CBRE eyes purchase of NYC retail powerhouse RKF: sources

TRD New York /
Oct.October 30, 2014 03:49 PM

The global commercial brokerage CBRE is in advanced discussions to acquire RKF, a Midtown-based retail brokerage that is consistently ranked by The Real Deal as one of the city’s most active, several sources said.

The companies have been engaged in talks within the past several weeks, one industry insider said.

However, a spokesperson for RKF denied any acquisition was in the works.

“There are no plans to sell RKF,” the company said in a statement to TRD. A spokesperson for CBRE declined to comment.

If the deal is competed, it would be the third large consolidation announced for a New York City brokerage this year. In June, the London-based global property giant Savills purchased the Midtown-based commercial firm Studley for $260 million.

And in September, Cassidy Turley agreed to be acquired by an affiliate of the brokerage firm DTZ in a deal set to close by December 31. And Real Estate Alert is reporting that Massey Knakal Realty Services is exploring a sale.

Insiders predicted that RKF would sell for between $40 million and $80 million, based on an estimate of the firm’s earnings before interest and taxes, known as EBITA, of $4 million to $8 million. Those figures could not be confirmed.

CEO Robert Futterman, founded RKF — then known as Robert K. Futterman & Associates — in 1998 after working at the retail brokerage Garrick-Aug Associates.

RKF was the second most active firm in Manhattan based on total square feet leased from 125th Street and below in 2013, according to a TRD ranking. Top brokers at the firm include Gary Alterman and Karen Bellantoni, both executive vice presidents.

The firm expanded in recent years and now has offices in seven U.S. cities including Los Angeles, Las Vegas and Chicago, as well as a presence internationally, in London and Toronto, according to the company’s website.

The publicly traded firm CBRE, headquartered in Los Angeles and led by CEO Bob Sulentic, has been on an acquisition tear over the past five years, closing on dozens of companies during that period, one person close to the company said. It recently purchased the Philadelphia-based Fameco Real Estate.

While CBRE is much larger than RKF globally, it does not have the retail reach in New York City that the smaller firm has, one source said, which would justify the purchase.

In addition, if CBRE buys RKF at a multiple below 15 times its EBITA, the sale would be a positive to CBRE’s bottom line. It is likely a trade would happen in the range of seven to 10 times EBITA, the source predicted.

The acquisition would combine companies with very different cultures, said Robin Abrams, an executive vice president at the retail-focused brokerage Lanscso. She was not familiar with the potential RKF sale.

“The business they go after is somewhat different, and the style in which they do business is different. [CBRE] is more corporate and [RKF] is a little more local and entrepreneurial,” Abrams said.

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