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
    Sonder CEO Francis Davidson and 130 Duane Street (Sonder, Google Maps)
    Premier Equities buys Tribeca hotel, inks Sonder to lease
    Premier Equities buys Tribeca hotel, inks Sonder to lease
    Private investment funds targeting real estate had about $356 billion in cash reserves in April. (iStock)
    Pension funds, private equity splurge on real estate
    Pension funds, private equity splurge on real estate
    1959 Jerome Avenue, 133-33 Brookville Boulevard and 407 Park Avenue. (Google Maps)
    Office deals top last week’s mid-market i-sales
    Office deals top last week’s mid-market i-sales
    Marc Ganzi (Photo by Sonya Revell)
    How Marc Ganzi bet Colony Capital’s future on the next-gen economy
    How Marc Ganzi bet Colony Capital’s future on the next-gen economy
    Savitt Partners founder Bob Savitt and 530 7th Avenue. (Getty, 530 7th via Facebook)
    Here’s what tenants are paying at Savitt Partners’ 530 Seventh Ave
    Here’s what tenants are paying at Savitt Partners’ 530 Seventh Ave
    (Moinian Group, CVS)
    CVS signs lease for 512 7th Avenue store
    CVS signs lease for 512 7th Avenue store
    U.S. President Joe Biden removes his mask before speaking about updated CDC mask guidance. (Getty)
    In CDC we trust: Mask guidance prompts changes
    In CDC we trust: Mask guidance prompts changes
    Major real estate stocks ended in negative territory this week. (Getty)
    Real estate stocks, markets jittery over inflation
    Real estate stocks, markets jittery over inflation
    arrow_forward_ios

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

    Loading...