| Financial brokerage BGC announced Friday it closed the acquisition of Newmark & Co Real Estate (better known as Newmark Knight Frank). It's a unique case of a non-real estate firm buying a real estate firm. But lots of real estate pros are asking the big question: Will it work? | |
| The new BGC will experiment with
the creation of a real estate derivatives market. 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 clients hedge 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 deal was first announced in late
April, there've been reports that competitors think the merger lacks
synergy and will struggle much like the attempts of Goldman Sachs and JP Morgan Chaseto start real estate firms in the early 2000s. (Though if people didn't
attempt bold ideas despite previous failure, we would never have the
airplane or Michael Jordan.) | |
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