The Corcoran Group’s attempts to shore up its business on the East End go much deeper than the party it threw last night for prospective renters.
After years of aggressive expansion on Long Island’s East End, Corcoran is now closing offices and laying off staff in the region.
Last night, Corcoran threw its first-ever “East End Expo” at the real estate giant’s Madison Avenue headquarters, where some 40 Long Island brokers journeyed in hopes of luring new customers at a time when the number of summer rentals is down by half.
Less than 24 hours later, roughly 10 administrators and staff began moving out of the company’s East End operations center at 57 Hampton Road in Southampton, according to Rick Hoffman, Corcoran’s regional senior vice president for the East End. The space is being closed and its staff, including the listings, marketing and accounting departments, is moving into one of the company two’s Bridgehampton offices, at 1936 Montauk Highway. Only a receptionist was laid off in the process, Hoffman said.
Corcoran has also shuttered its 1,800-square-foot office at 28735 Main Road in Cutchogue on the North Fork, moving the agents to a nearby office, and in February, the company closed its Sag Harbor office at 96 Main Street, leaving one remaining Sag Harbor branch at 155 Main and Madison.
“It was a smart business move,” Hoffman said of the consolidations. “Any penny saved on administration is a penny we can use for better supporting the agents and our customers.”
Corcoran, which is owned by troubled real estate giant NRT, has recently closed a number of its offices in the face of the real estate downturn. In Manhattan, the company closed its Harlem office and even shrank its corporate headquarters at 660 Madison Avenue, the location of the Hamptons expo.
“Corcoran is very smart about how we run our business and where do the dollars go,” Hoffman said. “It’s not about a bunch of bricks and mortar.”
In its race to catch up with Corcoran rival Prudential Douglas Elliman, NRT went on a spending spree on the East End in recent years, buying up local companies like 12-office firm Allan M. Schneider & Associates at the height of the market.
Corcoran’s rapid growth resulted in many of its offices being located close together, Hoffman said, another reason the company is now combining them.
But soon after Corcoran’s acquisitions, the nationwide real estate downturn slammed into the East End, which has consistently fared worse than Manhattan during economic slumps. In the fourth quarter of 2008, sales in the Hamptons and the North Fork were down 40.8 percent from the previous year, according to Elliman’s fourth-quarter report. By contrast, the number of sales in Manhattan dropped 9.4 percent over the same period.
About two weeks ago, Corcoran began moving agents from the Cutchogue office to a 2,200-square foot space at 53795 Main Road in Southold, said Joshua Horton, Corcoran’s senior managing director for Cutchogue, Southold and Shelter Island. No staff members were lost in the process, he said.
“In this climate, given the changes that real estate has experienced, this puts us in a much better position to focus on other areas of support for our agents,” Horton said.
The Southold office is now the company’s only remaining office on the North Fork. It has enough space for all the North Fork agents, Horton said, and since the region is only about 26 miles from end to tip, he said he felt it wasn’t necessary to keep both offices open.
“A broker can easily service the entire market from one office that’s centrally located,” he said. “There’s no need on the North Fork to be in multiple offices.” He added: “From a sheer business perspective and supporting agents with business and staff, doing that from one office made a lot more sense to us than spreading the company out to two different locations.”
When Corcoran closed its office at 96 Main Street in Sag Harbor, it moved the agents across the street there to the other Sag Harbor office, said Gina Decker, senior managing director of the Sag Harbor office.
“It’s much more efficient,” Decker said.