Thank you. Good afternoon and welcome to Marcus and Millichap's Fourth Quarter and Full Year 2020 Earnings Conference Call. With us today are; President and Chief Executive Officer, Hessam Nadji; and Chief Financial Officer, Steve Degennaro. Before I turn the call over to management, please remember that our prepared remarks and responses to questions may contain forward-looking statements. Such words as may, will, expect, believe, estimate, anticipate, goal and variations of these words and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from those implied by such forward-looking statements due to a variety of factors including, but not limited to the COVID-19 pandemic, general economic conditions and commercial real estate market conditions, the company's ability to retain and attract transactional professionals, the company's ability to retain its business philosophy and partnership culture amid competitive pressures, the company's ability to integrate new agents and sustain its growth and other factors discussed in the company's public filings including its annual report on Form 10-K filed with the Securities and Exchange Commission on or about March 1, 2020. Although, the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can make no assurance that its expectations will be attained. The company undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. In addition certain financial information presented on this call represents non-GAAP financial measures. The company's earnings release which was issued this afternoon and is available on the company's website represents reconciliation to the appropriate GAAP measures and explains why the company believes such non-GAAP measures are useful to investors. Finally, this conference is being webcast. The webcast link is available on the Investor Relations section of our website at www.marcusmillichap.com along with the slide presentation you may reference during the prepared remarks. With that it's my pleasure to turn the call over to Hessam Nadji.

Thank you, Evelyn. On behalf of the entire Marcus & Millichap team, good afternoon and thank you for joining our fourth quarter and year-end 2020 earnings call. I would like to extend our well-wishes for everyone's continued health and safety. I'm pleased to report that the most challenging year in recent memory was capped the record fourth quarter with revenue of $250 million, an increase of 5% year-over-year-and 58% from the third quarter, Swift controllable cost reductions contributed to an adjusted EBITDA of $37 million during the quarter, 14% above the prior year and 200% above the third quarter of 2020. After the freezing the credit markets and the initial pandemic shock in the second quarter, the market environment showed sequential improvement in the second half of the year, which certainly contributed to our strong quarter. However, the essential drivers of our record quarterly results were the actions we deployed to combat the market disruption starting in March of last year. This includes 31 webcasts, which drew an audience of nearly 140,000 investors over 1,200 research publications and special reports and over 20 special internal training and best practice sharing sessions, featuring 50 of our most experienced professionals. These measures reinforced the company's position as a leading source of actionable market intelligence and advisory services. Most importantly, the results reflect Marcus & Millichap signature ability to help investors rapidly strategize, solve problems, execute on unique opportunities and move capital across markets and product types. Having the largest investment brokerage Salesforce in the industry, empowered with real-time research and MMCC's financing specialist brings efficiency and liquidity to our clients. This has been the company's defining value proposition throughout our 50-year history, which we're celebrating this year. Let me illustrate my point with numbers. MMI's total fourth quarter transactions grew by just…

Thanks, Hessam. We are pleased with our financial and operating performance in the fourth quarter. In many regards, our sequential results highlight the significant progress we've made since the start of the pandemic in the second quarter last year. Total revenues in the fourth quarter rose 5.2% year-over-year to a record $250 million and improved 58% on a sequential quarter basis. This was driven by the continued rebound in transaction activity across all business lines as financing was more readily available, interest rates remained at historically low levels and key investor motivations created more urgency to transact, as Hessam outline. Total revenues for the full year declined 11% year-over-year to $717 million as a result of the market disruption in the second and third quarters. In retrospect, our full year results were significantly better than expected back in early summer, which is a testament to our client's trust and the commitment and hard work of all our agents, loan originators and employees. Revenue from brokerage commissions for the fourth quarter accounted for approximately 87% of our total revenues and were up modestly year-over-year and up 54% on a sequential quarter basis to $217 million. The sequential strength is indicative of the continued recovery from the effect of the pandemic, as well as the seasonal nature of our business, which typically sees an increase in the fourth quarter. The increase also reflects resurrection of previously canceled or delayed deals, a significant catch-up factor from many investors who had gone to the sidelines in Q2 and Q3 of last year, and the macro factors outlined earlier. Our private client business accounted for 64% of our real estate brokerage revenue for the quarter or $139 million, a decline of 2% year-over-year, but an increase of nearly 42% on a sequential quarter basis. Brokerage…

At this time we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from line of Blaine Heck with Wells Fargo. You may proceed with your question.

Great. Thanks. Good afternoon. I'm interested in the pretty significant increase you guys saw on the average size of deals, both on the brokerage and finance sides of the business. Is that just reflective of maybe some of the segments of the market being more active than others at this point? Just seeing more volume and kind of that mid and large size deal segment than in the private client market segment, or is it more indicative of kind of a shift towards those larger deals for MMI in the future.

Hi, Blaine. It's Hessam. I'll take that one. It reflects the catch-up that we observe in the fourth quarter from the larger clients, especially a lot of our institutional clients at our IPA division works with down on the sideline in the second and third quarters and came back into the market much more aggressively in the fourth quarter. So, there was certainly a pandemic related 22 related factor in that. Having said that, as you know, we are hiring more experienced brokers. We've definitely shifted toward attracting more experienced loan originators, and with the additional experience that we are bringing onto the firm, those individuals tend to do larger deals. So there is a very gradual structural moving towards larger deals as our Salesforce matures and outside talent joins the company, as well as this cyclical factor we saw last year because of the pandemic.

