Wednesday, April 25, 2012

What does BGC's acquisition of Grubb mean?

What does the Grubb acquisition mean?
A common question I'm hearing at the moment is, “What does BGC Partners’ acquisition of Grubb & Ellis mean to end users?” It’s a great question, and I'm excited to have great answers – particularly this early in the merger process. The key impacts to clients will come in the areas of tools, presence, service offerings, and financial resources.

Change 1: The Name
The most immediate change is the name. Call a Grubb & Ellis office and you’ll now be greeted with the name “Newmark Grubb Knight Frank.” The Newmark Knight Frank part of the name comes from the other real estate brokerage firm BGC has acquired in the past year. Bringing these two very different firms together allows BGC to take the best ideas, people and practices from both firms, merge them with BGC’s own expertise, and create a completely new firm with completely fresh perspectives.

Change 2: Tools
As a financial services organization, BGC Partners has a rich history of data analysis leading to actionable findings. Similarly, Newmark Knight Frank’s Corporate Services division has invested heavily to create unusually powerful real estate analysis tools. These intelligent approaches to business have already begun to impact the the new Newmark Grubb Knight Frank (NGKF) organization. An example is the NGKF real estate management platform, an extremely sophisticated client platform allowing real-time access to amazing amounts of data and (most impressively) allowing decision-makers to quickly run “what if” scenarios to determine how best to achieve their objectives. Budget reviews, portfolio analyses, client/owner footprint pairings, space utilization scenarios, square feet by product, Class A versus Class B profitability analysis… it’s all possible on a real-time basis.

Change 3: Presence
Grubb & Ellis was primarily a domestic firm with roughly 100 offices. BGC’s acquisition of Newmark Knight Frank gave them a real estate presence in 300 offices spread across 5 continents and a workforce of more than 8,000. The new domestic Newmark Grubb Knight Frank (NGKF) presence appears in the map below.
The Newmark Grubb Knight Frank domestic presence


Change 4: Service Offerings
In addition to technology-based tools such as the previously-mentioned real estate management platform, the combined NGKF organization offers consulting in the areas of operations, portfolio strategies, workplace strategies, business processes, location optimization, and account management in areas such as transaction management, global program management, governance program development, and facilities management. Capitalization will be another particularly strong area due to to BGC Partners’ close ties to investment bank Cantor Fitzgerald (see the following paragraph). Alone, Grubb & Ellis and Newmark Knight Frank offered many of these services within their respective footprints and areas of strength. Together with BGC, they bring best-of-breed solutions to all parts of the globe.

Change 5: Financial Depth
BGC Partners is a publicly-traded company led by Chairman and CEO Howard Lutnick. Lutnick is also the Chairman and CEO of privately-held Cantor Fitzgerald (www.Cantor.com), a prominent and highly successful investment bank and brokerage firm. BGC Partners’ 2011 revenues of $1.44B include only 3 months of Newmark Knight Frank results. With the Grubb & Ellis addition, one can only expect BGC Partners’ revenues to climb. To clients, this strength should give confidence that BGC Partners’ real estate companies have the financial depth and diversification to address any storms that the economy may bring.

In Conclusion
Grubb & Ellis, Newmark Knight Frank, and BGC Partners all have strong and well-respected histories in their respective areas of expertise. Bringing them together in a single real estate platform creates a one-stop solution to address healthcare organizations’ comprehensive needs, and the I am proud to be a part of it all. To better understand what it could mean to your organization, feel free to call or email me.

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