Prudential Douglas Elliman brokers Meir “Mickey” Roth and Lenny Sporn have left the brokerage giant to start a new firm.
Roth and Sporn, formerly partners in the Roth-Sporn Group, parted ways with Elliman two weeks ago and are in the process of launching Park River Properties, which will focus on organizing international buyers into purchase groups for new development condominium units.
The new company, temporarily headquartered at 117 East 57th Street, is slated to formally launch in January, Roth told The Real Deal by telephone today. The company currently has three employees in addition to Roth and Sporn, including two based in Israel, where they expect to recruit most of their buyers at first, he said.
“This is a unique concept and something we’re very excited about,” Roth said, adding that a couple members of Elliman’s Roth-Sporn group, which previously had four members, have joined the venture.
Roth and Sporn, both Israel natives, met as agents at Citi Habitats. Six years ago they moved to Elliman, and by 2007, the Roth-Sporn Group was Elliman’s fifth-highest grossing sales team. That year, the two decided to join forces with Ilan Bracha to create a 15-agent super group. In 2008, that group had the most transactions of any at Elliman. But the partnership was short-lived, and in November 2008, Roth and Sporn parted ways with Bracha.
Now, they’ve left Elliman completely, which Roth said was necessary to pursue their vision.
“It would have been much more complicated to do it with Douglas Elliman,” said Roth, formerly an executive vice president at Elliman. He added: “We really loved working there. It was a great company.”
Park River Properties is based on the concept of purchase groups, which are very common in Israel but rare here, Roth said. The idea is that Park River will find a number of international homebuyers interested in purchasing condos in New York, and then negotiate a group price for them with the developer of a new building. Unlike a bulk sale, where an investor purchases a large number of units at a deep discount, each of the apartments will be sold to individuals, who will use them as a pied-a-terre or rent them out, Roth explained. But because they are buying as a group, Park River will be able to negotiate a better price than if they had bought individually.
“We’re basically organized end-users,” Roth said. “It’s like buying at a wholesale club compared to buying at a regular supermarket.”
While developers often avoid bulk purchases because banks won’t underwrite mortgages in buildings where too many units are owned by one investor, purchase groups don’t have that effect because each unit is owned individually, Roth said.
“This is not something that is going to hurt the building,” he said.
Park River will also help buyers obtain financing through Israeli banks, Roth said.
He felt the time was right for the venture because “the prices in New York started to become attractive to foreign buyers,” he said, especially with favorable exchange rates. While the venture will first focus on Israeli buyers, “we are working to establish the same concept in other countries,” he said, including Germany and parts of South America.
He said he and Sporn are in the process of approaching New York developers about group purchases.
“Every developer we’ve talked to is very open to it,” he said, but noted that he could not cite any by name. The developments they are interested in must have specific qualities, he noted; international buyers, many of whom are investors, often look for different qualities than local buyers. First, the buyers must be easily able to rent the units, Roth said, and are often looking for amenity-rich buildings in Midtown and other locations that are close to tourist sites.
Roth said he and Sporn will continue to work on individual deals at Park River Properties, and expect to announce several new developments the company is representing.
Roth said he is still working with several of the clients he had at Elliman. For example, the duo is continuing to market 55 sponsor units at 370 East 76th Street as a $26 million bulk purchase.
Dottie Herman, president and CEO of Elliman, was not immediately available to comment on the Roth-Sporn Group’s departure.
“They’re good guys who have worked very hard for several years,” said Tamir Shemesh, a managing director at Elliman. “They believe they found a niche.”
When asked if the venture is likely to succeed, Shemesh said: “They have been successful throughout the years, so I don’t see a reason why they wouldn’t be successful now. But it depends on the market.”