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Newmark Adds Capital Markets, Valuation Execs as Part of Aggressive Growth Strategy Following IPO

Parent Company Makes Investment to Pay Off Senior Term Loan
March 7, 2018
Newmark Knight Frank has named real estate finance veteran Anthony Orso to integrate its recently acquired Berkeley Point Capital agency lending business with ARA, Newmark's multifamily sales advisory operation.

Newmark Group, Inc. (Nasdaq: NMRK) Wednesday announced a pair of moves following the recent spin-off of its real estate service unit in an IPO late last year. The firm named real estate finance veteran Anthony Orso as president of capital markets strategies, and separately, the firm announced that its parent company, BGC Partners, Inc., has acquired $242 million of newly issued Newmark ownership units, which the New York City-based brokerage will use to repay a senior term loan used to finance last fall's $875 million purchase of Berkeley Point Financial LLC.

Orso, who co-founded conduit lender Cantor Commercial Real Estate (CCRE), is charged with growing Newmark's multifamily sales and related debt businesses and overseeing the integration of the Berkeley Point Capital agency lending business with previous acquisition ARA, Newmark's multifamily sales advisory operation. Orso will also act as Newmark's liaison with Cantor Fitzgerald's CMBS business and advise NKF on its third-party debt business. BGC Partners is affiliated with investment bank Cantor Fitzgerald, both led by veteran Wall Street executive Howard W. Lutnick.

Meanwhile, the news that BGC Partners purchased newly issued limited partnership units exchangeable for Newmark common shares is expected to provide a cash infusion for the firm. Newmark went public in early December with plans to sell 30 million shares at a price tag of $19 to $22 per share, but a lukewarm reception from investors prompted BGC Partners Inc. to cut the offering size to 20 million shares at a cost of $14 - $15 per share.

Since the IPO, NMRK shares have recovered to hover around $14.70 - $14.80 during the recent period of stock market volatility.

In its inaugural earnings call last month, the newly minted public company announced that investment sales and mortgage brokerage volume resulted in 19% growth in Newmark's capital markets revenue for 2017, and an even stronger 26% rate in the closing three months of the year.

"I credit part of this acceleration of our growth to the integration and cross-selling of our capital markets platform," Newmark CEO Barry Gosin said, adding the company's fourth-quarter and full-year 2017 performance included double-digit increases in leasing, servicing fees and global corporate services revenues.

Analysts expect the firm to pursue an aggressive growth strategy following its IPO.

"Whether enhancing its NYC capital markets team or bulking up via other national platforms, we believe Newmark won't be shy about continuing to grow both its overall share of the pie and revenue per broker," Sandler O'Neill analyst Alexander Goldfarb said in an investor note after the company's February earnings release, adding the company management team has "reaffirmed the aggressive growth strategy laid out during their recent IPO."

BGC still expects to spin-off of Newmark through distribution of all of the Class A common shares and Class B common shares of Newmark to common stockholders.

In other hiring news, Newmark has recently added to its expanding valuation and advisory practice. NKF’s V&A team has grown from about 15 to over 300 people nationally since March 2017 and continues to expand, said Rob Vodinelic, senior managing director and market leader of NKF’s valuation & advisory group in Ohio, Indiana and Kentucky.

The firm on March 2 announced the addition of five valuation team members in its Cleveland office, including Laurel A. Keller, Christopher Orlando, John A. Kelley III, Benjamin Scott and Roudy Oliver, all hired over the past five months.

NKF also announced the addition of senior leadership to lead a new hospitality, gaming and leisure practice within the valuation business.

The new leaders include Keller, based in Cleveland, who will serve as senior vice president; Nancy Dawn, executive vice president, based in the Seattle area; Lori J. Raugust, senior vice president, national team leader - gaming, based in Las Vegas; and Donna M. Bradley, senior vice president and Southern California team leader, based in Los Angeles.

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