Resilience and rebound were Howard Lorber’s themes as he announced Douglas Elliman’s performance for the final quarter of 2020.
“We’re feeling very good about New York at this particular time,” said Lorber, Elliman’s executive chairman and CEO of its parent, Vector Group, on the latter’s fourth quarter earnings call. “It definitely stabilized.”
The city’s sluggish sales market, which historically accounts for about 70 percent of Elliman’s revenues, had been dragging down the firm’s business since the onset of the pandemic even as sales surged in Florida and the Hamptons.
But last quarter, transaction volume in the city improved, particularly in new-development condominiums.
That helped Elliman report net income of $14 million for the fourth quarter, up from the year-ago period’s net loss of $432,000 and a third-quarter profit of $12 million. The firm’s sales revenue last quarter was up 50 percent year-over-year to $267.5 million from $178.1 million in the final quarter of 2019.
The strong finish did not make up for the heavy losses the firm incurred in the early months of the pandemic when it began slashing costs and wrote down $58.3 million in goodwill related to Elliman’s trademark.
Elliman reported a net loss of $48.2 million for the year. In 2019 the brokerage had net income of $6.2 million. But the firm’s 2020 revenue of $774 million nearly matched the $784.1 million in 2019.
Lorber credited the results to early cost-cutting on the corporate side and Elliman’s 6,700-agent workforce. He also cited recruitment of rainmaker brokers during the pandemic as part of Elliman’s strategy to make up for lost time in New York City.
“We really have a good position. We managed during this time to recruit some new people to the company, substantial brokers,” Lorber said on the call.
Recent Elliman hires include Compass broker Kirsten Jordan, whom Lorber publicly welcomed earlier this month. A source said the reference was to another top New York City-based agent slated to join Elliman from a major competitor.
Overall, Vector’s fourth quarter revenue from its real estate and tobacco businesses was $554.6 million, up from $439.6 million in 2019. Net income surged to $32.3 million from $10.7 million.
Vector’s annual revenue rose to $2 billion from $1.9 billion in 2019. Net income dropped to $92.9 million from $101 million.
Vector’s real estate segment, New Valley, which includes Elliman as well as a new-development investment arm, reported a net loss of $5 million in the fourth quarter, an improvement over the net loss of $24.9 million a year earlier. New Valley’s net loss for 2020 was $75.9 million, compared to a net loss of $11.4 million in 2019.