Newmark’s acquisition of Knotel is approved

Brokerage was early investor in flex-office provider

National /
Mar.March 19, 2021 10:05 AM
Knotel CEO Amol Sarva and Newmark CEO Barry Gosin (Sarva via Sasha Maslov; Gosin via Newmark)

Knotel CEO Amol Sarva and Newmark CEO Barry Gosin (Sarva via Sasha Maslov; Gosin via Newmark)

A bankruptcy court has approved the sale of flex-office provider Knotel to brokerage Newmark.

Newmark officials said they expected the deal to close quickly, Commercial Observer reported. The brokerage provided $20 million in debtor-in-possession financing after Knotel filed for bankruptcy in January, and its stalking-horse bid of $70 million brought it closer to acquiring the coworking company.

“Flexible workspace has been one of the fastest-growing areas of commercial real estate, and we expect this adaptive model will play an important role in the future of our industry,” Newmark CEO Barry Gosin told the publication.

While it is not clear how many Knotel locations will remain open, a filing with the New York Department of Labor indicated that Newmark plans to employ “many, if not most” of the 106 Knotel staffers in New York City.

Newmark was an early investor in Knotel, and Gosin has defended the flex-office provider’s business model.

But problems at the company emerged before the pandemic, as leasing fell and vacancies rose. Broader questions over whether the firm could achieve profitability — and comparisons of its business model to that of WeWork — persisted.

While Sarva said he expected Knotel to turn a profit by the end of 2020, it instead lost about $49 million in the first half of that year and owed vendors $84 million, Business Insider reported.

The onset of the pandemic brought more problems for Knotel, as offices emptied out and more companies announced shifts to hybrid work-from-home models. The firm drew a number of lawsuits from vendors who accused Knotel of halting rent payments in the wake of the pandemic.

[CO] — Georgia Kromrei





    Related Articles

    arrow_forward_ios
    Brookfield's Bruce Flatt with 1100 Newark Turnpike (Loopnet, Brookfield)
    Brookfield buys CSX industrial site in Northern New Jersey for $67M
    Brookfield buys CSX industrial site in Northern New Jersey for $67M
    198 Scholes Street, 65 Kent Avenue, 506 DeKalb Avenue and 11 Gunther Place (Illustration by the Real Deal with Getty, Google Maps)
    Avi Philipson deal to acquire All Year portfolio is back on
    Avi Philipson deal to acquire All Year portfolio is back on
    From left: McSam Hotel Group's Sam Chang and SL Green's Marc Holliday with 711 Seventh Avenue  (Getty, Google Mpas, SL Green)
    Times Square hotel developer sues neighbors over delayed demolition
    Times Square hotel developer sues neighbors over delayed demolition
    Napa Valley hot-air-balloon business lists for $12M
    Napa Valley hot-air-balloon business lists for $12M
    Napa Valley hot-air-balloon business lists for $12M
    A photo illustration of the proposed Lower Platte River Corridor (Getty, Plan Preserve Play NE)
    Nebraska lawmakers mull digging $1B recreation lake
    Nebraska lawmakers mull digging $1B recreation lake
    Illustration of Stefan Soloviev (HaydenSoloviev, CC BY-SA 4.0, via Wikimedia Commons, Getty)
    Soloviev bets long-dormant Midtown East site in casino sweepstakes
    Soloviev bets long-dormant Midtown East site in casino sweepstakes
    CHIP's Jay Martin and HCR Commissioner RuthAnne Visnauskas (Getty)
    Lies, damn lies, and statistics: Did rent-stabilized vacancies really fall?
    Lies, damn lies, and statistics: Did rent-stabilized vacancies really fall?
    PulteGroup's Ryan R. Marshall and RedFin's Glenn Kelman (PulteGroup, RedFin, Getty)
    Wall Street is bidding up housing stocks again
    Wall Street is bidding up housing stocks again
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...