The Real Deal New York

Douglas Elliman acquires Vandenberg to boost townhouse business

Boutique firm has $150M in exclusives
By E.B. Solomont | August 14, 2018 01:15PM

From left: Howard Lorber, Jane van den Berg Ordway, and Dexter Guerrieri (Credit: Getty Images, Vandenberg, and iStock)

Douglas Elliman is doubling down on townhouses by acquiring Vandenberg, a boutique firm on the Upper West Side.

Terms of the deal were not disclosed, but Elliman said Vandenberg’s founders and eight agents would make up a new townhouse team at the city’s largest residential brokerage. Vandenberg currently has 16 exclusives asking $150 million, including a “passive” townhouse at 53 West 71st Street, which is asking $13.49 million.

Founded in 1990 by husband-and-wife team Dexter Guerrieri and Jane van den Berg Ordway, Vandenberg has been one of the few remaining independent brokerages in the city, where larger firms have scooped up boutiques over the years.

“We’ve intentionally not joined anybody for all this time,” Guerrieri said.

But with volatility in the townhouse market, he said Vandenberg’s principals lacked the resources to grow their business as quickly as they wanted on their own. “This isn’t something where we got tired or worn out,” Guerrieri said. “There’s actual real dollars it takes to expand.”

At Elliman, Guerrieri and Ordway will lead a townhouse-focused team based out of 1995 Broadway, where they already occupy 4,500 square feet on the ninth floor. (Elliman occupies floors four and five.)

They will retain their brand name — Vandenberg Inc. The Townhouse Experts — which is trademarked.

Elliman Chairman Howard Lorber said post-acquisition, his firm would look to capitalize on business that Vandenberg was missing because it was singularly focused on townhouses. (For example, he said, if Vandenberg encountered a buyer interested in a co-op or condominium, it didn’t have a mechanism for continuing to work with them.) “An affiliation with us [will] just bring in so much more business,” Lorber said.

Elliman — which has 2,350 agents in Manhattan and 7,000 nationwide — has been growing through acquisitions over the past few years. In 2017, it picked up Teles and Otis & Ahearn to expand in Los Angeles and Boston, respectively. In May, Elliman bought the boutique firm Space Marketing Shop to boost its presence in Brooklyn and Queens. (Space sold $500 million worth of real estate since its launch in 2011.)

The townhouse market has been unpredictable in recent years, particularly on the high end where sellers got caught up in the exuberance of the market in 2014 and 2015.

During the first half of the year, townhouse sales volume rose to 224 from 211, according to Leslie J. Garfield, another townhouse-focused firm. The average sales price during the first six months of the year was $7 million, compared to $7.1 million a year prior.

“It’s re-setting,” Lorber said. “There’s a tremendous amount of value in townhouses right now.”

Last week, Elliman’s parent company — Vector Group — said the brokerage’s profits during the second quarter were down thanks to a new development slowdown. During the quarter, Elliman’s revenue rose to $205.6 million, compared to $198.7 million during 2017’s second quarter. Net income was $5.9 million, compared to $16.1 million.