Strategic Growth & Financial Overview
Disclaimer and Other Useful Information (Continued)
Industry Volumes
Newmark's investment sales figures include investment sales and equity advisory transactions, while mortgage brokerage figures include the Company's non-originated debt placement transactions, all measured in notional
terms. Investment sales and mortgage brokerage may together be referred to as "capital markets". Fannie Mae and Freddie Mac together are also called the "GSES", while the Federal Housing Administration is also called the
"FHA." Newmark's mortgage brokerage and GSE/FHA originations together are "total debt". The Company may also disclose the notional volume for leasing transactions, and/or the estimated value of all properties appraised
by our Valuation & Advisory (V&A) business. This estimate is based on the average appraised value of a subset of Newmark valuations performed in the relevant period multiplied by the total number of properties appraised by
us in that same timeframe.
Any overall industry investment sales market share and volume data discussed herein are preliminary and from MSCI Real Capital Analytics ("RCA") and Newmark Research, while any GSE data is from Fannie Mae, Freddie
Mac, the MBA, and/or Newmark Research. Any other U.S. industry debt volumes are based on the MBA commercial/multifamily origination index, unless otherwise noted. RCA's preliminary second quarter 2022 U.S.
investment sales figures indicate that industry volumes were up by approximately 17% year-on-year, or by 19% excluding entity deals. According to the MBA, commercial and multifamily lending increased in the U.S. by 93%
year-over year in the second half of 2021, while RCA reports that U.S. investment sales notional volumes increased by 139% over the same timeframe. The Company calculates its notional origination volumes based on when
loans are rate locked, which is consistent with how certain revenues are recorded as part of "Commercial mortgage origination, net". The Company's mix of GSE/FHA originations, and therefore revenues, can vary depending
on the size of loans, as well by the categories of loans with respect to the FHA, Freddie Mac, and different Fannie Mae structures. The notional volumes reported by the GSEs are based on when loans are sold and/or
securitized, and typically lag those reported by Newmark or estimates from the Mortgage Bankers' Association ("MBA") by 30 to 45 days. Newmark calculates its GSE market share based on delivery for enhanced
comparability. On October 13, 2021, the Federal Housing Finance Agency ("FHFA") increased the 2022 multifamily loan purchase caps for both Fannie Mae and Freddie Mac to $78 billion each, compared with $70 billion each
in 2021. This was based on FHFA's projections of the overall growth of the multifamily originations market. Because GSE multifamily volumes increased by 8% industry-wide year-on-year in the first half of 2022, volumes would
need to increase by 14% year-on-year in the second half for the agencies to reach their full year caps. There can be no assurance that the GSEs will reach their caps in any given year.
Revenue Percentages
For revenues by geography: East U.S. includes Connecticut, Delaware, Florida, Georgia, Massachusetts, Maryland, Maine, North Carolina, New Hampshire, New Jersey, Pennsylvania, Rhode Island, South Carolina, Virginia,
Vermont, and West Virginia. Central U.S. includes Alabama, Arkansas, Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Missouri, Mississippi, North Dakota, Nebraska, Ohio, Oklahoma, South
Dakota, Vermont, Virginia, and West Virginia. West U.S. includes Alaska, Arizona, Colorado, Hawaii, Montana, New Mexico, Nevada, Oregon, Utah, Washington, and Wyoming.
For revenues by property type: Revenues from leasing, capital markets, and Valuation & Advisory are broken out by the property types listed. “Industrial" also includes warehouse and R&D. "Other Property Types" includes
land, hotel/lodging, municipal, and specialty/mixed use. "Multifamily" also includes all origination revenues and servicing fees. Revenues from property and facilities management are broken out by property type based on year-
end portfolio square footage and/or mix of management fees by property type.
Other Items
Recurring businesses refers to "Management services, servicing fees, and other." Unless otherwise stated, figures for trailing twelve months ("TTM") are for the twelve months ending June 30, 2022.
Throughout this document certain other reclassifications may have been made to previously reported amounts to conform to the current presentation and to show results on a consistent basis across periods. Unless otherwise
stated, any such changes would have had no impact on consolidated total revenues or earnings under GAAP or for Adjusted Earnings, all else being equal. Certain numbers in the tables or elsewhere throughout this document
may not sum due to rounding. Rounding may have also impacted the presentation of certain year-on-year percentage changes. Decreases in losses may be shown as positive percentage changes in the financial tables.
Changes from negative figures to positive figures may be calculated using absolute values, resulting in positive percentage changes in the tables. Throughout this document, certain percentage changes are described as
"NMF" or "not meaningful figure".
Newmark Group, Inc. (NASDAQ: NMRK) ("Newmark" or "the Company") generally operates as "Newmark", or derivations of this name. The discussion of financial results reflects only those businesses owned by the Company
and does not include the results for the independently-owned offices that use some variation of the Newmark name in their branding or marketing.
Newmark, Grubb & Ellis, ARA, Computerized Facility Integration, Excess Space Retail Services, Inc., Knotel, Deskeo, and Berkeley Point are trademarks/service marks, and/or registered trademarks/service marks and/or
service marks of Newmark Group, Inc. and/or its affiliates.
NEWMARK
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