(Read more on the debt and equity markets.)
PITTSBURGH-HFF Inc. saw total revenue for the third quarter reach $68 million, up 23.8% compared with the same quarter of 2006. This is the locally based commercial real estate financial intermediary's third quarter as a public company.
The revenue jump was attributed to an increase in production volumes in each of the company's capital markets service platforms. They include debt placement, investment sales, structured finance, note sales and note sale advisory service, private equity, discretionary fund business and loan servicing. The company's operating income of $13.6 million for the quarter declined 3.9%, compared with the same time a year ago, and Ebitda was $16.8 million, a 12.1% increase.
This performance occurred in the face of a "very challenging domestic and global capital market situation," said John Pelusi, CEO, during a conference call in which he characterized current market conditions as "a healthy correction--long overdue, but painful. At no time, did the credit markets shut down," he added.
The company's third-quarter production volume totaled $11.9 billion on 300 transactions. This represents a 63.8% increase in volume compared with $7.3 billion in the prior-year on 309 transactions. A portion of the increase is due to a large investment sales portfolio that occurred in the most recent quarter. Excluding that transaction, production volume would have increased by 28.2%.
The production volume increase occurred "despite the continued domestic and global re-pricing of debt and equity risk, the credit and liquidity issues in the commercial real estate debt capital markets, and the lack of investor confidence, especially in the fixed income debt sector," Pelusi said. He acknowledged "confusion and uncertainty," but said, "quality deals can be done today."
The most active sectors are "core multifamily and industrial properties in great markets," Pelusi said. "Based on the deals we've done, we have not seen signs of a widening of cap rates [in those sectors]," he added.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
