In a time when some New York real estate companies, including Warburg Realty, are downsizing, Warburg has entered into a self-described “strategic alliance” with Hamptons brokerage Saunders & Associates.
The Hamptons real estate market has been hard hit recently and many firms are feeling the pain. The Corcoran Group has significantly scaled back the number of agents it maintains on the East End; over the last two years the company has cut 80 salespeople, according to an article in the May issue of The Real Deal.
Warburg and Saunders took great pains to assure that this is in no way a merger
and that they will retain their separate identities. There hasn’t been
any indication that they plan to change their names in the near future.
Frederick Peters, the president of Warburg Realty, said the partnership allows his roughly 150-person firm to have a Hamptons presence without a Hamptons office.
“The whole point from my perspective is, ‘I don’t want an office in the Hamptons,’” Peters said. “The whole point of doing something like this is the acknowledgment that I do well what I do well … what I do well is sell in [Manhattan].”
The relationship involves referring clients to each other for a fee.
“Whenever there is a referral agreement … a referral fee is paid to the broker, there is a financial agreement” between the two groups that is typical of most referrals,” said Andrew Saunders, president of Bridgehampton-based Saunders, a 25-person firm which was formed at the end of last year.
Peters said the two firms are a good fit because both are smaller, owner-managed luxury brokerages.
“I don’t want to deal with layers of corporate management to get a decision made,” Peters said.
Saunders noted that it’s precisely the small-company focus that will help this new alliance survive the challenging Hamptons market.