In 2021, some of New York City’s biggest brokerages carefully eyed an even bigger stage.
Compass, Side and Douglas Elliman decided it was time to go for a ride on the public side, with Compass getting first dibs with its IPO in April. The other two brokerages kept busy on the sidelines, with Side building its valuation past $2.5 billion and Douglas Elliman spinning off of parent company Vector Group.
While Elliman was stepping out on its own, Warburg Realty was preparing itself for life under a new leader. In October, Realogy’s Coldwell Banker acquired one of the city’s last independent brokerages. The new firm is slated to debut in 2022 as Coldwell Banker Warburg.
Other leaders decided it was time to step away from all the action. Brown Harris Stevens saw some of its longtime industry leaders step down, including Halstead co-founder Diane Ramirez and former BHS NYC president Richard Grossman.
Before the new year begins, here’s a deeper dive into this year’s biggest brokerage stories:
Compass launches IPO with high expectations
(Compass/Instagram)
When the bell rang on April 1, it was official: Tech savvy brokerage Compass had gone public. Valued at $7 billion, the company notched the biggest brokerage IPO of the year, having received massive financial support from major investors like SoftBank.
Compass’ stock was priced at $18 per share (30 percent lower than its original target) but agents told The Real Deal they were wildly optimistic, comparing the brokerage to a young Amazon or Apple.
The months that followed told a different story. Time and time again, Compass stock tumbled, with shares hitting all-time lows two months in a row. The brokerage also reported a $100 million loss in the third quarter, as expenses increased by 53 percent year-over-year. SoftBank is holding on for the rocky ride: As of Sept. 30, the investor hasn’t reduced its stake in the brokerage.
Top Brown Harris Stevens executives head for the exit
Diane Ramirez of Brown Harris Stevens
This year also saw the exodus of not one, but two big names at Brown Harris Stevens. Just one year after the brokerage merged with its sister company Halstead, the latter’s co-founder Diane Ramirez stepped down from her position as executive chairman and senior adviser. Ramirez said it was “time for a change,” which appeared to involve moving to Berkshire HomeServices as chief strategy officer.
Just a few months after Ramirez’s departure, BHS’ New York regional president Richard Grossman also announced plans to leave in favor of exploring other career opportunities outside of New York real estate. The industry veteran joined San Francisco-based mobile brokerage Avenue 8 to take on the role of president of brokerage for eastern states from New York to Florida.
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Side saddles up for an IPO
Guy Gal (Getty Images)
While Compass finds its legs as a public company, white-label brokerage Side is just gearing up to enter the ring. This year was good to Side, which had its valuation soar to $2.5 billion after a funding round with investors such as Tiger Global Management.
However, the firm is still fairly new, and some agents are skeptical of its unique model, which relies on few agents and a variety of technology tools. Whether or not Side can convince suspicious minds as it moves into the New York City market makes it a definite one to watch in the new year.
Coldwell Banker acquires Warburg Realty, one of NYC’s last indie firms
Frederick Peters, CEO of Warburg Realty; Clelia Peters, president of Warburg Realty; Ryan Gorman, CEO of Coldwell Banker (Warburg Realty, Coldwell Banker)
Realogy-owned Coldwell Banker’s October purchase of Warburg Realty caused quite the shakeup in leadership. Former Warburg CEO Frederick Peters, the self-proclaimed “last man standing” at the helm of a New York City independent residential brokerage, will instead report to Coldwell Banker CEO Ryan Gorman. Former Warburg president Clelia Peters left to focus on proptech investing, which she’s dabbled with since joining Bain Capital Ventures in February 2020.
Some of the brokerage’s top talent also headed for the exit. Jason Haber, Allison Chiaramonte and Tania Isacoff Friedland all ditched the brokerage for Compass less than a month after the deal was done, though they said the acquisition had nothing to do with their decision. Veteran executive Stephen Klym, who re-joined Warburg from Brown Harris Stevens in April, decided to bounce back to BHS not long after the announcement.
Douglas Elliman spins off from Vector Group
Richard Lampen and Howard Lorber
Rounding out the list of public newcomers in 2021 was Douglas Elliman, which announced its plans to spin off from conglomerate Vector Group in November. The revenue surge triggered by the booming housing market was a big reason for Elliman’s decision to leave the nest, with Vector CEO Howard Lorber saying the firm was in a good position to “succeed in the market as a standalone company.” On Dec. 30, the company began trading on the New York Stock Exchange under the ticker DOUG.
Erin Hudson contributed reporting.