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Revenue growth of 8.5% in 2025 was driven by elevated client outreach and a late-quarter surge in private client urgency to utilize bonus depreciation benefits.
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The company achieved its strongest sales force growth in seven years, adding nearly 100 net professionals by refining recruitment standards and expanding internship and fellowship programs.
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Performance in the private client and middle market segments ($1M to $20M) outpaced the broader market with 12% growth as bid-ask spreads narrowed and regional lenders became more active.
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Financing revenue grew 23% for the year, supported by an expanded lender network of over 420 institutions and a strategic alliance with M&T Bank for agency financing.
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Institutional segment revenue ($20M+) declined 13% due to a difficult prior-year comparison and oversupply issues in specific multifamily metros impacting asset pricing.
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Management attributes improved profitability to operational discipline and the beginning of operating leverage as revenue production from recently added talent begins to scale.
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The company is intensifying its use of AI for manual tasks like underwriting and lead scoring to drive efficiency, while maintaining that human expertise remains essential for complex CRE negotiations.
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Management anticipates continued transaction market improvements in 2026 as stabilized interest rates provide a more predictable valuation benchmark for investors.
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The company expects a ‘measured incremental improvement’ rather than a sharp recovery, citing ongoing caution regarding inflation, trade variables, and potential Fed policy limitations.
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Strategic capital allocation will prioritize diversifying the platform through acquisitions in appraisal, valuation, and investment management as market certainty improves.
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First quarter 2026 revenue is expected to follow typical seasonality and be sequentially lower than the fourth quarter of 2025.
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The company maintains a strong liquidity position with nearly $400 million in cash to fund opportunistic acquisitions and continue returning capital to shareholders.
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A legal reserve taken in the third quarter impacted full-year earnings by $0.08 per share; the company is currently pursuing relief through an appeal process.
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The effective tax rate for 2026 is projected to remain in a high range of 50% to 60%.
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Management noted that situational distress in assets with aggressive legacy financing is expected to drive workout-related transaction volume over the next 12 to 18 months.
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The company successfully returned $47 million to shareholders in 2025 through a combination of dividends and share repurchases.
