This morning, BGC Partners, a global brokerage company based in New York City, announced that it was buying multifamily broker Apartment Realty Advisors (ARA) for approximately $110 million.
The acquisition is expected to help BGC grow its commercial real estate advisory firm, Newmark Grubb Knight Frank (NGKF), as well as generate annual revenues in excess of $100 million and pre-tax distributable earnings in excess of $20 million for BGC.
"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," said Howard W. Lutnick, Chairman and CEO of BGC Partners in today's press release.
"ARA represents the gold standard within the United States for the sale and financing of multihousing properties, evidenced by its recent No. 2 ranking in multifamily sales by Real Estate Alert," said James D. Kuhn, President of NGKF and head of the NGKF Capital Markets platform in the press release. "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, and with offices in 28 cities they are well positioned for continued success and future growth. We look forward to working alongside ARA and significantly adding to our growing capital markets business."
ARA completed more than $3.3 billion in multifamily sales in the first six months of 2014, representing an increase of 42 percent year-on-year, according to Real Estate Alert's ranking, which tracks commercial sales in excess of $25 million. The report ranked ARA the second largest firm in multifamily transactions and the BGC believes that the combination with NGKF will make the firm even stronger.
Mr. Kuhn, who led the acquisition effort, added: "The multihousing market is a highly attractive one, 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."