Bloodletting Continues as Grubb/NKF Merger Develops

In BCG's takeover of Grubb & Ellis, it's becoming clear that the new acquisition will be placed under the assets of Newmark Knight Frank, not alongside them, as the two companies join to create Newmark Grubb Knight Frank.

If for some reason it wasn’t clear initially, it’s obvious now which company is by far the bigger dog in the merger of Newmark Knight Frank with Grubb & Ellis to form Newmark Grubb Knight Frank. Last Friday’s announcement that NKF veterans Barry Gosin and James Kuhn would be the expanded company’s CEO & president, respectively, has since been fleshed out with further evidence that the remnants of Grubb & Ellis are very much being placed under NKF and not alongside it.

The announcement by BGC Partners that it had closed the acquisition of Grubb, following approval of the deal by the U.S. Bankruptcy Court of the Southern District of New York, stated, “BGC is rapidly integrating Newmark Knight Frank” with Grubb & Ellis. That was clearly more than just stock verbiage.

For one thing, with all the personnel losses at Grubb in recent times, NKF was already at least double Grubb’s size in terms of number of professionals. And a source who’s familiar with Grubb & Ellis and spoke with Commercial Property Executive on condition of anonymity detailed some very recent departures from Grubb, both apparently voluntary and reportedly not.

“There’s been an exodus of brokers across the country,” the source said, most visibly among certain key regional people. For example, Mark Ballenger, managing director in Denver, reportedly was laid off last week. By that time, according to the source, Grubb’s Denver office had already been down to almost no one anyway.

Similarly, Bob Dean, regional managing director for Northern California and the Pacific Northwest, reportedly was let go last week.

According to media reports, Moody Younger, the executive managing director of Texas for Grubb who had arrived from CBRE in 2008, resigned last week, as did managing director Kathy Parmenter, Young’s right-hand person.

Former Grubb COO Jack van Berkel, who resigned about six weeks ago but stayed on under contract, is now also gone, the source told CPE. And apparently neither CEO, president and board member Tom D’Arcy nor former CFO Mike Rispoli will be retained.

Inaugural Newmark Grubb Knight Frank CEO Barry Gosin has been Newmark Knight Frank’s CEO since 1979. He’s a graduate of Indiana University.

The merged company’s president, James Kuhn, joined Newmark Knight Frank as president in 1992 after 15 years in partnership with Bernard Mendik. He then spent two years in partnership with Bear Stearns and Chuck Davidson of Steinhardt Partners, purchasing distressed assets from the RTC, FDIC and other financial institutions. Kuhn holds a BBA in finance and an MBA in real estate, both from Syracuse University.