Amid the turmoil of the declining investment sales market, several prominent brokers at mid-sized firms have left their positions and others have changed companies in search of closing deals in recent months.
Eyal Alfi, a former senior vice president at Washington Mutual who was hired in late 2007 as president of GFI Realty Services, left the real estate company in January, said Lon Rubackin, the new head of the investment sales division, and managing partner of the GFI Retail Group. He added that it was a “mutual agreement.”
Along with Alfi, another six brokers left the company, bringing the total number of agents at the firm to about 20 from a 2007 high of around 35, Rubackin said. With the investment sales market down by about 70 percent, it was to be expected that the numbers of brokers would thin out, he said.
“It is certainly related to the economy. Our deal flow has slowed,” he said. “The lower half of the brokerage group gets frustrated and they give up. They want to change venues or get out of the business all together.”
The cutbacks at GFI Realty were mirrored in a handful of other firms in the part of the investment market involving deals below $100 million, such as Marcus & Millichap Real Estate Investment Services, Extreme Realty and Capin & Associates. A new firm, Onyx Real Estate Advisors, has closed its office.
Over the past 12 months, Marcus & Millichap has seen the number of agents fall to 43 from 51 a year ago, said Edward Jordan, the regional manager for the company’s Manhattan office.
Brokers Hal Fuchs and Morris Arlos left Marcus & Millichap and went to Besen & Associates in February, Besen chief marketing office Ronald Cohen said.
The current total of 43 brokers at Marcus & Millichap includes two recent hires from CB Richard Ellis and two from other firms over the last three months, Jordan said.
“There were a number of agents in the industry that came to trade real estate like a commodity, but as the market shifted there is more value added in the relationship model. We made a strategic decision to move some agents out who are not committed [to that model],” he said.
One of the most severe staff reduction in recent months has been at Extreme Realty in Chelsea, which has cut the number of brokers from about 30 to “the high teens,” said the company’s founding partner Joel Radmin.
“It is just a lot less transactions,” he said.
Capin & Associates laid off one broker, but the firm’s president Luca Capin, said he was replaced so there was no reduction in head count.
Onyx Real Estate Advisors, a new firm founded by three former Besen & Associates brokers in December, has closed its sole office in Greenwich Village and shut down its telephones and Web site. But the company, which is involved in a trademark dispute over its name, is not closing, according to managing principal Christen Portelli.
“Due to the trademark issue, we are relaunching shortly under a different name and simultaneously moving offices,” she said. Portelli did not provide the new company name or address, which she said she expected to disclose shortly, although she did not give a specific time frame.
Despite the poor economy, some firms are expanding.
Besen & Associates has increased the number of agents in the New Year. Ronald Cohen, chief marketing officer at Besen & Associates, said the number of brokers at that firm has risen to 35 from a low of 25 in mid-2008, and they are still hiring.
Seven brokers joined the firm in February, including two from Marcus & Millichap and five from GFI Realty.
“In light of the current market conditions there does seem to be a bit of musical chairs going on,” Cohen said.