RKF had hoped to sign 80 to 85 percent of its brokers and agents to contracts by July 1, Commercial Observer reported. But many RKF brokers balked at Newmark’s policy requiring that a percentage of commissions be paid out in company stock.
Newmark awards brokers 10 percent of commissions through restricted equity units, but that is a problem for the bulk of RKF’s salespeople who are junior and depend on a full paycheck to get by.
Brokers were told they would need to pay for attorneys to review their contracts, which many didn’t want to spend the money to do. Some senior RKF brokers are paying those costs for their unofficial team members, according to CO.
Karen Laureano-Rikardsen, a spokesperson for Newmark parent company BGC Partners, said, “There was never a July 1, 2018 deadline and the deal is expected to close by the end of the year as previously announced.”
Multiple sources told the CO that RKF chief financial officer Michael Flood said in internal meetings that RKF hoped to have the company ready to finalize the sale by July 1.
The Real Deal first reported in January that Newmark was acquiring RKF for an undisclosed price.
Correction: Due to a change in the source article, this post was updated to reflect the fact that July 1 was not an official deadline for RKF to sign the majority of its brokers to contracts in order for Newmark to complete its purchase.