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Newmark Completes $409 Million of Commercial Mortgages During 1Q2018

May 3, 2018

Sees Early 2Q2018 Production Volumes Consistent with Expectations and Market Conditions; Expects to Exceed $2 Billion in Annual Production in Year Pointing to the Beginning of a Cycle Shift

SAN FRANCISCO, CA – Newmark™, the largest independent commercial mortgage banking firm in the western U.S., completed $409 million of commercial mortgages during 1Q2018 across 54 unique transactions. Further, projected 2Q2018 production volumes of $1 billion by June 30, 2018 indicate production is consistent with Newmark’s expectations of placing more than $2 billion by year end.

“As we move further into 2018, the market has been business-as-usual and consistent with production expectations that mirror the past 5-6 years,” said Michael Heagerty, Principal and CFO with Newmark. “That being said, as interest rates tick up, the economy continues to perform in a positive direction and refinancing demands decrease in the near term from the dearth of placements in 2008 and 2009 expect that we are in a cycle transition in 2018. We are also focused with our industry peers on a legislative agenda in Washington that will have long-term impacts on commercial finance moving forward, and are working diligently with our trade associations to navigate the evolutions of legislation on this front.”

In terms of capital requirements for unique asset classes, the active property types financed by Newmark during 1Q2018, in order from highest descending, included multifamily, office, and retail assets; with the company’s Los Angeles, San Francisco and Seattle production offices showing the highest transaction volumes during the period.

Heagerty pointed to the following trends as worthy of consideration at the close of 2017:

1Q2018 Production – Commercial mortgage finance placements performed as expected in 1Q2018, with overall rates remaining at historic lows. Production was consistent with Newmark’s expectations for the year, with the company anticipating exceeding $2 billion of total production in 2018.

2018 Interest Rates – Treasury rates are increased in 2018, but spread compression is compensating to keep commercial mortgage finance rates at historic lows for the near term.

Legislative Agenda – Newmark’s executive leaders are working through industry peer organizations like the Mortgage Bankers Association, the Commercial Real Estate Finance Council and the California Mortgage Bankers Association to help shape the emerging critical industry issues surrounding Federal GSE, HVCRE, HMDA, Tax Reform and extension of the National Flood Insurance Program legislation later in 2018.

Capital Sources – Newmark placed an above average number of commercial mortgages with life insurer sources in 1Q2018, indicating this class of lender has a growing and healthy appetite for commercial real estate allocations.

 

About Newmark

Newmark, a privately held company based in San Francisco, is a full service mortgage banking firm with an extensive lineup of correspondent lenders utilizing Newmark’s production, closing and servicing capabilities. Established in 1991, Newmark is currently staffed by over 70 employees in regional offices throughout the western United States. The company’s national servicing platform valued in excess of $10 billion represents more than 1,300 loans located in 40 states. Newmark is rated as a Primary Servicer by Standard & Poor’s and is one of a select few non-banking/non-insurance chartered companies with this designation. For more information please visit www.newmarkrealtycapital.com.

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