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PITTSBURGH-In its first formal financial report since it began trading on the NYSE on Jan. 31, locally based HFF Inc. reported record loan volume, revenues and earnings for full-year 2006. It also hired 87 associates that year, including 10 transaction specialists and opened an office in San Francisco, taking its total to 18 offices nationwide.
The expansion will continue, according to John Pelusi, CEO. During a conference call he said, "we'll continue to fill in the pot. That's a key component of our strategy," and, "we're in very active discussions with a number of players--all high quality people." He identified the multifamily, hospitality and industrial platforms as areas targeted for expansion.
He also said a task force had been formed to explore "how we might go overseas if we have enough clients who want to go there." The determination would be "no different from domestic cities we want to be in. We go where our clients want us to go. We'll take a city by city approach."
Meanwhile, the company's loan production reached a record $36.4 billion in 2006 on 1,300 transactions and represented a 14.7%-increase over production in the previous year. Nancy Goodson, COO, said productivity was up in all areas led by $22 billion in debt placement, $10 billion in investment sales, and $3 billion in structured finance.
Debt placement was relatively flat, while investment sales and structured finance registered increases of 33% and 52%, respectively, for the year.
The biggest year-over-year gainers were a 341% increase in note sales and sales advisory services, which totaled $402 million for the year, and a 460% increase in HFF securities, which tallied $930 million in private equity investment volume.
Net income in 2006 for the company was $51.6 million, up from $48.1 million a year ago. Revenue was $229.7 million, up 11.6%, compared with $23.9 million in 2005.
"The real estate capital markets are healthy and liquid," Pelusi concluded. Following recent meetings with clients, he said, "every single client has more business to place this year."
Shares of HF common stock opened trading on Jan. 31 at $18 a share, above an earlier anticipated range of between $15 and $17 a share set by underwriter Goldman Sachs Group. Stock rose to a high of $21.35 a share on Feb. 2, but dropped to a low of $16.41 a share on March 5 and continued a decline to a new bottom of $15.16 a share on March 13 before climbing back to $16.11 a share by mid-afternoon on a day in which the Dow suffered a triple-digit loss.
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