BGC Completes Grubb Acquisition
- Mar 27, 2012
In a saga that began nearly a month ago, BGC Partners is about to complete its purchase of Grubb & Ellis Co. after receiving approval from the U.S. Bankruptcy Court. The combination of the two companies will give Newmark Knight Frank — also a recent BGC acquisition — and Grubb & Ellis more than 100 offices in North America as well as 250 million square feet in property and facilities management.
Howard Lutnick, chairman & CEO of BGC, said his firm will use its “deep marketplace relationships” to help the new acquisition “with the resouces they need to thrive and grow.” He went on to add that, “alongside Newmark Knight Frank, the acquisition of Grubb & Ellis creates a game-changing platform that further positions BGC as one of the most innovative and dynamic players in commercial real estate.”
As Commercial Property Executive reported on Feb. 23, 2012, an individual who’s familiar with Grubb & Ellis, and who spoke with CPE on condition of anonymity, characterized the bankruptcy as “a really rushed filing” and said that during a Tuesday afternoon hearing the judge at the U.S. Bankruptcy Court for the Southern District of New York was openly unhappy with the structure that was proposed.
Much hinged on the course of Grubb’s Chapter 11, the source suggested. If it mostly goes smoothly, BGC will have nailed down a great deal for its $25 million. But if pulling the bankruptcy together were to drag on well beyond the 30 to 45 days being mentioned as a time frame, the source wouldn’t be shocked to see BGC walk, rather than keep shelling out debtor-in-possession funding.
Grubb & Ellis has been facing a hard few months. In December, Grubb furloughed at least 24 workers just before Thanksgiving, with another round of cuts looming — and the real estate services firm was actively seeking a buyer and was undergoing a review process with Capital Partners and Colony Capital. The exclusivity on that process, which allowed C-III to make an offer for Grubb, expired in mid-January of this year. On Jan. 9, CPE reported that the NYSE de-listed Grubb for falling below $15 million in average global market cap over a 30-day period. At that point, the firm began trading on the OTCQB marketplace operated by OTC Markets Group.
Cantor Fitzgerald & Co., an affiliate of Cantor Fitzgerald L.P., acted as a financial adviser to BGC in connection with this transaction.
It still remains to be seen how commissions earned by Grubb brokers that were still unpaid as of the Chapter 11 filing will be compensated.
Check back with CPE for more as this story develops.