The Real Deal New York

Newmark Knight Frank records $54M in 4Q revenues

February 24, 2012 11:30AM
By Adam Pincus

From left: Howard Lutnick, Chairman of Cantor Fitzgerald and Barry Gosin, CEO of Newmark Knight Frank

Midtown-based commercial services firm Newmark Knight Frank took in revenues of $54.4 million in the fourth quarter of 2011, its publicly traded parent company BGC Partners reported this morning.

This was the first public reporting of earnings for Newmark Knight Frank, which BGC purchased in October 2011. Prior to that it was a closely held private company. It was also the first call since BGC announced this week that it had agreed to acquire most of the assets of national commercial firm Grubb & Ellis, which filed for bankruptcy Monday night.

Howard Lutnick, BGC chairman and CEO, said he expected some savings once BGC owned both Grubb and Newmark.

“We think the combination [of Grubb] with Newmark – allowing back offices to operate efficiently together — I think will be very effective,” Lutnick said.

While Newmark is a powerhouse in New York, it is much smaller throughout the Americas, a comparison of these figures with those of the world’s two largest firms, CBRE Group and Jones Lang LaSalle, shows.

For example the world’s largest commercial services firm CBRE, reported earnings of $1.1 billion, during the same period, and JLL reported earnings of $509.5 million for the fourth quarter for all the Americas.

In an unusual twist for commercial real estate firms, which normally have much higher income in the fourth quarter, BGC said it expects Newmark will have revenues of $45 million up to $55 million in the first quarter of 2012 (note: correction appended).

Newmark, led by CEO Barry Gosin, has offices in 36 cities throughout the United States, according to its website. Its global, London-based partner Knight Frank, which BGC did not acquire, operates in Europe, Asia, Africa and the Middle East. Newmark also has a presence in Canada through Newmark Knight Frank Devencore.

(The $54.4 million figure was fourth-quarter revenue by so-called distributable earnings, which is what earnings would have been had BGC not just purchased Newmark. Because of that acquisition, the revenue figure using generally accepted accounting practices was $45 million.)

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