UPDATED, April 11, 2020, 11:02 a.m.: Oxford Property Group is picking up a 165-agent firm — the latest example of consolidation in New York City’s residential brokerage industry.
Adam Mahfouda’s 525-agent firm closed on the acquisition of Manhattan-based Kian Realty in late March, the companies announced. Combined, the firms could crack the top 10 brokerages in New York City by agent count. Last year, Oxford clocked in at No. 11 by headcount and closed more than $87 million in sell-side deals in Manhattan.
The combined brokerage will operate under Oxford’s name, and will open new offices in Brooklyn and Queens with an expanded salesforce once the health crisis ends.
Oxford in December currently occupies a 10,000-square-foot penthouse at 5 West 37th Street in the Garment District. Many of the firm’s agents work remotely, and are able to choose from two desk rental plans.
The combined firm will retain a 100 percent commission structure with agents paying $495 per month for desk space and access to all databases, or take a 90 percent split for a $99 monthly fee.
Kian, founded by Charlie Doolan and Jae Muk Chung in 2011, focuses on sales and rentals in New York City. It clocked in as the city’s 23rd largest firm by agent count, according to TRD‘s latest ranking of residential firms. The founders, who both declined to comment, have joined Oxford’s management team to lead agent recruitment and training, according to Mahfouda.
Mahfouda said the acquisition was years in the making and had nothing to do with the coronavirus pandemic’s effect on the market so far, nor recent legislative changes that have put pressure on some brokerage’s balance sheets, including a cap on rental applications fees.
Mahfouda said he initially proposed joining forces with Kian three years ago as a cost savings measure and the founders “were receptive but weren’t necessarily interested.” This February, however, Doolan and Chung reached out to start acquisition talks.
“There’s a ton of synergies, a ton of cost savings,” said Mahfouda, noting that both firms had Manhattan offices within blocks of each other. “I think ultimately the agents work at a better company with more support.”
He added that the silver lining of finalizing the acquisition during New York’s stay-at-home order means that many agents and employees have more time to fully undergo the onboarding process.
Oxford’s acquisition of Kian is the most recent in a string of M&A deals and broader consolidation in the residential brokerage space. In January, Realogy firms the Corcoran Group and Citi Habitats merged, while Bond New York acquired 56-agent firm Caliber Associates.
While layoffs have recently hit some of New York’s largest residential brokerages, Mahfouda said Oxford has not let go of any employees or cut any salaries. However, he said the firm trimmed its corporate marketing budget for new ad campaigns targeting agent recruitment as well as pulling a series of taxi ads.
But he said that he believed Oxford was well-positioned to withstand the pandemic, since the company isn’t “carrying massive debts or speculative venture funding.” He added that its operation was already largely remote, with many agents working from home.
Mahfouda said Oxford is now giving seminars on how agents can apply for financial aid and the firm itself is looking into applying for loan programs administered by the Small Business Association. Both relief measures are part of the federal government’s $2 trillion stimulus package.
Mahfouda said that many agents are accustomed to receiving “spotty income,” though he admitted the uncertainty of when the health crisis may end was a concern.
“The question is how long will this continue,” he said. “If it’s six months of house arrest, I think that’s a different story.”
Write to Erin Hudson at [email protected]
UPDATE: This story has been updated to include details of Oxford’s current office location.