Taking a cue from other real estate companies, Benjamin James Real Estate has cut staff and closed offices amid a still-ailing real estate market.
The company is down to one office, located at 120 West 21st Street, down from three a year ago, according to Douglas Wagner, the company’s president and general manager.
The company closed its Soho office, at 96 West Houston Street at LaGuardia Place, around a year ago, Wagner said, then closed its Union Square branch, at 900 Broadway, May 1.
Fitting into one 1,000-square-foot office required the company to reduce its workforce by about 14 people during a “very unpleasant Friday afternoon” in April, Wagner said.
“Given the current climate, you do what you have to do to survive,” Wagner said. “I felt that the best strategy for our short-term sustenance and growth is a very back-to-basics approach.”
The company now has 20 agents working in the 21st Street office and 12 virtual employees who do business remotely, Wagner said.
Real estate companies all over New York have adopted a strategy of downsizing office space to save money. According to the second-quarter market reports from the city’s biggest brokerages, sales are off 50 percent and the median sales price of a Manhattan apartment has fallen 18.5 to $835,700 from $1,025,000 at the same time last year.
Benjamin James was founded in 1993 by entrepreneur James Benjamin Ferrari, who is still at the helm of the company. Known for rentals, the firm at one point had some 80 employees and four offices.
The real estate slump has been hard on the company, Wagner said. The Milan, a condo where Benjamin James is the exclusive marketing and sales agent, recently reverted to rentals after it failed to sell enough units to make the offering plan effective.
In the rental market, he said, many clients are New Yorkers looking for more space for less money, who are less motivated to move than other renters. “There’s volume but a lot of it is non-discretionary movers,” he said.
Moreover, the firm is receiving smaller commissions thanks to the prevalence of owner-paid commissions, known as OPs.” OPs tend to be smaller than brokers’ fees paid by renters, and are often paid months later, Wagner said.
Many companies have adopted shuttering offices as a cost-saving strategy in a market where some brokerages, stretched to the breaking point by high overhead, have begun to close their doors.
In addition to closing offices, Benjamin James also has stopped accepting new licenses, though that will likely change as the economy gets stronger.
“I imagine eventually we will expand again as the market expands,” Wagner said. “But I want to be here when the market comes back, and one way to do that is to streamline our operations.”