BGC’s Acquisition of ARA to Drive NGKF’s M-H Growth

 By Scott Baltic, Contributing Editor

BGC Partners, parent company of Newmark Grubb Knight Frank, has agreed to acquire for $110 million Apartment Realty Advisors, of Atlanta, the nation’s largest privately held, full-service investment brokerage network specializing solely in the multi-housing sector, BGC announced Monday.

And the buyer has aggressive plans for ARA, James Kuhn, president of NGKF and head of the NGKF Capital Markets platform, told Commercial Property Executive.

Howard Lutnick, BGC Partners

The acquisitions of ARA and its members representing substantially all of ARA’s revenues are expected to drive significant growth for NGKF within the multi-housing capital markets space.

In addition, BGC expects the transactions to be immediately accretive upon closing; the closings are expected to take place in stages, with a majority (based on revenue) expected to close by year’s end.

In addition to the approximately $110 million price, additional cash- and equity-based earn-outs may be paid if certain performance targets are met.

“Acquiring ARA and its members represents an attractive opportunity for NGKF and will substantially add to the revenues and earnings of our real estate capital markets business,” Howard Lutnick, chairman & CEO of BGC Partners, said in a release.

“ARA operates in 28 cities and does $10 billion a year in transactions without NYC metro and southern California,” Kuhn added to CPE. He had noted in a release that “ARA has built a strong presence in key markets such as Texas, Florida, Northern California, Colorado and the Carolinas, each of which have seen significant population and job growth.”

“We plan on aggressively adding top brokers, as well as expanding and opening in cities like New York, Philadelphia, Los Angeles and Newport Beach,” Kuhn told CPE. “We also plan on growing ARA’s student, affordable, manufactured and seniors housing platforms.”

Kuhn noted that ARA recently was ranked number two in multi-family sales by Real Estate Alert.

“The multi-housing market is a highly attractive one,” Kuhn said in the release, “as apartment construction has grown at more than three times the rate of single-family housing over the past five years according to the U.S. Census Bureau. ARA’s recent volume growth has outpaced the overall commercial sales market, making it a compelling business proposition and a strong strategic fit for our capital markets platform.”

ARA has about 100 brokers and completed more than $3.3 billion in multi-family sales in the first six months of 2014, representing a year-on-year increase of 42 percent, according to Real Estate Alert.