Newmark Group (NASDAQ:NMRK), Inc. has facilitated a $315 million refinancing deal for a national portfolio of self-storage facilities, representing a significant transaction within the alternative real estate sector. The loan was arranged by Newmark’s top executives for TPG Angelo Gordon, in partnership with Andover Properties, and was provided by a consortium of lenders including Wells Fargo (NYSE:WFC), Goldman Sachs (NYSE:GS), and 3650 REIT.
The refinanced portfolio comprises 43 properties with over 21,300 units, totaling 3.1 million rentable square feet and operating under the Storage King USA brand. These facilities are strategically dispersed across 24 markets in 11 states. Since their acquisition, the portfolio has seen a notable increase in net operating income (NOI), which has grown by more than 40%.
Jordan Roeschlaub, Co-President of Global Debt & Structured Finance at Newmark, commented on the robust interest in alternative real estate sectors like self-storage, citing their resilience and potential for steady cash flow and growth despite broader economic fluctuations.
This deal comes at a time when the self-storage sector is experiencing heightened investor interest. Newmark Research has noted a 27% rise in transaction activity from the first to the second quarter of 2024, with expectations for continued growth through the year’s end.
TPG Angelo Gordon is a diversified credit and real estate investment platform within TPG, a global alternative asset management firm with $229 billion of assets under management. Andover Properties, a private owner-operator of self-storage facilities, boasts a significant footprint with over 13.5 million rentable square feet across 162 locations.
Newmark, a commercial real estate powerhouse with revenues of approximately $2.5 billion for the year ended December 31, 2023, offers a wide range of services tailored to various clients in the property market. The firm operates approximately 170 offices worldwide, staffed by 7,800 professionals.
This news is based on a press release statement and provides a factual account of the refinancing agreement without speculating on its potential impact or significance within the broader industry.
In other recent news, Newmark Group delivered robust growth in its second-quarter financial results for 2024;
- With capital markets revenues growing by 15%
- Investment sales by 18%, and
- Mortgage brokerage fees by 46%
- Office leasing revenues also saw a 16% increase, despite a 4.3% rise in total expenses
- The company projects a 50% EBITDA growth by 2026
In addition, Newmark facilitated a strategic joint venture between Catalyst Healthcare Real Estate and Heitman, backed by a $300 million investment. This partnership aims to develop healthcare properties across the United States, funding seven new developments totaling nearly 500,000 square feet. Piper Sandler revised its price target on Newmark’s shares, raising it to $17.00 from $13.00, maintaining an Overweight rating.
Lastly, Newmark extended the contract of CEO Barry Gosin through December 31, 2026, modifying his compensation package, including a one-time cash payment of $5 million and additional non-distribution earning partnership units valued at $20 million for the years 2025 and 2026. These are the latest developments for Newmark Group.
InvestingPro Insights
Newmark Group’s recent $315 million refinancing deal for a national self-storage portfolio underscores the company’s strong position in the commercial real estate sector. This aligns with several key metrics and insights from InvestingPro.
According to InvestingPro data, Newmark Group (NMRK) has shown impressive financial performance, with a market capitalization of $3.6 billion and revenue of $2.54 billion over the last twelve months as of Q2 2024. The company’s revenue growth of 6.94% during this period reflects its ability to capitalize on market opportunities, such as the growing interest in alternative real estate sectors like self-storage.
InvestingPro Tips highlight that Newmark is a “prominent player in the Real Estate Management & Development industry,” which is evident from its involvement in high-value transactions like the one described in the article. Additionally, the company has been “profitable over the last twelve months,” with analysts predicting continued profitability this year.
The stock has shown strong performance, with InvestingPro reporting a “high return over the last year” and a “strong return over the last three months.” This positive momentum is reflected in the stock’s 96.86% price total return over the past year and a 21.5% return over the last three months.
For investors seeking more comprehensive insights, InvestingPro offers 11 additional tips for Newmark Group, providing a deeper understanding of the company’s financial health and market position.
