Meet Gibbo, The UK Brokerage Vet At The Spearhead Of Newmark's Push Into Europe
There are many different paths to the top of the global property advisory world, but perhaps few as unique as that taken by Tony Gibbon.
He left school at 15 and worked his way up from the very bottom, running errands for a London pension fund and soaking up knowledge as he went, before becoming an agent and setting up his own firm, BH2.
With that firm, he stole a march on global rivals by securing some of the world’s largest investors like Brookfield and Tishman Speyer as clients, putting together complex, multibillion-pound deals and showing that niche firms could still compete with the big guns in an increasingly international financial universe.
He became one of the few agents in the UK known by just one name: Gibbo.
Then, for almost two decades, he resisted following the tried-and-tested playbook of selling out to a bigger rival, waiting for the lock-in period to end and hightailing it to start a new firm.
Cushman & Wakefield and Colliers came knocking and rumours of a tie-up with Eastdil swirled during that time. But eventually it was Newmark that sealed a deal to buy BH2 and create a new business, Newmark BH2.
For Gibbon and BH2, it was the moment one of the last major independent forces in London capital markets, outspoken and successful, finally became part of a global machine.
In a rare interview, Gibbon talked Bisnow through his plans to make the newly acquired firm into an expanded capital markets heavyweight, and explained why he finally sold, the lessons of his career, the uncertain market environment and what a young broker should be doing to succeed right now.
“I decided to go where no one else was going,” Gibbon said about his decision to head to the U.S. to win clients in the early 2000s when much of the London agency world was looking to Europe.
That could be a mantra for his whole career, and a piece of advice he offers to anyone in property looking to find an edge over rivals.
The new Newmark BH2 specialises in investment and leasing agency, as well as strategic development advice. The firm is consistently in the top 10 UK firms when it comes to annual investment sales and acquisitions, CoStar data showed, even though it focuses on London offices, and it hasn’t tapped into the industrial gold rush like larger rivals.
So why sell now? And what does the deal say about Newmark’s growth ambitions?
“BH2 was a private partnership from the outset, and that is always a constraint on the extent to which you can grow without bringing in new partners,” Gibbon said, explaining the decision he and his partners made to sell after almost 30 years of independence.
Bringing in new equity partners might have upset the balance of the team, Gibbon said.
But despite success in the world of London investment sales, advising clients like Brookfield on the £635M acquisition of 30 Fenchurch Street in the City district last year — and in leasing, including advising Nuveen and Blackstone on London assets — Gibbon and his partners still wanted to grow. In particular, clients were advising the firm it needed to grow its tenant rep business to remain competitive.
That’s where the need for a new owner came in, and in April this year, Newmark acquired the company. Gibbon said Newmark’s strong tenant rep business and focus on capital markets made the two companies a good fit.
“They are good business people masquerading as property intermediaries, and that’s the kind of people I like to work with,” he said. “They tick all the boxes.”
Gibbon said he also wants to add a debt business to Newmark BH2’s London offering, stating he is a big admirer of Eastdil’s real estate investment banking model, which can provide clients with both the debt and equity advice they need.
He firmly rejected the suggestion he is cashing in his chips before heading off to retirement as soon as contracts allow.
“My intention is to stay here for the next 10 years,” he said. “I’m not one of those people who sell their business, stay for a few years and then leave, that’s not who I am. I take the view that if you get into business with someone, then it’s for the long term.”
Newmark has had something of a stop-start relationship with expansion in Europe. The firm had an affiliation with UK agency Knight Frank that ran for 15 years until ending in 2021. In 2019, it bought London-based pan-European retail tenant rep specialist Harper Dennis Hobbs.
The end of the Knight Frank tie-up and the acquisition of BH2 mark a step-up of its intentions.
In August, Newmark was reportedly in talks to buy Gerald Eve, a larger UK agency firm that employs about 600 people. Gibbon would not comment on that deal specifically, nor would Newmark CEO Barry Gosin, although Gosin said there could more acquisitions in Europe in the pipeline.
“We’ve grown mostly through bolt-ons and tuck-ins of smaller companies,” Gosin said. “We’ve been successful buying smaller companies and hiring great teams that recognise our model is one that respects brokers and advisers and enables them to grow.”
Gosin said larger acquisitions come with a lot of friction and complexity. A firm like Gerland Eve would be a bolt-in rather than a tuck-in, in that it would increase Newmark’s headcount by about 10%, giving Newmark a much bigger scale in the UK in one fell swoop.
“The UK is generally the first stop for global investors before they come to the U.S., and it has been the first stop for us,” he said.
On the BH2 deal, Gosin said that when asking U.S. clients which UK firms it should look at buying “Tony and BH2 were the first names out of everyone’s mouth.
"He’s a larger-than-life character, and his knowledge of the market is incredibly impressive," Gosin said.
Gibbon grew up in the working-class east end of London, with a father who worked on the docks, a very different background to the typical middle and upper class person working in property in the 1980s — and, to a slightly lesser degree, today.
In 1981, at the age of 15, Gibbon left school and got a job in the real estate department of Prudential, now M&G Investments, then the UK’s largest property owner.
