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Exclusive: NGKF Ramping Up National Valuation/Appraisal Practice With Key Hires, Expansion Plans

National CRE Services Firm Planning to Build Valuation, Appraisal Presence in Up to 30 Offices
March 16, 2017
Newmark announced the hiring of four more professionals to spearhead growth of the firm's valuation and advisory practice. Left to right: Ken Audette, Jason Hutchins, John Busi, Helene Jacobson and Steve DuPlantis.
Image credit: Newmark

Newmark Grubb Knight Frank (NGKF) is rolling out a national valuation and appraisal service to support ambitious plans for its investment-sales platform. After recruiting Cushman & Wakefield's former global appraisal and valuation chief, John D. Busi, last summer to lead the effort, NGKF has hired four other senior valuation execs to round out a leadership team tasked with growing NGKF's North American valuation and advisory business line.

Busi has recruited Stephen DuPlantis and Helene Jacobson, both previously senior managing directors with CBRE Group. NGKF also added Ken Audette, a former Busi colleague who served as Cushman's North America chief financial officer, and Jason Hutchins, founder and director of CBRE’s Houston-based valuation and advisory technology support team.

With a leadership team in place, NGKF is expected to follow the pattern it has pursued in scaling up its investment sales business to build its new valuation practice -- by pursuing acquisitions of local and regional valuation and advisory services operations, as well as stepped-up efforts to recruit CRE valuation pros in coming weeks and months.

"We're going to be one of the three largest firms in this space, but we're going to do it with fewer offices," Busi tells CoStar. "We're looking to have a presence in all the major hubs, with probably 26 to 30 offices around the U.S., Canada and Mexico."

After 35 years at Cushman & Wakefield, Busi is considered one of the highest profile appraisers in the industry.

"With John’s leadership, we are redefining the valuation business,” said Barry M. Gosin, NGKF's chief executive. Gosin confirmed that NGKF is planning to acquire several appraisal firms and recruit the industry’s top professionals to build out the practice.

JLL and Colliers International have also been busy expanding their appraisal and valuation operations during an unprecedented period of growth in U.S. investment sales transaction activity.

JLL late last year launched a U.S. valuation business by acquiring several affiliates of Integra Realty Resources (IRR), the largest independent commercial real estate valuation, counseling, and advisory services firm in the U.S. made up of a number of franchised offices.

Other IRR offices in the West Coast and Mid-Atlantic regions are rumored to be in play, with several national and regional firms reported to be jockeying to acquire them. Although Busi can't comment on pending M&A activity, other market sources say NGKF is in the running to acquire several IRR offices and perhaps other Integra resources.

Newmark has made significant investments to build-up its capital markets platform, and adding an in-house valuation practice is seen as an outgrowth of the company's aggressive growth in investment sales.

"NGKF is building a multi-dimensional practice that leverages technology and capital markets intelligence, harnessed by our growing platform," Gosin said in recently announcing the firm's entry into the industrial investment sales sector. "We are determined to provide the resources necessary to make NGKF the top capital markets operation in all major cities and market sectors."

Newmark broke into institutional investment sales in a big way with the 2014 acquisition of Apartment Realty Advisors (now ARA Newmark). The acquisition instantly made Newmark a major player in the multifamily sales, and also gave it a much broader entry into the institutional investment sales market.

NGKF followed up that strategic move by recruiting top office investment sales teams led by Kevin Shannon from CBRE in Los Angeles and Robert Griffin from Cushman & Wakefield in Boston, as well as landing a number of high-producing retail investment teams during late 2015 and through 2016.

Last month, NGKF acquired San Francisco-based Regency Capital Partners to expand its West Coast capital markets and financing platform. A week later, Newmark's parent company, BGC Partners Inc. (NASDAQ: BGCP), announced plans to spin off NGKF into a separate publicly traded company.

DuPlantis served for over two decades with CBRE where he led the valuation practice in the South Central US. At NGKF, he will become co-leader of the firm's U.S. valuation practice.

Joining DuPlantis as U.S. co-leader is Jacobson, who also spent nearly two and a half decades at CBRE, where she managed the firm’s Tri-State Area valuation operation. Her role included staffing, quality control, business development, portfolio coordination and marketing.

Audette will serve as senior managing director of finance and operations for the new NGKF valuation and advisory service. Previously, he worked at Cushman & Wakefield for over 17 years, most recently as chief financial officer of North America.

Hutchins joins NGKF as senior managing director of valuation and advisory technology strategies. A 20-year veteran of CBRE, he founded and has served as director of the company's Houston-based valuation and advisory technology support team.

Source for Recurring Revenue, Sales Referrals

While property sales and leasing deals attract a lot of attention, the valuation and advisory business represents a recurring revenue stream that can provide income for large brokerages during both the low and peak portions of real estate economic cycles.

"The big companies look at valuation and appraisal as recurring revenue," Busi explained. "When the markets are up, it's a stable and cyclical part of the business. When the markets decelerate, the valuation business seems to withstand that portion of the cycle better than the leasing and investment sales business."

Busi tells CoStar that Newmark Grubb is "reimagining the format of a traditional valuation practice" to devote more capital and resources to appraisers and other producers. Investing in leadership and the appraisers executing the work, rather than middle management, frees up capital to invest in technology platforms that enhance productivity, Busi believes.

"While appraisal fees have been on an unprecedented decades-long decline, technology and more widely available research resources have allowed overall revenue levels to grow," Busi said. "At the same time, however, valuation companies have been weighed down with organizational formats that cannot deliver a value proposition to the appraisers who propel the business."

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