Barry Gosin, chief executive of the newly formed Newmark Grubb Knight Frank, is facing a dilemma that eventually catches up with all deal makers who rise to the top ranks of the brokerage business: giving up the thrill of the chase.
Last week, Mr. Gosin showed just how good he is at it, closing one of the biggest deals in New York City in years when Morgan Stanley MS -4.06% renewed and expanded to more than 1.1 million square feet at 1 New York Plaza
But that hasn’t been the only thing keeping Mr. Gosin busy: Just days before the lease closed, he helped preside over the merger of the New York-based brokerage firm that he built with Grubb & Ellis. Grubb, which at one point was one of the most prominent brokerages in the country, had been operating under bankruptcy-court protection.
Now, as chief executive of the merged firm, Mr. Gosin isn’t going to be able to do as much deal making as he has in the past. He’s going to have his hands full integrating and expanding the new company, and its roughly 1,200 brokers, as well as coordinating with its owner, Howard Lutnick’s BGC Partners Inc.BGCP -0.90%
Mr. Gosin said as much in an interview with The Wall Street Journal: “My broker role will be significantly diminished.” But it’s clear he does so with mixed feelings. “It’s sort of in my blood,” he said, adding that he will still be involved in some transactions. “I will always be there for my long-term clients,” he said.
Rent Morgan Stanley Will Pay Over 15 Years at 1 New York Plaza
Rising through to the top of the brokerage ranks has often been a mixed blessing for top producers because, for many, deal making can be more rewarding than running the show. Managing sharp-elbowed brokers can be a particularly thankless task.
Bruce Mosler, former chief executive of Cushman & Wakefield, says he was never quite happy giving up his role as deal maker, which he returned to in 2009, just before Glen Rufrano came in to run that firm. “When you’re running a global business, you’re separated from your clients,” Mr. Mosler said. “I was a deal maker turned manager.”
Mr. Gosin bristled at the suggestion he’s opting for management over deal making. “I am not a management guy,” he said. Instead, he said his jobs will be such things as long-range planning, recruiting top-producing brokers and targeting new acquisitions. “This is the opportunity I’ve been waiting for my entire career,” he said.
Mr. Gosin and Morgan Stanley declined to discuss the lease at 1 New York Plaza. But, according to details on the deal circulating in the brokerage industry, the rent on the 15-year deal started at $41 a square foot. That puts a total value on the deal at about $770 million.
According to a standard industry formula, Newmark’s commission on a deal that size would be about $15 million. Sometimes, though, when tenants the size of Morgan Stanley expand at their existing addresses they don’t pay full commissions.
—Laura Kusisto (WSJ)