“I was making tea, coffee, sandwiches, running around for the Steve Smiths of this world,” he said, citing one of his early mentors, the former British Land chief investment officer.
In spite of the often menial nature of the job, Gibbon loved working for ‘the Pru’ and loved real estate. He got to know the City of London financial district intimately, running errands, going from building to building, learning which companies owned which assets.
“The Pru owned so much of the City,” he said. “I had such a strong interest in the business, my job was almost a hobby. It wasn’t much of a challenge when you’ve started off surrounded by bright people who think differently, think laterally.”
His job came with the opportunity to spend one day a week training as a chartered surveyor, the UK name for an agent or broker. He graduated in 1985, taking roles within firms big and small before setting up BH2 alongside London industry vets Michael Baker and Simon Harris in 1994.
Gibbon can be outspoken and direct. He admits his manner isn’t to everyone’s taste.
“I don’t like everyone, and not everyone likes me, but I get around that by working with smart people that I like and respect,” he said. “Even if they don’t like me, I’d hope they’d respect what our firm does and what it has achieved.”
Yet he clearly has a talent for winning the business and esteem of people in the industry with big ideas and big ambitions.
Gibbon cited the Freeman brothers, Michael and Peter, who founded developer Argent, as “some of the smartest and most fun people you could come across.” A longstanding relationship with the company the Freemans founded led to BH2 acting as an adviser on the sale of a stake in the giant 67-acre King’s Cross Central regeneration scheme — future London home to Google — to pension fund AustralianSuper in 2015.
In the U.S., Gibbon recalled a trip to meet a potential client at Brookfield during the tumultuous period after the Lehman collapse. His contact wasn’t available, but he got chatting to then-Brookfield Property CEO Ric Clark about opportunities in London.
Within the next few years, BH2 brought in Brookfield as the buyer of the site for what became 100 Bishopsgate, a scheme in which the investor turned a £1B profit, thanks to BH2's role as adviser to seller Great Portland Estates.
BH2 later advised Brookfield on the purchase of a £518M portfolio of assets and development sites from REIT Hammerson, an acquisition that formed a cornerstone of Brookfield’s London portfolio alongside the Canary Wharf estate.
Deals like those with Brookfield were brokered in the depths of the financial crisis, when the industry was on its knees and investors were afraid to buy back into the market.
Gibbon co-authored a 2009 article with Savvas Savouri, his then-head of research, arguing the value of London assets had fallen too far and there were great deals to be done.
“People lambasted us, they said we were just talking our book,” he said. “But we could see that this wasn’t a global financial crisis, it was a Western financial crisis, and the world had changed.”
He and BH2 worked alongside JP Morgan in helping Korea’s National Pension Service buy HSBC’s HQ in Canary Wharf for just less than £800M, which it sold for £1.1B just a few years later. Other Asian investors like China’s CIC were among early buyers in London after the financial crash. And the big U.S. opportunity funds were not far behind, he said.
As the market approaches the next big downturn, Gibbon isn’t as all-out bullish as he was in 2009, though he says there are still some areas of the London market worthy of optimism.
“We were surprised base rates weren’t increased sooner, as they should have been,” he said. “The raising of the risk-free rate will inevitably have an impact on cap rates. But I happen to think gross development values [for new schemes] will remain the same because rents are increasing due to lack of supply. So if you are developing into an undersupplied market, then that has to be a good thing.”
Occupiers that have struck deals for new leases in the last couple of years at discounted rents will find they got themselves a bargain as tenant incentives start to drop on the best quality space in London, he said.
But for the worst spaces? Get ready for that to “revert to dirt,” he said.
Newmark’s Gosin said the global investment market would inevitably be affected by deteriorating economic conditions because real estate is an interest rate and cap rate driven market.
“But there is $400B of dry powder out there," Gosin said. "Lenders have pulled back, but this is a really good time for smart people to invest."
Of running a business that specialises in capital markets at a time of fewer deals, Gosin said, “There’s no question it’s a challenging environment, but I’ve been through five of these cycles, and they have one thing in common: They come to an end. We’re not building a business for the next few months, we’re building a business for the next decades.”
Over the long term, Gibbon said the honest relationships he has built with the likes of Argent or Brookfield were key to lasting success as an agent. When he started in the industry, it was a kind of cartel, he said: Bigger agents would divvy out the deals on which they were instructed to favoured clients.
By heading to the U.S. when he did, or working with private families like the Safra banking dynasty that bought the Gherkin, Gibbon has always aimed to generate deals that would be truly accretive for the client, not just the broker.
Brokerage has changed dramatically in the past two decades, he said, with the skills he learned having fallen out of favour. In today's volatile market, however, they are more valuable than ever.
“Some of the current generation of agents in the market must be absolutely shell-shocked right now,” he said. “All they’re used to is putting together particulars of deals and then calling for best bids. Now they actually have to do some work for a living and be creative. That is what our business is, it’s creative.”
In terms of advice to young brokers who now need to generate deals in a tough market, he counsels meeting as many people as possible.
“And make sure you’ve done your homework so you can understand who they are and what they need, and what you can do to help them,” he said. “It’s an honour working in this business. You’re playing with shareholders’ money and investors’ money. Make sure you do that as if it were your own.”