Matt, anything else you want to add?
Matt Jordan: I guess, what I would add Bryan, is as we think of the back half of the year as some of the thawing plays out that Adam touched on. I can tell you, we’ve engaged with all the partners, the legacy partners. They are committed to continuing to do business with the CARROLL team that we’ve inherited and are really pleased with and the organization can quickly put capital out as that thawing plays out. When we think of their historical run rate, which was part of what attracted to us, they’ve had — they can easily do $1 billion a year. And in 2021, the organization — the legacy organization put $3 billion to work. So once this thawing plays out, we believe the partners are very aligned with the team that we’ve inherited and are happy with the RMR addition. And we think as that thawing plays out, we can quickly accelerate EBITDA growth at the residential platform.
Bryan Mahe: Great. Thank you. That’s very helpful. Appreciate it.
Operator: [Operator Instructions] The next question comes from Tyler Batory with Oppenheimer. Please go ahead.
Tyler Batory: Thank you. Good morning. Just to put a finer point on the RMR Residential commentary there. Can you talk about the EBITDA contribution from that business this year? And longer term Adam I think some pretty helpful commentary in terms of — with the outlook for second half of this year and certainly 2025 as well? Any chance you could be a little bit more specific in terms of putting some numbers around that and kind of remind us what you’re thinking longer term in terms of the financial impact of really ramping up the residential side of things?
Adam Portnoy: Sure. So really, in our prepared remarks, we talked about it. The first half of the calendar year, which gets you through June of this year, we expect it to largely to be a breakeven business. That’s our expectation. We — just because it’s breakeven doesn’t mean we’re out trying to do stuff. We just think as it ramps up. And part of the issue here is, we’re sort of restarting a business that has been kind of dormant unfortunately, for about a year. And getting its acquisition machine up and running again. And then you have the backdrop of over the last year and the first half of this year, not a lot of transaction activity. When we announced the CARROLL acquisition, we put out a presentation I think we talked about $10 million roughly of EBITDA.
$11 million to $13 million of EBITDA is what we were expecting as a run rate. I think part of our expectations at the time were two-fold. One, we thought we were actually going to close sooner than we did. It took a little longer to close. If we didn’t close the — almost the end of the year, we thought we would have done that maybe beginning of the fourth quarter last year and ended up being at the end of the fourth quarter. And the other thing that was different than our expectations was the general market conditions continue to stay very muted, meaning there wasn’t a lot of transaction volume to look at our activity. So it’s actually played out that part of the market cycle is taking longer. We are still bullish that this business will generate over $10 million of EBITDA per year.
I think that really starts happening. Third and really fourth calendar quarter of 2024 is when we say when we are expecting that to really ramp up. As we get into 2025, I think we will see possibilities of EBITDA, even greater than that $10 million or $11 million to $13 million number. I think it really can ramp up as the business matures, as we raise more cash, as we put capital out, as we raise more third party capital there as well. So that’s sort of the finer point. Matt, anything?
Matt Jordan: No, that was okay, everything.
Tyler Batory: Okay, great. And my follow-up just a quick one. The construction fees, why a little bit better than you thought in fiscal Q1, and what are you expecting next quarter and the rest of the year for that line item?
Matt Jordan: Yes, the construction — estimating construction activity is never an exact science, whether it be permitting, spend, delays, supply chain. So it’s just a matter of things accelerated as we hit the end of the year and that tends to happen for us. And I think many real estate operators, people use up their budget as they approach the end of the calendar year. And so it just a number of things fell into place favorably with some hotel renovations that were underway, which was a good thing. And then when you start the year over, it tends to start the hockey stick again as much as we’ve tried to minimize that over time, people restart their budgets and certain spend slows down. So next — this quarter we generated about $5 million in construction fees.
Next quarter, we expect that to be about $4 million, and then we expect that to ramp back up again as the year plays out. We may not get all the way back to $5 million, but will clearly trend back towards that number as the calendar quarters play out.
Tyler Batory: Okay. Very helpful. That’s all for me. Thank you.
Operator: Our next question comes from Ronald Kamdem with Morgan Stanley. Please go ahead.
Ronald Kamdem: Hey. Just going back to RMR residential. So the — so is the understanding that you’re going to be in the market. Basically the GP is going to be in the market fundraising for LPs. And as that capital gets deployed, that’s when the EBITDA starts to ramp in the back half of this year and into 2025? And then, do I have that correct? And is — can you talk about what the — because there was an earn-out, I think with the announcement. Can you talk about how the earn-out sort of factors in, what we should be looking at for that?
