BGC Partners Acquires Grubb & Ellis

From this standpoint, the acquisition deal could offer NKF, which has a potent brokerage business led by top performers like David Falk, Mark Weiss, Neil Goldmacher, Jimmy Kuhn, Mr. Gosin and Moshe Sukenik, access to potentially valuable relationships – an aspect of its merger last year with BGC, which NKF executives trumpeted as a chance to work with BGC’s stable of financial clients.

“There just never was enough leadership at Grubb to ever really get the brokerage business aligned with the other services it was doing a lot better with,” the source said.

G&E declared Chapter 11 yesterday and the deal to acquire it was structured in a way in which BGC will extract its assets through what is known as a Section 363 sale process of the U.S. bankruptcy code. BGC’s debt against the company was listed as equivalent to about $30 million and it agreed to provide up to $4.8 million in financing to keep G&E operating during the bankruptcy process, figures that appear to suggest BGC will pay around $34.8 million to do the deal.

“Following a thorough and rigorous process and the evaluation of all available options, we
determined that a partnership with BGC provides the best platform for our brokerage professionals, employees and clients,” Thomas P. D’Arcy, president and chief executive officer of Grubb & Ellis said in a statement. “We believe the transaction will be seamless for our clients and we expect no disruption to the company’s operations. Furthermore, we believe our professionals and clients will benefit greatly by being part of the BGC organization, which, with its recent acquisition of Newmark Knight Frank, will bring together two strong brands to create a powerhouse in the commercial real estate space. BGC’s purchase of the company’s senior debt and its willingness to provide incremental financing to ensure the smooth execution of the sale process demonstrate its commitment to the success of the Grubb & Ellis business.”

Several G&E brokers in Manhattan who were reached by phone said that they were uncertain what the deal meant and whether they would transition to NKF in the merger.

“It’s all unclear right now what’s going to happen,” one broker said.

Dgeiger@observer.com