The Real Deal New York

Franchise players: How much do firms depend on their top brokers?

TRD research: Serhant, Steinberg, Beare, Boardman and Bracha all hold more than a quarter of their company’s listings

September 09, 2015 08:00AM
By E.B. Solomont and Yoryi DeLaRosa

RealDeal BBall Web 2-2

From left to right: Emily Beare, Leonard Steinberg, Ryan Serhant, Serena Boardman and Ilan Bracha (Illustration: Chris Manfre)

“No player is bigger than the club,” the soccer adage goes, but what about in brokerage?

Consider Ryan Serhant. The “Million Dollar Listing New York” star’s exclusives account for a whopping 57 percent of the total listings of his firm, Nest Seekers International.

And his case is far from unique. Many of the city’s top residential brokerages rely on rainmakers who hold a healthy — or unhealthy, depending on whose side you’re looking from — chunk of their firm’s total listings.

In an effort to quantify just how dependent firms are on particular brokers, The Real Deal crunched data from listings portal On-Line Residential on Aug. 3. Our analysis was limited to firms with $250 million in listings or more, and left out smaller, founder-dominated brokerages such as the Modlin Group or Dolly Lenz Real Estate. And while our one-day snapshot does not reflect closed sales, it does offer a glimpse at who’s got the most business.

Franchise Players

AgentFirmListings $ volume Firm's listings $ volume% of firm total
Ryan SerhantNest Seekers International$175.2 million$308.4 million57%
Leonard SteinbergCompass$324.8 million$636.9 million 51%
Emily BeareCORE$85.8 million $289.6 million30%
Serena BoardmanSotheby's International Realty$412.3 million$1.5 billion27%
Ilan BrachaKeller Williams NYC$75.4 million$291.5 million 26%
Pamela D'ArcStribling & Associates$121.2 million$498.7 million24%
Elizabeth LorenzoStribling & Associates$106.7 million$498.7 million21%
Bonnie ChajetWarburg Realty$47.6 million$238.3 million20%
John BurgerBrown Harris Stevens$371.1 million$1.9 billion 20%
Shelton P. SmithStribling & Associates$93.1 million$498.7 million19%
Paula Del NunzioBrown Harris Stevens$331.4 million$1.9 billion 17%
Efraim TesslerKeller Williams NYC$46.4 million$291.5 million 16%
Nikki FieldSotheby's International Realty$245.3 million$1.5 billion16%
Ginger BrokawTown Residential$82.2 million$570.5 million 14%
Debra StottsTown Residential$73.7 million$570.5 million 13%
Elizabeth Sample and Brenda PowersSotheby's International Realty$188.2 million$1.5 billion12%
Henry Hershkowitz and Heather McDonoughCORE$31.9 million $289.6 million11%
Steven GoldTown Residential$56 million$570.5 million 11%
Jason KaradusTown Residential$51.8 million$570.5 million 10%
Susan GreenTown Residential$48.8 million $570.5 million 9%
Kyle BlackmonCompass$51.4 million $636.9 million 8%
Carrie ChiangCorcoran Group$336.8 million $4.2 billion8%
Louise Phillips ForbesHalstead Property$48 million$609.3 million8%
Deborah GrubmanCorcoran Group$315.9 million $4.2 billion8%
Raphael De NiroDouglas Elliman$322.2 million$4.3 billion 7%
Source note: TRD analysis of data pulled from OLR as of Aug. 3, 2015.

Compass’ Leonard Steinberg, for example, who joined the startup as president last summer after 13 years at Douglas Elliman, had $324.8 million in listings, or 51 percent of Compass’ $637 million worth of total listings, the data show. CORE’s Emily Beare, with $85.8 million in listings, accounted for 30 percent of her firm’s total listings, while Serena Boardman had $412.3 million in listings, or 27 percent of Sotheby’s International Realty’s total listings. Keller Williams NYC’s Ilan Bracha had over $75 million in listings for 26 percent of the firm’s total.

Brokerage is a zero-sum game, and top brokers are able to use their massive networks and brands to squeeze out the competition.

