Deal estimated at $875 million, subject to certain adjustments at closing
Global brokerage firm BGC Partners has announced it will require “100%” of Berkeley Point Financial (BPF) in a deal that’s expected to “dramatically increase” the brokerage’s revenues and earnings. BGC’s board of directors have unanimously approved the deal.
The brokerage is expected to pay $875 million, subject to certain adjustments at closing. BPF will then become part of its real estate services segment, Newmark Knight Frank.
BPF originates and services multifamily loans as part of programs run by government-sponsored enterprises such as Fannie Mae and Freddie Mac, as well as by the Department of Housing and Urban Development.
"This transaction will combine BPF's top-five Fannie Mae and Freddie Mac multifamily origination business with ARA, Newmark's top-three multifamily investment sales business, along with our fast-growing commercial mortgage brokerage business,” said Newmark CEO Barry Gosin. “We believe that this combination will be a catalyst for dramatically higher revenue and earnings growth for Newmark.”
He expected that BPF will drive the brokerage’s margins higher, as it is “more profitable” than BGC’s publicly-traded commercial real estate services peers. Gosin said that BPF generated approximately 30% of its revenues from stable and recurring loan servicing fees, which come from mortgage servicing rights with an average duration of almost eight years. “These servicing fees, alongside Newmark's existing property management, facilities management, advisory, consulting, and agency leasing businesses, mean that a significant amount of our revenues and earnings will be recurring and predictable.”
BPF CEO Jeff Day said the deal will give them the ability to offer clients a broad array of financing options. “This diverse suite of offerings covers the full spectrum of products applicable to tenants, landlords, and investors, which will be unmatched across the commercial real estate services industry.”
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The brokerage is expected to pay $875 million, subject to certain adjustments at closing. BPF will then become part of its real estate services segment, Newmark Knight Frank.
BPF originates and services multifamily loans as part of programs run by government-sponsored enterprises such as Fannie Mae and Freddie Mac, as well as by the Department of Housing and Urban Development.
"This transaction will combine BPF's top-five Fannie Mae and Freddie Mac multifamily origination business with ARA, Newmark's top-three multifamily investment sales business, along with our fast-growing commercial mortgage brokerage business,” said Newmark CEO Barry Gosin. “We believe that this combination will be a catalyst for dramatically higher revenue and earnings growth for Newmark.”
He expected that BPF will drive the brokerage’s margins higher, as it is “more profitable” than BGC’s publicly-traded commercial real estate services peers. Gosin said that BPF generated approximately 30% of its revenues from stable and recurring loan servicing fees, which come from mortgage servicing rights with an average duration of almost eight years. “These servicing fees, alongside Newmark's existing property management, facilities management, advisory, consulting, and agency leasing businesses, mean that a significant amount of our revenues and earnings will be recurring and predictable.”
BPF CEO Jeff Day said the deal will give them the ability to offer clients a broad array of financing options. “This diverse suite of offerings covers the full spectrum of products applicable to tenants, landlords, and investors, which will be unmatched across the commercial real estate services industry.”
Related stories:
Freedom Mortgage to acquire bank’s residential mortgage assets
CoreLogic announces planned acquisition of Mercury Network
