Marcus & Millichap reports second-straight record quarter

Q3 results surpasses Q2 earnings, 2019 net income

National /
Nov.November 05, 2021 01:45 PM
Marcus & Millichap CEO Hessam Nadji 

Marcus & Millichap CEO Hessam Nadji

Marcus & Millichap reported back-to-back record quarters as part of its ongoing recovery.

The California-based commercial brokerage firm — which specializes in investment sales, financing, research and advisory services — reported its highest-ever quarterly revenue and earnings in the second quarter.

However, the company’s third quarter results surpassed the second quarter figures, achieving $332 million in revenue, up about 17 percent from the second quarter, president and CEO Hessam Nadji told analysts during a third-quarter earnings call Friday.

Net income in the recent quarter was net income of about $34 million, and adjusted EBITDA of $51 million, up 76 percent and 83 percent, respectively, compared to the same period in 2019.

Revenue from investment sales commissions — the vast majority of the firm’s total — was about $300 million, more than twice the amount recorded in the same period last year, and up 66 percent from the third quarter of 2019.

“Historically low interest rates, record liquidity, and to some extent, higher motivation to transact ahead of tax law changes have bolstered the transaction market,” Nadji said.

President Joe Biden’s proposal to change tax provisions for high-earners — including the elimination of 1031 exchanges and a capital gain tax rate hike — to fund its so-called soft infrastructure bill has motivated some real estate investors to trade this year.

But Nadji said the firm’s recent survey, which involved more than 3,000 investors, showed regulatory concerns were not the main driver for selling and buying. Investors instead opted to lock in low interest rates while they last. (He later pointed out the 1031 exchange elimination has been removed from the administration’s updated tax proposal, while noting that nothing is final until the bill becomes law.)

The company’s recent quarters mark a stark contrast to its pandemic-driven downturn last year, which prompted the 877-person company to reduce its workforce by 20 percent, or about 175 employees.





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