“You have independent contractors who all want to do as much as possible,” said Serhant, whose catchphrase is “Expansion. Always, in all ways.” Despite being wooed constantly by rival firms, he said he’s stayed at Nest Seekers since 2008 because it gives him “complete autonomy and complete freedom.”

“There’s no bureaucracy,” he added. “I can do whatever I want to enhance my 1099.”

Though holding the lion’s share of a firm’s business is an enviable position for a broker to be in, it may not be as comforting for the firms themselves.

“It’s very dangerous for a company to have [a majority] of their business with just a couple of people,” said Elliman CEO Dottie Herman. “If the top three people have 50 percent of the listings, well if you lose those top three people you’ll be out of business.”

Brokerage firms CORE, Compass, Warburg Realty, Keller Williams, Sotheby’s and Halstead did not respond to requests for comment for this analysis.

Who’s the boss?

Rainmakers proliferate in client-driven industries like law and accounting, and residential brokerage is no exception.

For some, tenure and referrals go a long way. “Obviously, when you’re in the business that long, you build certain contacts,” said Warburg Realty’s Bonnie Chajet, who started selling real estate in 1975 and, by TRD’s accounting, had 20 percent of Warburg’s listings. “When people call me, they want me. They’re hiring me,” she said.

But others – like Serhant, who started in real estate in 2008 – are relative newcomers who have elbowed their way to the top.

Hall Willkie

Hall Willkie

“The best do the best and earn the most,” said Brown Harris Stevens CEO Hall Willkie. “It’s not surprising that it’s a pyramid.”

At BHS, agents have an average of 0.74 listings, the highest rate among the city’s top firms, according to TRD’s 2015 ranking of top firms. The firm’s median listing price is $2.6 million.

But John Burger and Paula Del Nunzio, who ranked No. 5 and No. 7 respectively on TRD’s top agent ranking in July, are in a different league. Burger, whose exclusives account for 20 percent of the firm total, had 21 listings worth over $371 million, with an average asking price of $14.3 million. Meanwhile, Del Nunzio’s $331.4 million in listings accounted for 17 percent of the firm total. She had just 10 listings, but the average asking price checked in at more than $30 million.

In general, the alpha-takes-all phenomenon is more pronounced at smaller firms.

Stribling & Associates has nearly 300 agents and just shy of $500 million in listings, but just three agents — Pamela D’Arc, Elizabeth Lorenzo and Shelton Smith — hold 64 percent of the firm’s total.

“If the top three people have 50 percent of the listings, well if you lose those top three people you’ll be out of business.” — Dottie Herman

D’Arc, who is leading sales at World Wide Group and Rose Associates’ 93-unit condo tower at 252 East 57th Street, had more than $121 million worth of listings, or just over 24 percent of the firm total. Lorenzo followed with more than 21 percent and Shelton Smith had nearly 19 percent.

“They are all really strong agents,” said President Elizabeth Ann Stribling-Kivlan, who disputed the accuracy of TRD’s portrayal. She suggested that some agents may have put their listings in contract just before TRD’s analysis, or that agents withheld listings until after the slow summer months.

Kivlan noted that D’Arc sells everything from high-priced condos to more modest, $1.5 million properties and everything in between. The bottom line, she said, is that firms need to have agents who appeal to different kinds of buyers. “You have to have your eggs in a lot of strong baskets,” she said.

Nonetheless, the phenomenon played out at other firms.

Sotheby’s, with just over 230 agents, has three top teams snagging 55 percent of the brokerage’s $1.5 billion in total listings. Serena Boardman – whose $412 million worth of listings included a $70 million triplex at the Pierre – represented 27 percent of the firm total. Nikki Field’s team had 16 percent of Sotheby’s total listings and the duo of Elizabeth Sample and Brenda Powers had 12 percent.

Ginger Brokaw, who moved to Town from Corcoran in 2012, holds the highest share of the firm’s exclusives, with 14 percent of its $570.5 million in listings as of Aug. 3.


