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Financial brokerage BGC announced late Friday that it closed the acquisition of Newmark & Company Real Estate (better known as Newmark Knight Frank). Will it work? It's a unique case of a non-real estate firm buying a real estate firm, not to mention the fact that the new BGC will attempt to create a real estate derivatives market.
Newmark Knight Frank's Barry Gosin
BGC is a spinoff of Cantor Fitzgerald, also headed by Howard Lutnick, who plans to use the acquisition to expand relationships with financial institutions and enable Newmark brokers to help their clientshedge against changes in real estate prices, he says. Newmark CEO Barry Gosin (above) calls the acquisition a “unique moment in the commercial real estate industry as we align best-in-class technology with financial products and real estate." Despite Newmark's growth since the acquisition was first announced in late April,there have been reports that competitors think the merger lacks synergy and will struggle much like the attempts of Goldman Sachs and JP Morgan Chase to start real estate firms in the early 2000s.