Created from the merger of two independent residential brokerages, the newly formed RNP Realty Group is now setting its sights on what it believes will be an increasing piece of the market: distressed sales.
Veteran Coldwell Banker broker Frank DeNovi confirmed to The Real Deal he is moving over to RNP with his team of four brokers. DeNovi said he’s handled $1 billion in deals in his 30 years as a distressed sales expert.
With some forecasts predicting a downturn in the local housing market, the move positions RNP better capture what DeNovi and the brokerage’s owners believe will be a large part of the market moving forward.
“We’re prepping for what’s coming down the line,” said Grigory Pekarsky, who founded RNP with partners Brad Robbins and Scott Newman. “It’s about staying alive in an ever-changing market.”
The local housing market ended 2018 in a slump, with December home sale figures decreasing by 16.5 percent year-over-year. Chicago is expected to have the weakest housing market in the country this year, though some local experts believe the reality is more complicated than that.
Nationwide, foreclosures in 2018 where at their lowest point since 2005, with about 625,000 foreclosures recorded last year. But DeNovi said distressed sales are likely to pick back up in a market downturn.
“It’s not like 2007, when I was closing on 400 properties a year,” said DeNovi, 68. “But there’s been a big change.”
The distressed sales business has changed from the peak-recession days, DeNovi said. It’s no longer the starter-home, lower end of the market that is seeing distressed sales. Now it’s the upper end of the market that’s having problems, he said.
Luxury sales were up in the Chicago area in 2018, but higher-end homes are not seeing the price growth they have previously. And as their owners reach retirement age, some are realizing they won’t recoup their investment, DeNovi said.
“I have a lot of properties in Highland Park and Winnetka that I never used to have,” DeNovi said. “The properties haven’t recovered in their value. They can’t get out what they put in.”
For RNP, acquiring DeNovi and his distressed-sales team will help the new brokerage grow even as the market hits a bump, Pekarsky said.
“Whenever conventional sales drop, distressed sales go up,” he said. “It’s all about being recession-proof and having a really good pulse on the market.”
Pekarsky and partner Brad Robbins merged their Vesta Preferred Realty with Scott Newman’s Newman Realty to form RNP in October. The goal was to diversify their business while also working to become a top brokerage in the city, Pekarsky said.
The Wicker Park-based brokerage has 20 agents. It will open an Arlington Heights office for DeNovi on Thursday.
After 20 years at Coldwell Banker, DeNovi said he decided to move to the new brokerage because of the changing nature of the real estate business. The market is changing, and the traditional brokerage model is under pressure from technology-focused companies like Redfin.
DeNovi said he wanted to move to a firm that can more nimbly change with the times, at least compared to the giants on the industry, he said.
“The big shops, it takes a while for them to turn the ship around,” DeNovi said. “A boutique operation can turn so much quicker.”