The partnership is centered on agents referring clients to one another when they’re looking to buy overseas, where a local broker has more in-depth knowledge of the market. While brokers in New York receive a referral fee for sending buyers to agents abroad, sources said the real value of an exclusive affiliation is building a network of trustworthy colleagues to hand off clients to. (Elliman declined to comment on referral fees.)
The international cache of the relationship could also attract more top brokers to Elliman.
In September, the firm made two big hires, luring Lauren Muss away from the Corcoran Group and Brett Miles from Town Residential. Muss said the new partnership was a major factor in her decision to make the jump.
“Everyone knows the Knight Frank brand,” she explained.
Several other local brokerages already have international affiliations. Sotheby’s International Real Estate and Brown Harris Stevens, the exclusive affiliate of Christie’s International Real Estate, are tied to their respective auction houses.
In 2010, meanwhile, Stribling & Associates formed a marketing partnership with Savills, the London-based brokerage that goes toe-to-toe with Knight Frank.
Stribling Vice Chairman Kirk Henckels said Elliman/Knight Frank will be competing globally with Stribling/Savills.
“I wouldn’t call it a threat, but I would call it a competition,” he said. “A friendly competition.”
Success vs. failure
What this new affiliation means for each firm’s share of the international-buyer pool is hard to pin down.
Because of the federal Fair Housing Act, the firms say they do not keep tabs on buyers’ national origins, and in an increasingly global market, it is harder to specify who is an international buyer.
“We don’t break it down that way,” Lorber said when asked what percentage of international buyers Elliman represents. The chairman said his company holds the bulk of the local market share over competitors Corcoran and Brown Harris Stevens, so it figures Elliman has the largest share of international buyers.
BHS, for its part, claims it reps the most international buyers.
BHS said that in 2012, the company repped either the seller or buyer in 34 percent of condos over $10 million and 72 percent over $20 million — just the types of high-end properties international buyers are purchasing. Former Elliman broker Leonard Steinberg, now president of Urban Compass, worked at the company through the initial phases of the relationship with Knight Frank.
“They tried several ways to make it work,” he said. “There were some success stories. Ultimately, what matters most to the consumer is the actual product.”
Steinberg said he thinks some strategic partnerships can have value, while others fail. He cited Insignia Financial Group’s short-term ownership of Elliman in the early 2000s and the former co-branding with Prudential.
“Some work, some didn’t work,” he said. “It remains to be seen how this plays out.”
Correction: An earlier version of this post misspelled the name of Douglas Elliman’s chief operating officer.