In the filing, BGC said the number of shares that will be offered and their price has not yet been determined. It is also unclear if BGC is planning for NGKF to become a REIT. In the filing it noted that

Following some period after the expected offering, BGC may, subject to market and other conditions, distribute the shares that BGC will hold of the newly formed subsidiary pro rata to BGC's stockholders in a manner intended to qualify as tax-free for US federal income tax purposes.

Rodin Global Goes First

BGC and NGKF do have a roadmap of sorts to follow. Last October Cantor Fitzgerald announced it would launch REIT Rodin Global Property Trust, a $1 billion non-traded REIT focusing on single-tenant, net-leased commercial properties located in the US, the UK and elsewhere in Europe. BGC Partners is an affiliate of Cantor Fitzgerald. Last month Rodin updated its preliminary prospectus with the SEC.

In both filings Rodin Global noted that

…our affiliation with Cantor provides us with unique insight and in-depth knowledge of global financial markets and local real estate dynamics. In addition, we believe our advisor's affiliation with Newmark Grubb Knight Frank will provide us with access to potential investment opportunities, many of which we believe will not be available to our competitors

Since its time with BGC, NGKF's track record more than justifies Rodin Global's statement. According to BGC Partners' Q4 earnings, announced simultaneously with the news of the filing, NGKF generated the highest-ever revenues with the company, increasing by 43.2% year over year.

NGKF CEO Barry Gosin said in the earnings call that the growth was “almost entirely organic” and outpaced the overall market, which saw US investment sales decline by 20% year-on-year in the fourth quarter.

Gosin said that its management services business increased its top line by 9.2% but that leasing and services declined by 10.9%, due to the uncertainty following the election results in the UK and US.

And then he said this:

We think that continues to make investing in commercial real estate attractive. We anticipate making further accretive acquisitions and profitable hires over the coming year, as our recently hired brokers' ramp up their productivity and as we continue to execute on our strategy. We expect to grow our revenues and profits faster than the overall industry in 2017 and beyond.

WASHINGTON, DC—-New York City-based BGC Partners has confidentially submitted a draft registration statement to the Securities and Exchange Commission [PDF] for a proposed initial public offering of one of its real estate business units, Newmark Grubb Knight Frank.

A few years ago BGC Partners was among the first wave of global brokerage companies to move to consolidation, in BGC's case by snapping up companies to bring in-house. It closed on its acquisition of Newmark & Co. Real Estate, as it was called then, in October of 2011.

Then, three years later at the end of 2014, BGC Partners announced it was acquiring multifamily broker network Apartment Realty Advisors for $110 million in cash at the end of 2014. Now it is called ARA, a Newmark company.

Now it is among the first in this cycle to test the IPO market for real estate companies, beating out Cushman & Wakefield, which has long been rumored to be planning to go public.

In the filing, BGC said the number of shares that will be offered and their price has not yet been determined. It is also unclear if BGC is planning for NGKF to become a REIT. In the filing it noted that

Following some period after the expected offering, BGC may, subject to market and other conditions, distribute the shares that BGC will hold of the newly formed subsidiary pro rata to BGC's stockholders in a manner intended to qualify as tax-free for US federal income tax purposes.

Rodin Global Goes First

BGC and NGKF do have a roadmap of sorts to follow. Last October Cantor Fitzgerald announced it would launch REIT Rodin Global Property Trust, a $1 billion non-traded REIT focusing on single-tenant, net-leased commercial properties located in the US, the UK and elsewhere in Europe. BGC Partners is an affiliate of Cantor Fitzgerald. Last month Rodin updated its preliminary prospectus with the SEC.

In both filings Rodin Global noted that

…our affiliation with Cantor provides us with unique insight and in-depth knowledge of global financial markets and local real estate dynamics. In addition, we believe our advisor's affiliation with Newmark Grubb Knight Frank will provide us with access to potential investment opportunities, many of which we believe will not be available to our competitors

Since its time with BGC, NGKF's track record more than justifies Rodin Global's statement. According to BGC Partners' Q4 earnings, announced simultaneously with the news of the filing, NGKF generated the highest-ever revenues with the company, increasing by 43.2% year over year.

NGKF CEO Barry Gosin said in the earnings call that the growth was “almost entirely organic” and outpaced the overall market, which saw US investment sales decline by 20% year-on-year in the fourth quarter.

Gosin said that its management services business increased its top line by 9.2% but that leasing and services declined by 10.9%, due to the uncertainty following the election results in the UK and US.

And then he said this:

We think that continues to make investing in commercial real estate attractive. We anticipate making further accretive acquisitions and profitable hires over the coming year, as our recently hired brokers' ramp up their productivity and as we continue to execute on our strategy. We expect to grow our revenues and profits faster than the overall industry in 2017 and beyond.