Commercial real estate broker Newmark Group announced Monday that it would pay $127 million to buy the shares held by Commerce Secretary Howard Lutnick, its former executive chairman.
The Newmark transaction solidifies the grip of CEO Barry Gosin, who has run the firm since 1979 but shared power after Lutnick became the firm’s controlling shareholder in 2011.
The sale was part of a series of moves to distance Lutnick from his commercial relationships, a move he pledged to make when nominated to join the Trump administration last November. Lutnick also transferred holdings in a closely held bond-trading firm Cantor Fitzgerald to trusts controlled by his son, Brandon Lutnick. A third company controlled by Lutnick, financial-trading firm BGC Partners, agreed to buy his shares for $151 million.
Buying out Lutnick cost Newmark most of the $157 million in unrestricted cash on its books. Management said on Monday that they expect to generate cash to continue investing in the growth of the company. The firm posted a nearly $18 million operating loss last quarter on $665 million in revenue.
Newmark CFO Michael Rispoli described the transaction with Lutnick as a “unique opportunity to efficiently acquire a substantial number of shares at what we believe was a favorable price.” Newmark shares had lost 20% of their value this year heading into today, when they gained 7%.
In a note to clients, Piper Sandler analyst Alexander Goldfarb described Newmark’s acquisition of Lutnick’s shares as a positive because it eliminates concerns of a big block sale on the open market depressing the stock price. He said investors would appreciate that Gosin is fully in charge because he’s “a broker’s broker.”
One of Lutnick’s children, Kyle Lutnick, who is 28 years old, has been employed by Newmark since 2021 and was appointed to the board in February for a term that ends by the next annual meeting.
