A flurry of new condominium closings gave the Corcoran Group a boost during the first quarter of 2016, resulting in a 12 percent jump in sales for the Manhattan brokerage, its parent company Realogy Holdings said Thursday. Still, Realogy posted a net loss of $42 million in the first quarter — up from $32 million during the same period last year — with the conglomerate citing challenges such as a softening luxury market and tightening nationwide inventory of lower-priced product.
“The high end of residential real estate is generally softer and it’s not being offset by growth of lower-priced markets [where] low inventory levels are failing to satisfy strong demand,” Realogy CEO Richard Smith said during the company’s earnings call Thursday. The company’s revenues rose 7 percent year-over-year to $1.1 billion.
Realogy’s NRT division – which owns local brands including Corcoran, Citi Habitats and Sotheby’s International Realty – generated $841 million in revenue, up 6 percent year-over-year.
Smith attributed Corcoran’s first-quarter gains to Corcoran Sunshine Marketing Group, the new development arm of the brokerage that inked $5.6 billion worth of signed contracts in 2015 – double its 2014 volume and its best year ever.
“We market a lot of new product; we think we’re the dominant player in New York City in that regard and we’re getting the benefit of that and Corcoran [Group] also performing quite well,” he said.
Still, there are headwinds ahead when it comes to new construction.
“Development in New York City won’t be as strong in the second quarter as the first,” said Realogy CFO Tony Hull. “So the 12 percent is probably not repeatable.”
Corcoran ranked No. 2 on The Real Deal’s annual residential brokerage ranking, published in the May issue, with 1,128 Manhattan agents and $4.5 billion worth of listings as of March 27. The company sold listings worth $6.13 billion for the 12 months ended Feb. 29.
Its sister company Citi Habitats ranked No. 4 with 671 agents, $86.1 million in listings and $113.5 million in closed sales. But that company is in the midst of a multi-year rebuilding process and has been on an aggressive acquisition spree. This week, it announced it was buying Miron Properties, a 100-agent firm. The deal follows Citi’s acquisition of David Maundrell’s Aptsandlofts.com last year.
Earlier this year, Corcoran said it inked sales contracts worth $21 billion worth of real estate in 2015, a 17 percent year-over-year jump.
As a whole, Realogy saw modest growth when it came to the number of sales nationwide thanks to a trend familiar to New Yorkers: a shortfall of low-end inventory and excess high-end product.
“Like everyone in the industry, we’re challenged by low inventory, but encouraged by demand,” Smith said.