Okay. Great. That's helpful. And then can you just talk about the opportunity set you guys see in front of you with respect to acquisitions? I mean, clearly you guys got a large one past the finish line this quarter with Mission Capital and then also tacked on LMI. Does that kind of give you enough to digest for now, or are you continuing to pursue other acquisitions? And if so, any color you guys can give on kind of the size of potential acquisitions? Are they going to be similar to Mission in large, or kind of smaller, like the other ones you've done over the past few years?

Sure, Blaine. First of all, let me give you a follow up thought on your first question. You and I have talked about this before, but I just want to reiterate it. In that -- the shift towards attracting and acquiring more experienced talent and doing larger deals is not overshadowing our private client dominance, the importance of that business, our commitment to that business and the growth opportunity left in that business. It's significant. So it's -- we're not really shifting strategies or doing one in favor of the other, we're just pursuing all of our growth opportunities, including in our core private client business, which has ample runway ahead of us in just about every product type. So, I just wanted to emphasize that point. And as it related to acquisitions, certainly the integration and successful enculturation of the companies we have acquired is a very high priority and it takes time and bandwidth, as you can imagine. But just like my previous comment about a dual strategy, that process doesn't keep us out of the market from sourcing and approaching and targeting additional targets. We're actively doing both. We've shown that we can target very quality firms and groups, bring them on board and help them improve their game, while adding to that on my platform, we're going to build on that and we're actively doing that. The advantage that we have is management teams that is out there in the field, they're very familiar with the best of the best in their local markets and where they have capacity deficits or holes that we can fill through these acquisitions. They're the best source of that ground up, grassroots is kind of a targeting and they're doing a great job of pointing out really good acquisition targets.…

Great. That's very helpful. That's it for me. Nice quarter.

Thanks a lot, Blaine.

[Operator Instructions] Our next question comes from the line of Stephen Sheldon with William Blair. You may proceed with your question.

Hey, thanks for taking my questions. On the outperformance relative to industry trends the last few quarters and the market share gains, I guess, is there a way to frame what -- you talk a lot to think about some of the internal initiatives have been, but what has been more impactful than others and really helped you drive those market share gains? And how has that influenced what you planned to do as we think about 2021 and 2022?

Hi, Steve. Thanks for your question. The interesting thing that we've observed is the success we've had in diversifying the platform over the past few years. The fact that we are now a bigger participant in larger transactions through our IPA division, certainly is noteworthy in answering your question. The fact that we have successfully built and are now exporting the best practices of a number of industrial teams around major metros that have had great success is part of the answer to your question. We have done a better job of attracting office specialists that have joined the firm in the last 18 months that are bringing that added expertise and bandwidth to the firms. So, it's a gradual process, but you can kind of feel their contribution help us in the kind of results that you saw last year, not based in the market. And, of course, on the apartment side, on the single-tenant net lease side, as it relates to retail, our historical dominance plays a very important role, especially at times of market dislocation, not only as a -- somewhat of a safety net, because there's always a steady level of trading in that private client department and single tenant retail and small strip center or shopping center retail because of death, divorce, partnership, breakups, and all the personal drivers that dominate the private client world. But it also helps us as the market recovers because we have such a strong brand and such strong presence. We're able to capitalize that and take share. So it's a combination of all of those factors.

Got it. That's helpful. And then, I guess, just given what you're seeing in the business right now and the expectations for trends to pick up in the second half of 2021, how are you thinking about your recruiting efforts? Are you going to focus even more than you maybe have historically on trying to grow, produce or headcount above the normal ranges you've discussed, kind of ahead of that expected improvement demand, I guess, how are you thinking about adding here?

Well, we've been very excited and focused on attracting and adding experienced agents and teams and loan originators for the past couple of years that goes on abet. We've never slowed it down. We have no intention of slowing it down and we've made some progress. There's more progress to be made. And I do think the strategies is helping us and will pay-off even more when the eventual release of pent-up demand both on the economic side and then drill to the investment side, really materializes. We haven't really seen that yet. And we do expect that to start to show up in the second half of the year, assuming the vaccine is successful and so on. So, the strategy isn't really changing. It's been a high priority. It's going stay a high priority. But I think what's important to message is that our visibility has increased. The fact that we were a very stable and focused platform during the worst of the pandemic last year, and we're proactive in rolling out new technology, rolling out the new website and being out there in front of record number of clients, really helps solidify the advantage of Marcus and Millichap to a lot of folks we've been talking with who weren't quite convinced that they wanted to come on board yet, who pulled the trigger because they saw what we're made up. And I really think that tailwind is going to help us not just in 2021, but in general. And we're certainly out there capitalizing on it. But let me make sure, I also emphasize the importance of the productivity retention and the care of our existing Salesforce. Again, we're a story of multiple simultaneous strategies, focusing on hiring talent from outside the company does not discount or diminish our focus on our current talent. We've had a lot of loyal people who've been here for a long time and a lot of newer people that are struggling, who were obligated to support and help. And so, I just want to make sure that the emphasis isn't only placed on the external growth factors, but also the retention and the caring and support and productivity of our existing Salesforce. They're really both important strategies.

Makes sense. Thanks for taking my questions and congrats on the results.

Thanks, Steve.

Ladies and gentlemen, we have reached the end of today's question-and- answer session. I would like to turn this call back over to Mr. Hessam Nadji for closing remarks.

Thank you, operator. And thank you everyone for joining our call and for the questions that came through. We are excited about 2021, and look forward to having you in our next earnings call. Thanks a lot. This adjourns our session.

Thank you for joining us today. This concludes today's conference. You may disconnect your lines at this time.