HFF Hits New Highs on Quarterly, Yearly Revenues

PITTSBURGH—HFF's revenues and operating income reached record levels in the fourth quarter, the locally based financial intermediary said late Tuesday afternoon. Its record-setting pace capped a year which itself hit new high water marks for revenues.

Q4 saw revenues of $131 million, a 34.6% year-over-year increase, while net income was up 15% over the same quarter a year earlier. For 2013 as a whole, HFF saw record total revenues of $355.6 million, an increase of 24.8% over 2012 figures. Operating income for the year ended Dec. 31 was a record $70 million, an increase of 39.6% over the year prior.

John H. Pelusi Jr., HFF's CEO, cites “continued improvement in the public and private sectors of the US commercial real estate capital markets” during Q4, thanks in large measure to the “ongoing, unprecedented” quantitative easing by the Federal Reserve and most other global central banks. Coupled with a gradually improving economy, these conditions continued to benefit “certain sectors” of US CRE, notably core, core plus, value-add and “certain opportunistic properties in nearly all the major markets as well as in some select secondary markets with proven economies.”

In general, Pelusi says, “we expect to see further modest improvement in property-level fundamentals” for most asset types in most of the major markets and in select secondary markets with proven economies. Throughout the year, he says, we'll continue to see “more stagnant in less proven secondary markets, whose economies are stagnating or declining,” as well as in most tertiary markets.

“As previously reported, we believe improvements in property level fundamentals as well as transaction volumes in the US commercial real estate capital markets will remain vulnerable to the key macro domestic and global concerns which have been with us since late 2007,” Pelusi adds. Tuesday evening's conference call to discuss Q4 and full-year results could be the last in which Pelusi will participate; he announced this past fall that he would step down as CEO effective April.