From left: Brenda Powers and Elizabeth Sample, 80 Columbus Circle

Meanwhile, with nearly 2,000 New York City agents, no single agent – or team – accounted for more than 7 percent of Douglas Elliman’s total listings, which topped $4.3 billion. With $322 million in exclusives, Raphael De Niro’s listings represented just over 7.4 percent of Elliman’s total as of Aug. 3. Fredrik Eklund and John Gomes’ team was right behind with $316.6 million worth of listings, or 7.3 percent of the firm total. Janice Chang’s $208 million worth of listings represented just 5 percent of the firm total, and Vickey Barron’s $180 million worth of listings accounted for 4 percent.

It was a similar story at the Corcoran Group, which houses 1,200 brokers in New York City. Carrie Chiang ($336.8 million) and Deborah Grubman ($316 million) each accounted for roughly 8 percent of the firm’s $4.2 billion worth of listings. Leighton Candler’s $188 million in listings accounted for 4 percent of the firm total and Cathy Franklin, with nearly $118 million in listings, accounted for 3 percent.

“The number of an agent’s listings continually changes,” said Corcoran CEO Pamela Liebman. “While some agents will have more listings than others on a given day, that number can change dramatically from one day to the next as sales close.”

TRD’s analysis, which captures a single-day snapshot of activity, cannot account for these fluctuations.

Painful exits

Over the past two years, a flurry of leading brokers have jumped firms or decided to set up their own shops.

Dolly Lenz

Dolly Lenz

After 14 years at the top of the leaderboard, Dolly Lenz in 2013 left Douglas Elliman to open her own firm. And a year later, star agent Steinberg shocked the industry when he left Douglas Elliman for Compass.

Other departures followed. Lauren Muss jumped from Corcoran to Douglas Elliman, Kyle Blackmon left BHS for Compass and Cathy Franklin left BHS for Corcoran.

For smaller firms, landing a big fish can be a coup. “We’ve had clients solicited by firms, giving them up-front bonuses and sign-on bonuses, hoping that once there, they will hit the ground running and bring in a whole bunch of listings,” said Terrence Oved, a founding partner at law firm Oved & Oved.

Because mega-firms typically rely less on a small collection of rainmakers, the financial impact of a Lenz or Steinberg bolting is rarely a death knell. But losing a top producer still stings.

“When you’re running a firm, your customer is every agent on your roster… Clearly, if someone is a big producer, they become a very important customer.” — Kathy Braddock

“There is perception and publicity damage,” said Town Residential CEO Andrew Heiberger, who noted that in some instances, there is also a domino effect. “Other top brokers might follow,” he said.

BHS’ Willkie said it’s “definitely a challenge” when a top producer leaves. But, he added, “When they do leave, it doesn’t mean all that business goes.”

Running a firm that’s largely dependent on one or two people is risky, according to Willkie, who suggested that a better approach is to create a platform that nurtures brokers.

“With that, you grow producers all the time,” he said. “The names change on a continual basis.”

Kathy Braddock, a co-managing director with Paul Purcell of William Raveis NYC, said few agents strike out on their own for simple economic reasons. “I don’t care if you’re making an 80 percent or 45 percent [commission] split,” she said. At a larger firm, “You can have your own business with none of the fixed costs. That’s the beauty of the business.”

Often, the big players are also loss leaders for companies. “They’re being paid out at a high split, and they have a lot of extras, whether it’s assistants, office space or cars and drivers,” Braddock said.

It’s a tradeoff firms are willing to take. A star agent brings cachet and helps build the firm’s book of business.

“When you’re running a firm, your customer is every agent on your roster,” said Braddock. “Clearly, if someone is a big producer, they become a very important customer.”

Change Management

Jilted brokerages often have a tough time letting go, and in recent months they’ve entered the legal arena to keep their grip on top producers.

Earlier this year, Citi Habitats and Corcoran sued Compass, with Corcoran accusing Compass of “brazenly” raiding its talent pool. The parties settled in August, but Compass, telegraphing its intent to change the way brokerage is done, introduced a “key-person clause” to its contracts. The clause enables agents to take clients and listings with them if they leave the firm.

“The thought of forcing sellers to work with us against their will,” CEO Robert Reffkin said at the time, “in a client services business, is something that we had to rectify boldly.”