Lutnick’s BGC Partners plans IPO for Newmark

Barry Gosin outlines aggressive growth strategy for '17

Feb.February 09, 2017 06:30 PM
Barry Gosin and Howard Lutnick

From the New York website: Howard Lutnick’s BGC Partners, the parent company of Newmark Grubb Knight Frank, took the first step Thursday toward spinning the brokerage off into a separate company through an initial public offering.

The company issued a statement Thursday saying it had confidentially submitted a draft registration statement relating to the IPO with the Securities and Exchange Commission.

“Earlier today, we issued a press release relating to the confidential filing of our registration statement for the proposed IPO of Newmark, our real estate services business,” Lutnick said in a statement. “Since we are currently in the registration process, we are subject to the restrictions under the securities laws on communications relating to the offering.”

The press release noted that BGC may distribute the shares it will hold in the new public company to its shareholders. BGC stock rose 4.4 percent following the news.

BGC’s earnings for 2016 show that Newmark’s capital markets group generated $104.7 million in revenues last year, up 43 percent from 2015. Revenues for leasing services, however, declined 11 percent year-over-year to $144.5 million.

In Los Angeles, the firm made waves last year when it hired capital markets bigwig Kevin Shannon and his large team from CBRE.

A representative for Newmark was not immediately available for comment, but company CEO Barry Gosin said in a statement released with the annual earnings that the brokerage expects low interest rates and steady GDP growth to provide a boost in 2017.

“As our recently hired brokers ramp up their productivity, and as we continue to execute our strategy, we expect to grow our revenues and profits faster than the overall industry going forward,” Gosin said.

It’s not clear what an IPO would mean for Newmark in Los Angeles, but if rival brokerage Cushman & Wakefield’s plans are any indication, the company could make some big moves to make it more attractive to investors.

Industry observers have speculated Cushman is headed for a public offering ever since it was merged with Chicago-based brokerage DTZ, which is backed by private equity group TPG. The company has tightened its belt through layoffs, but also expanded with the acquisition of Massey Knakal Realty Services and poaching big-time dealmakers Doug Harmon and Adam Spies from Eastdil Secured. In Los Angeles, the brokerage has been on a hiring spree, recently nabbing Brandon Gill, Brandon Burns and Jae Yoo from CBRE — a team of brokers responsible for many high-profile development deals in the Arts District.

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