Newmark Buys 600-Strong UK Brokerage As International Push Continues
Newmark has bought UK brokerage Gerald Eve as part of a drive to ensure that more than 10% of its revenue comes from outside the U.S. by 2025.
The New York-listed broker announced Friday that it had completed the deal to buy Gerald Eve, which employs 600 people across nine offices in the UK.
The deal comes in the wake of the 2019 purchase of London-based European retail tenant representation specialist Harper Dennis Hobbs and the 2022 purchase of London capital markets and leasing specialist BH2, led by industry veteran Tony Gibbon.
In 2021 it also bought French flexible office operator Deskeo.
Gerald Eve has particular strength in capital markets, corporate real estate advisory, planning and development, tenant representation, landlord leasing and valuation, Newmark said in a press release. Offices, industrial and alternative real estate are its strongest sectors.
In the year to April 2022, it made record revenue and operating profit, with revenue coming in at £92.7M ($111M) and operating profit at £29.5M. More than half of that revenue came from management services, recurring revenue that is increasingly important to brokerages in periods like now when deals dry up.
Gerald Eve was established in 1930 on Chancery Lane in London by Charles Gerald Eve, the youngest child in seven of a farming family from Bedfordshire, about 50 miles north of London. He went on to become a president of the Royal Institute of Chartered Surveyors, the industry body of property professionals that is based in the UK.
The company is a limited liability partnership, which means it is owned by a group of partners, called members. Companies House documents showed that in the year to April 2022 there were 33 members, who took home an average profit of £893K — essentially the operating profit is paid out to the members. The profit attributed to the member with the largest remuneration was £4.5M.
Those members will also share the majority of the proceeds from the acquisition by Newmark, the price of which was not disclosed.
“Gerald Eve adds momentum to our goal of having more than 10% of Newmark’s revenue generated from outside of the United States by 2025,” Newmark CEO Barry Gosin said in a release. “The closely aligned values and culture of Newmark and Gerald Eve position this combination for continuity and undisputed industry expertise.”
Newmark produced revenue of $2.7B in 2022, which would indicate it is gunning for non-U.S. revenue of $270M or more by 2025. Its revenue was down 7% on the 2021 figure, and adjusted earnings before interest, tax, depreciation and amortisation of $511M was down 15% on 2021.
There was no announcement on whether Gerald Eve would be rebranded imminently, but Newmark did say Simon Prichard will continue to serve as senior partner of the business post-closing, alongside managing partner Simon Rees. Harper Dennis Hobbs has been rebranded to Newmark and BH2 has been rebranded to Newmark BH2.
“Joining a top global commercial real estate services company creates significant growth opportunities for Gerald Eve’s clients and our people,” Prichard said.
Of running a business that specialises in capital markets at a time of fewer deals, Gosin told Bisnow in an interview last year, “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.”
