• GAAP Net Income: $10.6 million for Q3 2024.
• Net Income per Share: $0.04 per share of Class A common stock.
• Distributable Earnings: $28.2 million or $0.15 per share after tax.
• Dividend Declared: $0.10 per share, payable on December 20.
• Fee Earning AUM Growth: Increased 1.3% from last quarter.
• Revenue: $82.5 million, a 3% increase from last quarter.
• Capital Deployment: $617 million for the quarter.
• Multifamily Investments: $784 million year-to-date, with IRRs 23% better than pre-pandemic levels.
• Debt Strategies Deployment: $1.9 billion in the first three quarters, including recycled capital.
• Multifamily Dispositions IRR: 23.6% with a 2.39% gross multiple year-to-date.
• Occupancy and Rent Growth: 94% occupancy in single-family rental portfolio, 5.9% blended rent growth, and 11% NOI growth year-to-date.
• Fee Related Earnings: $32.4 million, decreased due to higher compensation expenses.
• Net Accrued Performance Revenue: $339.5 million on the balance sheet.

• Warning! GuruFocus has detected 7 Warning Sign with BRDG.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bridge Investment Group Holdings Inc (NYSE:BRDG) reported GAAP net income of approximately $10.6 million for the third quarter of 2024, indicating financial stability.
• The company declared a dividend of $0.10 per share, showcasing its commitment to returning value to shareholders.
• BRDG has been actively deploying capital, acquiring $349 million of multifamily and workforce assets and $40 million of logistics assets, indicating strategic growth.
• The company has expanded its areas of competence with three industrial logistics strategies and a top-performing single-family rental business, enhancing its market position.
• BRDG's fee-earning AUM increased by 1.3% from the last quarter, driven by inflows into workforce and affordable housing and debt strategies, reflecting robust business operations.

Negative Points

• Net income attributable to Bridge per share of class A common stock was only $0.04, indicating low profitability per share.
• The company experienced a decrease in net earnings from its office vertical, which is becoming a smaller part of its business.
• Transaction fees are expected to grow more modestly in the future due to the mix of capital being raised, potentially impacting revenue growth.
• Compensation-related expenses increased by approximately $3.1 million, affecting distributable earnings.
• The company faced a net insurance loss of $1.6 million, including a one-time loss of approximately $2 million, impacting financial results.

Q & A Highlights

Q: Can you provide more details on the real estate market recovery and outlook, particularly regarding fundraising, transaction fees, and realizations over the next 12 to 18 months? A: Jonathan Slager, CEO, explained that while the pace of recovery may be moderated by current yield movements, there is significant pent-up demand for transactions. The expectation is for increased transaction volumes due to a loan maturity wall in commercial real estate and substantial dry powder among investors. Dean Allara, Vice Chairman, added that retail fundraising is expected to gain momentum, with new products and distribution channels being developed.

Q: How do you view the investment spend level in 2025 relative to 2024, considering the recovery and scale building in the platform? A: Jonathan Slager noted that the logistics team is already scaled, and significant development fees are expected to start contributing positively in the back half of 2025. Dean Allara added that the distribution team has grown by 50% over the past two years, and further investment in distribution is anticipated to support growth.

Q: What magnitude of improvement in fundraising do you expect in Q4 compared to Q3? A: Dean Allara indicated that logistics is expected to see notable increases, contributing to Q4 numbers being higher than Q3. The focus is on logistics, debt, workforce, and Newberry funds, with positive re-ups and cross-sell opportunities anticipated.

Q: Is the increase in compensation a result of paying in advance of performance due to the green shoots in the market? A: Jonathan Slager emphasized the importance of maintaining morale and motivation among teams as the business grows. The increase in compensation is to ensure the team is excited and prepared for the anticipated increase in volumes and values. Katherine Elsnab, CFO, added that investing in employees is crucial as they are the company's greatest asset.

Q: Can you elaborate on the deployment backdrop in multifamily and the implications of current yield movements? A: Jonathan Slager highlighted that the short end of the yield curve is more impactful for value-add commercial real estate investing. The resurgence in securitization and CLO markets provides liquidity, and tighter spreads are expected. Despite current yield movements, volumes and values are anticipated to increase, driven by strong supply-demand dynamics in residential and industrial sectors.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.