Can virtual brokerage eXp make NYC a reality?

Wash.-based firm has 18K agents, twice as many as last year. But New York will be its toughest test.
By E.B. Solomont | May 16, 2019 04:00PM

eXp Realty CEO Glenn Sanford (Credit: iStock)

eXp Realty CEO Glenn Sanford (Credit: iStock)

There’s the dream of making it in New York as a residential firm: the sky-high commissions, the near-celebrity status and elevated lifestyle. And then there’s the reality: most firms fail here, and fail hard.

But that isn’t stopping eXp Realty, a virtual brokerage that is one of the industry’s fastest-growing firms, from giving it a shot.

The Bellingham, Wash.-based company plans to launch in New York City in June, the company confirmed. On April 16 and 17 at the Park Lane Hotel, it held two pre-launch infosessions titled “eXp Realty: NYC Rising.”

“It would be kind of silly not to be here,” said Kim Canavan, a Keller Williams alum who is eXp’s designated managing broker for New York State. exP also hired Corcoran Group alum Matt Parrella to head up its operations in New York City.

The firm, founded in 2009 by CEO Glenn Sanford, now has nearly 18,000 agents nationwide, up a whopping 94 percent year-over-year. Its growth comes at a time when traditional firms are struggling with profitability and agent retention. The cloud-based eXp — which does not operate any brick-and-mortar locations — has been offering agents high commission splits, revenue-sharing and stock options.

Among those joining its ranks were several top-producing agents, including many from Keller Williams, such as David Devoe, an agent in Hoboken who moved 32 agents and 10 staffers to eXp earlier this year.

For New York licensing purposes, Canavan said eXp will have three designated branches — located in Regus offices — in Midtown, the Financial District and Downtown Brooklyn. Canavan and Parrella declined to say how many agents they are looking to bring on. “We want it to be sustainable and to bring on quality people,” Parrella said.

Few national brands have been able to successfully infiltrate New York. Five years after launching a Manhattan office and hiring senior Douglas Elliman executives to run it, William Raveis does not have significant market share, and Christie’s International Real Estate has also struggled to attract top agents. Keller Williams NYC has weathered the loss of agents and a leadership shakeup in the past year.

Although eXp’s agent headcount has exploded over the past two years, it’s unclear how much market share it commands in each city.

According to a report from the research firm Real Trends, firms like Coldwell Banker, Sotheby’s, Keller Williams and Compass still control many large metro markets like Los Angeles and South Florida. In New York City, Elliman and Corcoran are the giants; the firms closed $28.1 billion and $19.3 billion in 2018 sales respectively, Real Trends found.

But compared to traditional rivals — which have been reporting losses — eXp’s recent financial results have been heartening. It generated $14.5 million in gross profits during the first quarter of 2019 — up 132 percent year-over-year. Revenue rose 153 percent to $157 million, with a net loss of $6.3 million (down from $10.7 million).