn't see any significant slowdowns. If anything, our pipelines continue to grow and get stronger.”
Revenue from property sales, financing and other capital markets segments rose almost 38% to $223.5 million. The jump reflected a large increase in Newmark's debt placement and loan origination volume from the prior period.
In the brokerage's biggest financing deal of the quarter, Newmark arranged a $7.1 billion construction loan for a joint venture developing the Stargate artificial intelligence data center campus in west Texas.
Newmark's strong debt financing activity has continued into the current quarter. The company announced separately Wednesday that it arranged a $435 million refinancing of Starbucks Center, the coffee giant's corporate headquarters in Seattle's SoDo District.
Deutsche Bank provided the loan to Nitze-Stagen & Co. and Daniels Real Estate, the owners of the campus at 2401 Utah Ave. South occupied by Starbucks since 1993. Starbucks recently signed a 20-year lease extension for the headquarters.
Rispoli said Newmark's total debt volume was up 135% in the quarter, compared with 38% for the broader U.S. mortgage origination industry.
Investment sales volumes were up 26% in the quarter, compared to an average 11% gain in the industry, led by growth in the Newmark's data center, office and multifamily sales, Rispoli added.