The Real Deal New York

Elliman’s revenue, profit rise despite housing slowdown

But new development is a drag on year-to-date profit
By E.B. Solomont | November 07, 2018 08:55AM

111 Murray Street, Howard Lorber, and 125 Greenwich Street (Credit: Getty Images)

Despite the sluggish market, Douglas Elliman increased both revenue and profits during the third quarter, the firm’s parent company reported Wednesday.

Vector Group said the New York-based brokerage had revenue of $211.5 million during the third quarter, up from $190.4 million a year ago. The firm also grew its net income to $10 million, up from $4.2 million during 2017’s third quarter.

Chairman and CEO Howard Lorber said the market has “definitely picked up” in New York. “Closings are pretty strong in new development,” he said. “But that’s from sales two or three years ago.”

Still, it’s been a rocky year for Elliman as profitability’s been hurt by the slower market.

According to Vector filings, Douglas Elliman’s net income for the nine months ended September 30 was $7.8 million, compared to $20.8 million a year ago. That’s largely the result of losses early in the year.

Elliman lost $8 million during the first quarter, as a result of the sluggish New York City market and costs associated with acquiring Los Angeles-based Teles. The firm’s second-quarter profits shrunk to $5.9 million from $16.1 million a year earlier thanks to the new development slowdown.

Overall, Vector’s real estate segment — which also includes its new development investment arm, New Valley — lost $900,00 during the first nine months of the year, compared to its $24.7 million in profits during the same time in 2017.

Vector’s overall revenue grew to $513.9 million from last year’s $484.6 million. Net income was $12 million, down from $19.3 million during 2017’s third quarter.