Real estate brokerage Newmark's purchase of a United Kingdom company, on the heels of last year's acquisition of London property advisory firm BH2, is aimed at reaching its goal of generating more than one-tenth of its revenue outside of the United States by 2025.
The New York firm said early Friday it bought London-based Gerald Eve, a brokerage that operates nine offices in the U.K., for an undisclosed price. Founded in 1930, Gerald Eve is known for its work in capital markets, corporate real estate advisory, planning and development, tenant representation, landlord leasing and valuation.
CoStar News first reported the potential acquisition in August. Fourth months earlier, Newmark confirmed it had acquired brokerage BH2 as it worked to grow in the U.K.
The purchase of Gerald Eve is part of Newmark's plan to seek more sales outside its home country, Newmark CEO Barry Gosin said. In addition to Gerald Eve and BH2, Newmark has acquired U.K. retail consultancy Harper Dennis Hobbs and Paris-based flexible office subsidiary Deskeo.
"The closely aligned values and culture of Newmark and Gerald Eve position this combination for continuity and undisputed industry expertise," Gosin said in a statement.
Lower Newmark Revenue
Newmark last month reported 2022 revenue of more than $2.7 billion, a 6.9% drop from the previous year. The brokerage also said it expected its 2023 revenue to be affected by the economic slowdown as property sales and financing placements continued to decline in the first half of this year.
Newmark isn't the only global brokerage that sees opportunity outside of its home country. Last month, CBRE CEO Bob Sulentic said the Dallas-based firm expects Europe and Asia-Pacific to outperform the Americas this year across all property types.
"We expect Europe to trend better than the U.S. in terms of return to the office," Sulentic said during the brokerage's fourth-quarter conference call. "Then you go to Asia and we expect Asia to be almost like it was historically as it relates to return to the office. And we have very strong businesses particularly in Korea, Japan and China relative to what we have had there historically and relative to our competition."
In Gerald Eve, Newmark has added an operation that generated net revenue of about $111.4 million (92.7 million pounds) in Gerald Eve's fiscal year 2022. More than half of the firm's 2022 revenue came from its management services business.
Simon Prichard, senior partner of Gerald Eve, said the sale to Newmark will create "significant growth opportunities" for its clients and employees.
"For almost 100 years we have prided ourselves on our market expertise and commitment to client service and, following record revenue in the latest financial year, Newmark’s backing will further strengthen our capability to operate at the top of our game," Prichard said in a statement.
Newmark said Prichard will continue to serve as a senior partner alongside fellow Gerald Eve colleague Simon Rees, who will be a managing partner.