A prime example of the shifting industry came in June, when Cushman & Wakefield filed for an initial public offering of stock, to join its global brethren CBRE and JLL as a public company. The timing of the offering is still unknown, but the firm is seeking to raise about $1 billion through it, much of which will go to paying down debt.

“This has been a long time coming; they’ve tried this several times before, and I think now they are at the right place at the right time,” said Faith Hope Consolo, chairman of retail leasing at New York City–based Douglas Elliman Real Estate. “They have prepared well and have set the path forward for success, and I am looking forward to seeing that story unfold.”

Earlier this year Newmark Knight Frank (Newmark Group) said it would acquire New York City–based retail brokerage firm RKF Retail Holdings, a 20-year-old independent firm specializing in retail leasing, investment sales and consulting services. That deal is expected to close sometime later this year. RKF founder, Chairman and CEO Robert K. Futterman will serve as chairman of Newmark RKF.

“This acquisition is consistent with Newmark’s goal to add top talent in all disciplines and is an important step in continuing to build the leading retail platform in both leasing [and] retail investment sales,” said Newmark Knight Frank CEO Barry M. Gosin.

Futterman is equally upbeat. “We have had many choices in partners over the years, but having known both [Newmark Chairman] Howard Lutnick and Barry Gosin for many decades, this partnership feels like family,” Futterman said.

Newmark Knight Frank went public on the Nasdaq in December 2017. As part of a spinoff from financial services firm BGC Partners, Newmark Knight Frank had hoped to sell 30 million shares at between $19 and $22 per share, but ultimately listed 20 million shares at $14 each on its first day of trading, on Dec. 15. Newmark Knight Frank is on the hunt for more acquisitions. “We were held back by the whole IPO process, but the pipeline is incredibly robust,” Gosin said.

Investment capital firms, too, are consolidating, as national firms seek to add more services and grow their client base. In June Marcus & Millichap announced that it was purchasing Pinnacle Financial Group, a Cleveland-based brokerage and servicing firm formed in 1990 and currently one of the largest independently owned financing companies in the Midwest. “With Pinnacle as part of our financing division, we fill a service gap in key areas of the Midwest with proven experts,” said Marcus & Millichap President and CEO Hessam Nadji. “The Pinnacle team will provide our investment-sales professionals and clients with financing options for all major property types, including bridge loans, mezzanine financing [and] construction loans.”

Pinnacle also brings a well-established and sizable mortgage-servicing portfolio, as well as relationships with life insurance companies and commercial-mortgage-backed-securities lenders, which is a strategic fit for Marcus & Millichap Capital Corp.

The decision to sell was easy, says Pinnacle President James E. Leonard. “We are excited for the opportunity to be involved in more transactions in a wider geographic area," Leonard said. "This will allow us to better leverage our relationships with lenders and [to] continue to expand our capital sources.” 

Consolidation is also occurring at the regional level, as many firms find it increasingly difficult to compete with the national and global players. The management of Eastern Consolidated shut that New York City–based investment brokerage firm down in July because of a downturn in investment sales and increased overhead, when co-founders Peter Hauspurg and Daun Paris were unable to find a buyer. Eastern Consolidated had recently ranked among the top 10 of New York City investment sales firms and regularly completed about 100 retail leases per year, but has faced stiff competition from the likes of Meridian Capital.

“The closing of Eastern Consolidated is the end of an era,” said Consolo. “It’s challenging for midsize regional firms to do well in this market, when investment sales activity has been steadily declining, but those brokers with talent will go elsewhere and succeed in a new environment.” Indeed, just before the shutdown, Eastern Consolidated broker James Famularo moved to Meridian Capital’s new retail leasing division, where he became president in July. “This real estate climate allows the opportunity for the stronger firms to buy up,” said Consolo. “With less competition, there is more opportunity, and those that can navigate their way through will emerge and prevail.”