The Real Deal New York

Rental listing competition heats up

November 16, 2007
By Tom Acitelli

In rental listings, it’s often personal – not (just) business.

“The number one source for a company’s listings are from the principals’ experience as sales people with their previous brokerages,” said Bruno Ricciotti, a principal of Bond New York, who co-founded the brokerage after leaving Citi Habitats. “It’s a matter of what degree of relationships are developed between property owners and those managers of brokerage firms.”

Calling the competition for listings fierce, Mark David Fromm, founder and president of Mark David & Company, says his brokerage has five employees whose full-time job is acquiring listings from landlords. “If you give them the best deals,” Fromm said of landlords, “they’re going to stick with you.”

Getting and guarding (and sometimes sharing) the listings can, then, ultimately be as much about handshakes as about business acumen. For instance, the city’s smaller landlords – those who own a few units or less – tend to share listings only with brokers they’ve forged a working relationship with, says Daniel Baum, president and co-founder of the Real Estate Group. That, of course, means that somewhere, somehow that relationship has to be forged in the first place.

“For the most part,” Baum said of smaller landlords, “they’re very protective of their property. They don’t like to work with large rental firms. They like the boutique firms they feel are really going to take care of their property.”

Larger landlords share their listings more openly and more often with brokers. A huge landlord like the Related Companies and Glenwood Management, with thousands of rental units across the city, simply needs the services of rental brokers the same way the brokers need the listings. But, even in this symbiosis, the personal matters: Unless the listings are exclusives, brokers say, the landlord usually doesn’t share them, often making rental listings more closely guarded than sales ones.

Also, the Real Estate Board of New York’s rule for having member firms share listings within 72 hours of getting them applies only to exclusives.

“There are a plethora of properties that are open listings [in the rental market],” Baum said, “meaning that, if you know about it, you can rent it. But, if you don’t know about it, no other brokers are going to tell you about it.”

One way around that, and something Ricciotti says has become increasingly more common in the rental listings hunt, is to learn about a landlord’s listings through a broker who’s jumped ship to a new firm.

Rental brokers do not make as much money as they did five or 10 years ago, Ricciotti says, as do-it-yourself Web sites such as Craigslist now allow tenants to bypass brokers altogether, at a time when new rental development, especially in Manhattan, is all but nonexistent. Rental brokers, then, may be more apt today to switch firms in search of business. And, when they do, they may take listings or inside knowledge about a landlord with them.

“It’s harder today to hoard listings because there’s more people moving between companies,” Ricciotti said. “With higher turnover, secrets get shared from company to company – that’s helped, I think, to even out the listings game.”

The game may be particularly heated this winter. Sales activity in the Manhattan housing market declined nearly 22 percent in the fourth quarter of 2005, according to appraisal firm Miller Samuel, and sales prices remain prohibitively high for millions of New Yorkers or people wanting to move here. Couple these current market realities with that of the city’s housing stock being overwhelmingly rental (about 2.1 million units), and rental listings are all the more coveted.

“This is a business about charisma,” said Ricciotti of the rental market. “Those [brokers] that are out there, outgoing, and developing their relationships – that is the primary way to get listings.”

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