The vast majority of the real estate professionals and nearly all the transactional brokers that were working in the Manhattan office of commercial real estate firm Grubb & Ellis in the months before BGC Partners merged it into Newmark Grubb Knight Frank have not gone to Newmark, an analysis by The Real Deal shows (see chart).
Of a list of more than 70 former brokers, appraisers, and other real estate professionals that were at California-based Grubb & Ellis’ Sixth Avenue office before it entered bankruptcy in February 2012, only about 20 have moved to Newmark, the analysis reveals. And of those, fewer than 10 were brokers.
The recently opened New York offices of two commercial firms Avison Young and Lee & Associates have hired the most brokers, records from CoStar Group show. Avison Young has brought on 10 professionals, including investment sales broker Vincent Carrega and his team, according to CoStar records and industry sources. Meanwhile, Lee & Associates has hired nine people in recent months. The majority of the remainder went to Cassidy Turley, CBRE Group, Studley or remained uncommitted.
The former Grubb brokers who have moved to Newmark include top producers Dan Gronich and Barrett Stern
But most of the office’s top agents did not move to Newmark. Of the eight winners of Grubb’s highest award for producers, the Circle of Excellence, between 2008 and 2010, only Stern and Gary Schwartzman moved to Newmark. Others, including Howard Rosen, Stuart Siegel and Howard Grufferman, did not.
Newmark did pick up most of the appraisal and property management employees, CoStar records and former Grubb brokers say, including Robert Von Ancken’s seven-person appraisal team.
A spokesperson for Newmark declined to comment or confirm any of the personnel details of the story. A spokesperson for Avison Young confirmed only some of the hires because several have not been announced. Spokespersons for Lee & Associates, Cassidy Turley and Studley confirmed the survey’s numbers for their firms.
The exodus comes in contrast to the public image BGC’s CEO Howard Lutnick projected in a private call to Grubb employees nationwide March 23, days before the U.S. Bankruptcy Court in Manhattan approved the sale.
In the call, he acknowledged that Newmark did not want to retain all of the Grubb brokers, but he noted the firm planned to grow. “The first step is to have all of you part of the family and on board, and the next step is to go out and hire,” he said on the call.
The New York brokerage community is debating whether the mass exit was a calculated decision by Newmark and BGC to not bring all the Grubb brokers to the Newmark office, fearing there would be overlapping capabilities. Or, on the other hand, the flight of brokers might be a sign that the new Newmark Grubb Knight Frank broker contract — that several former Grubb professionals described as highly restrictive — was onerous and turned them off from joining Newmark.
Conversations with ten former Grubb brokers this week – who spoke on the condition of anonymity out of fear of reprisal — revealed a wide range of sentiments from the philosophical to the extremely angry.
Some said the contract was oppressive and would restrict brokers’ ability to work in real estate if they ever left Newmark. One person said, “That puts the broker out of business for 12 months.”
On the other hand, one broker who had made the move to Newmark said he was pleased with his decision.
Yet another professional — who is not moving to Newmark — said the broker shakeout might have been the plan at BGC and Newmark all along for this region to avoid duplication or internal rivalries.
“I understand the merger was to increase their presence on a national level and their New York office is larger and a very successful enterprise, whereas in other offices they needed more bodies. At the end of the day, it is not surprising [that so few brokers in New York City went to Newmark],” the broker said.