The Real Deal New York

Urban Compass nabs 3 more teams from Corcoran

Startup’s pipeline for new development marketing now tops $1.5B

September 04, 2014 09:37AM
By E.B. Solomont

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From left: Stacey Froelich, Robert Reffkin and Jesse Shafer and Greg McHale

From left: Stacey Froelich, Robert Reffkin and Jesse Shafer and Greg McHale

Real estate startup Urban Compass nabbed three more broker teams – and upwards of $35 million in exclusive listings – from rival brokerage the Corcoran Group.

Among the hires is the top-producing LaChance Team, a five-member unit led by Debra LaChance that is bringing more than $25 million in exclusives to Urban Compass, the brokerage told The Real Deal. The group, which includes Denise LaChance, Ariel Brenner, Betsey Kane Margolies and Kimberlee Knecht, joined Urban Compass as of Wednesday, and their listings were immediately removed from Corcoran’s website.

Also jumping to Urban Compass from Corcoran are the Shafer-McHale Team, comprised of Jesse Shafer, Greg McHale and Natalie Hedden, and the Froelich Team, led by Stacey Froelich, a 12-year Corcoran veteran who closed deals worth $30 million last year. The Froelich group, which includes Carla Slocum Friedman and Robert Godby, is bringing $7 million in exclusives.

“In these three cases, they reached out to us, either directly or through an agent,” said Urban Compass CEO Robert Reffkin, whose goal is to have 200 to 300 agents.

A spokesperson for Corcoran did not respond to requests for comment.

In a statement, the Shafer-McHale team cited Urban Compass’ focus on technology as a reason for joining the startup. “It is our belief that the agent software Urban Compass has developed represents a serious page-turning moment for the entire real estate industry,” the agents said in a joint statement.

Urban Compass currently has $346 million worth of exclusive sales listings, including the new teams’ listings, the company told TRD. At this point, the brokerage has 82 agents.

Since launching in May 2013, Urban Compass has recruited top brokers from others firms, notably Leonard Steinberg and Hervé Senequier from Douglas Elliman, who brought over about $250 million worth of listings with them. Early on, the firm hired Gordon Golub, former executive vice president of Citi Habitats, and Sofia Song, StreetEasy’s former vice president of research. And this summer, Urban Compass brought on the Hustis/Jovanovic team, also from Corcoran.

In July, Urban Compass hired Roy Kim, formerly Extell Development’s top design executive, to build a new development team at the startup. Previously, Kim worked on projects including One57 and the Carlton House.

Reffkin said Urban Compass now has a pipeline of more than $1.5 billion in new developments in Manhattan, a result of “developers reaching out to us over the course of the summer.” He declined to share additional details about the developments.

The new development team is comprised of seven people, with plans to make two more “key hires,” Reffkin said.

Urban Compass is valued at $360 million, having raised more than $70 million to date. In July, it raised $40 million  in a Series B funding round — this only a year after raising $25 million in a Series A round from investors such as Salesforce’s Marc Benioff and Condé Nast parent Advance Publications. Benioff was involved in funding in July as well.

But the brokerage has also been slammed with two lawsuits alleging it stole trade secrets – including a suit filed by Citi Habitats accusing Urban Compass of improperly gaining access to its proprietary listings database. The case is ongoing.

  • shawn

    I love Urban Compass!! They are the future of real estate. Congrats!

    • Frick

      Shill .

    • Jonathan Doe

      Yeah, and you probably work for Urban Compass’ PR and marketing department

  • Dave M.

    The success of Urban Compass is unstoppable

    • Frick

      Shill

  • Observer

    Corcoran’s efforts to intimidate Urban Compass and scare agents from joining by issuing a lawsuit through their CIti Habitats subsidiary clearly didn’t work : )

    • Veteran Broker

      Exactly.

  • Realestateforsure

    When Urban Compass inevitably crashes and burns, I hope these agents run back to the established brokerages to beg for their jobs back and all they get is a big laugh and shown the door. Urban Compass is the best example of ego’s and technology gone horribly, horribly wrong.

    • Lee

      Nice positive attitude.

    • M.K

      and you are not bitter at all… HA

    • Frick

      troll

    • Jonathan Doe

      You are total right about that!

  • john

    Im confused how agents take their listings with them. I thought listings belong to the broker.

  • Broker

    It surprises me that nobody has talked about how Corcoran’s site has crashed multiple times in the last month and their new overhyped listing system broke and made it impossible for their agents to upload their listings which infuriated their clients. You can’t underinvest in basic technology at the expense of your agents businesses. This problem will only get worse over time.

  • LovingLife

    John – clients hire agents – not brokerages. They are able to exit the exclusive and move it to another brokerage if they wish. Realestateforsure – what are you talking about? It would appear that you have no idea what is actually happening at Urban Compass – but what would this site be without uninformed naysayers?

  • Veteran Broker

    Well done. Urban Compass is snagging the exact talent to bring real estate into the Web 3.0 world!!

    • OMGTechnologyTechnology

      Web 3.0…lol

  • Frick

    never heard of them

  • TomDUWS

    Could be wrong but my guess is that most of the people joining Urban did it for the money. Better splits and probably less expenses than Corcoran, etc. The technology may be great but I would follow the money

  • dolcissimo1

    Urban Compass is certainly expanding aggressively. If they play their cards right, they could be the next Town Residential.

  • Jonathan Doe

    What is in the secret sauce at Urban Compass… Well I can tell you as I worked there.
    1.) Lots of investors
    2.) poach top brokers from other firms
    3.) Offer base salaries to top agents (SALES TEAMS NOW)
    They are basically using people as stepping stones. They started out as a rental firm until they got more investor funding and were able to attract “bigger talent” once they were able to offer base salaries (which is something NYC real estate has not seen). Once they were able to do this, they then starting dropping all their original agents because they need more “Space”.
    This ruthless business model may bode well in the world of finance, but clearly has no long term sustainability in real estate. I feel bad for ALL the agents working there – they are just stepping stones on the greedy plight of Robert Reffkin and his ruthless crew.

  • Jonathan Doe

    This firm is so greedy and ruthless. They are paying base salaries to top sales agents and poaching them from all the top firms. That is the secret to their “success” – which will more than likely be short lived.

  • Jonathan Doe

    I had the misfortune of working at this greedy, ruthless start-up so I can give you the details that everyone is squirming for. They are getting lots of investor funding so they have now started to offer base salaries and high commission splits to top sales agents from Corcoran, Halstead, and Elliman (that’s the secret!). Once they nab (steal) these agents they drop other agents that are making less (example: their original hardworking rental agents). They are basically ruthless users and each month they crank out their excel spread sheets and fire a bunch of their agents to make room for their new cash cows.

  • Jonathan Doe

    I worked at Urban Compass. They are total users.
    They get investors money and poach top talent with it by offering base salaries, high commission splits, and stock options. Then they fire agents when a more established agent or team comes along because it is all about the bottom line, excel spread sheets, and crunching numbers. They need to start treating people like humans and they should invest the investors money in the agents they have and build their careers instead of poaching and using.

  • Jonathan Doe

    This is the most ruthless business establishment on the scene right now. They are poaching and taking agents from all the large firms, and they dropping their original agents as soon as “someone better comes along”.

  • Jonathan Doe

    any negative comments posted on this site are posted by employees of Urban Compass – they spend a lot on PR and marketing their firm, so don’t believe all these comments

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