Financial firm BGC Partners will grow the average revenue per Newmark broker as
well as develop a detailed financial product tied to commercial real estate following the
purchase of the property brokerage later this year, Howard Lutnick, BGC company
chairman and CEO said this morning on a first quarter conference call.
The average revenue per BGC broker for the first quarter of 2011 is about $210,000, higher than that earned by
the average Newmark commercial real estate broker, although the amount was not
identified. (Note: clarification).
“We believe the Newmark revenue per broker is higher than its public peers,” Lutnick
said. “However, commercial real estate brokers in general have a lower production per
broker than the BGC average. We expect Newmark’s profit margins to grow to become as
high as — if not higher than — BGC’s.”
In addition, Lutnick said he expected to start a sophisticated and targeted commercial real
estate derivatives market merging the property knowledge of Newmark with the financial
modeling of BGC.
“Property derivatives are a when, not an if, market,” Lutnick said. “[BGC's] technology
is going to be… the fundamental foundation on which we are going to build a better type
of property derivatives business, that is more custom fit to the client.”
BGC, based in Midtown, announced last month that it would purchase the American arm of Newmark Knight Frank which includes about 425 brokers and a majority interest in more than 25 offices in the United
States. At the time it did not announced a purchase price.
Today, Lutnick laid the blame on Newmark principals for holding up the release of a sale
price. While he did not identify anyone by name, principals at Newmark include Barry
Gosin, company CEO, and David Falk, president of the New York tri-state region.
“Although I had hoped to share financial terms of the transaction with you today, the
Newmark principals have requested that we keep the details of the transaction private
until the closing,” Lutnick said, later this year.