Until about five months ago, two out of the four big commercial real estate brokerages in New York City were public companies. And by the time another five months are up, it’s likely that the last of the Big Four will complete its initial public offering.
And that means brokerages suddenly have deep pockets to shake things up.
“I think other brokers have benefited from these public companies and their significant war chests,” Dustin Stolly, co-head of the debt and structured finance team at Newmark Knight Frank, said Monday afternoon during a panel on commercial brokerage at The Real Deal’s 11th Annual New York Showcase and Forum.
Stolly, who joined Newmark a few months before the company issued its IPO, illustrated the impact going public can have on brokers by pointing to the signing bonus Cushman and Wakefield gave the star investment-sales team headed by Doug Harmon and Adam Spies. The brokers, he said, “broke the barrier of sound.”
“Our company is offering good brokers significant sums of money,” Stolly said on the panel, moderated by TRD’s Konrad Putzier. “Barry Gosin, our CEO, spends pretty much every second of his time recruiting folks around the country.”
When Newmark Knight Frank’s parent company took it public in December, the brokerage joined the ranks of CBRE and JLL that trade on Wall Street. And Cushman is expected to go public later this year.
Peter Riguardi, president of the tri-state region for JLL, said being a public company puts a firm in another level when it comes to competing for clients.
“We had some very large, strategic clients that, quite frankly, I think at the end of the day are only considering two firms for certain types for work,” he said.
“I think you mean three firms,” interjected Cushman’s Joanne Podell.
“No, I don’t,” Riguardi shot back. “I mean two.”
Of course, the shakeout from Newmark’s IPO is already being felt, as the firm is in talks to acquire retail brokerage RKF.
Riguardi said he thinks firms like CBRE and JLL “have another round of big consolidation in them.”
“I could see a day when there’s more consolidation. It has to be in a spot though where there’s not too much duplication, where there’s natural fits,” he said. “If you look at the demands and needs of clients on a global basis . . . I think it becomes harder and harder for small firms to compete.”