Ilan Bracha has left the building.
The co-founder of Keller Williams NYC sold the struggling Manhattan brokerage, The Real Deal has learned. The move caps several tumultuous years filled with agent defections, a revolving door of leaders and a $2 million lawsuit over unpaid rent.
Bracha and his business partner, Haim Binstock, transferred ownership of the brokerage to Austin-based Keller Williams Realty International, which then awarded the company to Richard Amato, who owns several other Keller Williams offices in Nassau County. KWRI confirmed the sale to TRD.
The financial terms of the deal were not available.
In conjunction with the sale, Amato plans to consolidate Keller Williams’ two Manhattan outposts, in Midtown and Tribeca, which were run as separate businesses. The merged entity, Keller Williams New York City, will be run by Mark Chin, who was CEO of Keller Williams Tribeca.
“We’re unifying all of the Manhattan brokerage under this new brand,” Chin said, acknowledging that having two companies was confusing to many. “Even StreetEasy couldn’t tell the difference between us.”
Beyond office efficiencies, however, Chin’s top focus is on hiring productive agents and growing the brokerage in New York. Combined, the firm has 350 Manhattan agents, down from 900 at its peak in 2018.
Chin said Keller Williams pays agents 100 percent commission after they reach a certain threshold, which means it makes more money by having more agents. “In two years, if I’m at 500 agents, I will consider that to be a failure,” he said. “Something close to 1,000 would be a home run.”
Chin said he plans to get there by bringing small- and medium-sized firms onto the Keller Williams platform. The value proposition to them, he said, is the ability to keep their brand and business, but utilize technology from Keller Williams and take part in the firm’s profit-sharing program.
“This is now a technology business,” he said. “For those owners, being part of Keller Williams is a better long-term proposition than running your own brokerage or selling to someone else who doesn’t have the tech stack.”
In addition to selling the brokerage, Bracha and Binstock transferred their ownership stake in Keller Williams’ Manhattan territory, one of 30 to 40 regions that KWRI operates nationwide. Chin said the owners of Keller Williams’ tri-state region, which has 9,000 agents, purchased Bracha and Binstock’s shares. Michael Brand, the tri-state region’s regional director, now will add Manhattan to his portfolio.
“We’re going to grow Keller Williams in New York City to a whole new level,” said Darryl Frost, a spokesman for KWRI, the largest franchise company in the U.S. with 169,317 agents and $351.2 billion in 2019 sales. “By consolidating the offices, we’ll be able to better support our agents and clients and bring those efficiencies under one roof.”
In a statement, Bracha said he was “proud to have introduced and grown the Keller Williams NYC brand.” To date, he said it closed $6 billion in sales. As for his next move, he said he would be focusing on his real estate business. He also plans to pursue a “number of opportunities” related to establishing a new real estate platform.
Bracha and Binstock, who are partners in real estate investment firm B+B Investment Group, launched the Midtown firm in 2011. They opened a 29,000-square-foot office at 1155 Sixth Avenue in 2015 to house a growing brokerage with around $1 million in annual profits. (They also opened Keller Williams Tribeca that year.)
But trouble hit in 2018 after a period of rapid growth, followed by a slowdown in the residential market. The firm cycled through several leaders as agents fled to other firms. In April 2018, KWRI sent a letter of default to the Midtown brokerage.
In 2019, Bracha described an effort to restructure and right-size after the firm grew too big, too fast by hiring unproductive agents.
In August, the franchise relocated to a WeWork location at 575 Fifth Avenue in an attempt to minimize expenses. Nonetheless, Dow Jones sued Keller Williams Midtown in January for $2.36 million in unpaid rent and damages.
Chin didn’t weigh in on Bracha’s alleged financial mismanagement of the firm, but said:
“I think rumors of his insolvency are greatly overstated. What I do realize is he stopped wanting to invest much money into the brokerage.”
According to Chin, Keller Williams New York City planned to move out of its Tribeca office, at 377-379 Broadway, which is owned by Bracha and Binstock. The company is actively searching for new space in Midtown, and Chin anticipates opening locations Downtown and Upper Manhattan “in fairly short order.”