Newmark’s acquisition of Knotel is approved

Brokerage was early investor in flex-office provider

National /
Mar.March 19, 2021 11:00 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
    McDowell wants to build 201 apartments near Homestead, puts land under contract
    McDowell wants to build 201 apartments near Homestead, puts land under contract
    McDowell wants to build 201 apartments near Homestead, puts land under contract
    Jackie Soffer with 2750 Northeast 199th Street (Google Maps, Turnberry.com)
    Jackie Soffer’s Turnberry proposes office/retail project near Aventura Mall
    Jackie Soffer’s Turnberry proposes office/retail project near Aventura Mall
    Kobi and Nancy Karp buy Walgreens-leased property in Delray Beach
    Kobi and Nancy Karp buy Walgreens-leased property in Delray Beach
    Kobi and Nancy Karp buy Walgreens-leased property in Delray Beach
    New York, Miami, Chicago, Los Angeles, San Francisco and Chicago (iStock)
    As rent explodes nationally, Miami tops the charts
    As rent explodes nationally, Miami tops the charts
    Monte Greenberg and Kaylee McCall Correa (Facebook via Colliers, Elion Partners)
    Movers & Shakers: Elion taps new capital markets managing director & more
    Movers & Shakers: Elion taps new capital markets managing director & more
    Alta Developers’ Raimundo Onetto in front of the development site (Google Maps)
    Heading south: Alta buys dev site for apartment complex near Homestead
    Heading south: Alta buys dev site for apartment complex near Homestead
    Grant Cardone and a rendering of LAs Olas Walk (Cardone Capital, ZOM/McNeal Realty)
    Grant Cardone to buy $750M in SoFla apartments
    Grant Cardone to buy $750M in SoFla apartments
    The current building on Dania Beach (Google Maps)
    Shuttered Dania Beach waterfront restaurant could get new life as Lucky Fish
    Shuttered Dania Beach waterfront restaurant could get new life as Lucky Fish
    arrow_forward_ios

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

    Loading...