From left: One57 and Extell Development President Gary Barnett; the Touraine and Toll Brothers CEO Bob Toll; and 737 Park Avenue and Harry Macklowe
In an effort to increase control and decrease costs, big condominium developers are increasingly using their own sales teams for new projects rather than hiring outside brokerages to market the units, according to the Wall Street Journal.
For example, Extell Development, which relied on the Corcoran Group to market most of the condos it built throughout the last decade, has hired its own sales staff for its massive One57 development.
“To be frank, there is an awful lot of money in sales commissions and we want to get a piece of that ourselves,” Extell Development President Gary Barnett said. The 1.5 percent to 3 percent commission selling brokers get “is a big number when you are talking about $2 billion,” Barnett said. That said, the brokers he selected, Daniel Tubb and Jeannie Woodbrey, were formerly new development specialists with Corcoran.
As margins have decreased since the housing bust, more developers are concerned with the bottom line, and internal sales teams can be a cost-cutting measure. The Journal also cited Harry Macklowe’s selection of Richard Wallgren (who led sales at 15 Central Park West) to market the condominium conversions of 150 East 72nd Street and 737 Park Avenue and Toll Brothers using an internal team to sell units in the Touraine, which hit the market in October.
Even the Related Companies, which hired the Sunshine Group to handle sales at the Time Warner Center, has followed the trend, using an internal staff to market Superior Ink and other more recent condo developments. [WSJ]