Hiring the top real estate professionals will drive how Newmark expands in Germany, said Marcus Lütgering, the JLL veteran who was recently appointed by the American brokerage firm to build its business in Europe’s biggest economy.
“We really appreciate good people,” said Lütgering in an interview with CoStar News. “We treat them as sport stars. They have the best environment, and they can make the best of their lives. The biggest talents want to exceed client expectations.”
Newmark’s announcement two weeks ago that it was opening an office in Germany came seven months after the brokerage started the rollout of its Continental expansion strategy by hiring a team of veteran agents in Paris in March. The firm has a market capitalisation of $3.6 billion and employs 7,800 people worldwide.
The approach on the Continent is markedly different from the UK, where Newmark bought existing property consultancy firms, first retail specialist Harper Dennis Hobbs in 2019, then London offices broker BH2 in 2022 and national brokerage, planning and industrial leader Gerald Eve last year. In France and Germany, Newmark is building the business from the ground up by hiring top talent.
“It’s a white piece of paper which we can create the company on,” said Lütgering.
Talent, however, does not come cheap, as Michael Lehrman knows. He is Newmark's president, United Kingdom, who joined Lütgering during the interview.
“The top producers at Newmark earn more and produce more than they do elsewhere,” he said. “Because we’re focused on not being the biggest, we allow the teams to be concentrated. We don't just have swathes of people sitting in offices that do a couple deals here and there. Our cost structure is well controlled.”
When Newmark approached Knight Frank’s retail leasing team in Paris, the UK agent found that there simply was no point in trying to match the salary its US rival was offering, said a source at Knight Frank.
In Germany, Newmark wants to offer the whole range of services, from capital markets and debt advisory to leasing and valuations, with the various teams working closely together.
“You have to have a leasing story,” said Lütgering. “Once the building is bought, you need to lease it up.”
During the interview, neither Lütgering nor Lehrman would be drawn on how many people Newmark is looking to hire or which cities it is targeting next, after Munich, where Lütgering is based.
“It is going to be wherever we find the best people,” said Lütgering.
The pair also declined to say where they see themselves in the rankings of Germany’s top brokers in, say, five years’ time. Last year, BNP Paribas Real Estate was the biggest, advising on €1.5 billion of the 60 largest commercial real estate deals, followed by JLL (€1.1 billion) and CBRE (€861 million), according to a ranking compiled by Thomas Daily, a CoStar News publication.
“There's plenty of room to be number 1 in places,” said Lehrman. “These firms that are in Germany are great at what they do. They have been there for a long time. I imagine we will become a top player like we did in all the markets that we entered, but it won’t happen in a second.”
With transaction volumes down and major brokerage firms having been forced to lay off staff, the entry into Germany may seem ill-timed. But Lütgering sees positives in the current situation.
“Everybody knows we are not in a perfect, or that we are in a bad, market, but everybody is thinking ahead,” said Lütgering. “It is a good time to have quality conversations, not just with the people you want to recruit, but also with your clients.”
Investment volumes have recently started to pick up as the European Central Bank cut interest rates. On Thursday, it cut interest rates for the third time this year, lowering the benchmark rate by 25 basis points to 3.25% as the eurozone economy stagnates.
Lütgering, who Lehrman calls a “superstar rainmaker”, sees opportunities to advise on new asset classes, such as data centres. There is a lot of demand for more and bigger data centres thanks to the rise of artificial intelligence.
“In Germany, one year ago, nobody was talking about data centres,” he said “It is just one example.”
(This article was updated on 22 October to state a fully diluted market capitalisation in the third paragraph and to correct Michael Lehrman's title in the sixth paragraph.)