After Strong Q2, Marcus & Millichap Sees ‘Challenging’ Months Ahead

Marcus & Millichap reported higher-than-expected results for the second quarter on both net income and revenue. The Calabasas commercial real estate brokerage reported net income of $22 million (56 cents a share) for the second quarter, compared to net income of $15.6 million (40 cents) for the same quarter a year ago. Revenue increased 10.4 percent to nearly $199 million. Analysts expected net income of 51 cents a share on revenue of $189 million, according to Thomson Financial. The company noted that financing fees increased 22.5 percent, driven by more refinancing transactions, and its large transaction division increased brokerage fees by 29 percent. “Real estate fundamentals remain healthy and the benefits of last year’s tax reform are trickling through the economy and the real estate market. At the same time, higher interest rates and buyer/seller price expectation gaps are keeping trading activity generally flat,” Chief Executive Hessam Nadji said in a statement. “The second half of this year will be a more challenging comparable for us as we finished the back half of 2017 strongly.” Shares of Marcus & Millichap (MMI) closed Tuesday up 27 cents, or less than a percent, to $39.87 on the New York Stock Exchange.