Citi-Spaces yesterday closed one of its four offices, according to company founder Israel Horowitz, who squelched pervasive rumors that the 60-agent company is folding.
“I never thought of closing,” Horowitz said, adding that he, too, has heard rumors of the company’s shuttering from agents interviewing with the residential sales and rentals brokerage. The perception is so widespread, he said, that four different firms have approached him in recent months with offers to buy or merge with Citi-Spaces.
“I was considering it, but a merger didn’t make sense,” he said. “What made sense was to get rid of the office that was causing the headaches.”
That office was Citi-Spaces’ East Village branch at 174 Second Avenue, between 11th and 12th streets. The 27-agent storefront branch opened eight months ago, just as the city was descending into the financial turmoil, at a rent reflecting the previous hot market, he said.
In the tough market, the expensive space never did enough business to justify the high cost, he said, though he did not disclose the rent at the location.
“It never took off,” he said. “It never made money. We came to the decision that it was better to focus on the two other offices.”
Citi-Spaces has sublet the space to a nearby restaurant. In the transition, one receptionist was let go, he said, but the manager and assistant manager are staying with the company. Most of the agents from that space moved to the company’s Upper East Side storefront office at 1343 Second Avenue between 70th and 71st streets. Citi-Spaces also has an office at 803 Ninth Avenue and a corporate headquarters at 55 West 39th Street.
The other two offices are turning a profit, he said, and the company is far from going out of business.
In fact, though the market has slowed, he said, the company’s business in new development rentals has doubled.
Citi-Spaces has been the exclusive leasing agent for several buildings envisioned as condominiums that have been rented instead, like the Karl Fischer-designed Lofts 305 at 305 McGuinness Boulevard in Greenpoint; the Continental at 185 South 4th Street in Williamsburg, and the Canvas Flats at 12 Meserole Street in Williamsburg.
Horowitz said the company will begin marketing four new rental buildings in mid-July.
Because of the company’s strength in new development rentals, he said, the poor condo market has been an unexpected boon.
“This market actually helped me out drastically,” he said.
Until now, however, much of the firm’s profits went to prop up the struggling East Village office, Horowitz said. “We were taking a lot of money and covering losses,” he said. “We decided to stop doing that.”