In a topsy-turvy world, amid technological disruption and a down market, residential brokers are taking very different roads to making a buck.
Our cover story this month features our annual ranking of the top brokers in Manhattan, who are posting some impressive numbers despite the less forgiving climate for luxury condo deals.
At the top of the list for closed sales was Raphael De Niro, whose team did nearly three-quarters of a billion dollars in a single year — $721.4 million in sell-side deals, to be exact — thanks mostly to new development condo closings from contracts that were signed before the market softened.
Our story, which includes separate rankings for both new development and resales, looks at which of those two categories is more lucrative for brokers today. Though shiny new condos may garner more buzz and command premium prices relative to resales, they’re not necessarily the more lucrative path for sell-side brokers right now. That’s because commissions start lower for new development, while the money gets divvied up among a lot of players, and brokers must often wait years until the units close to receive a check. “If I just focused on new development, I’d be an idiot,” Nest Seekers’ top broker, Ryan Serhant, declared. Check out our analysis starting on page 58.
Meanwhile, a new breed of agents is looking to replace the old guard of the residential brokerage world. A novel way of finding buyers has recently emerged — one that can give even the greenest of brokers a leg up. In a story on page 36, we look at the upstart firms that are pouring tons of money into controversial “lead-gen” platforms, which revolve around strategically buying leads from sites such as Trulia and Zillow’s StreetEasy and generating business through cold calls.
Reporters Kathy Clarke and E.B. Solomont detail the case of Elena Smirnova, who, with only a year in real estate under her belt, joined upstart brokerage LG Fairmont, one of several firms feeding cold-call leads to brokers. Soon enough, a lead handed down by the company turned into a $17 million contract for the penthouse at 25 Mercer Street in Soho. Forget networking and building connections with Wall Street, tech or Hollywood players, and don’t worry about growing your brand through marketing — it may all come down to algorithms today.
“It’s really hard to network your way to survival. It’s not enough to just know a few people in finance,” said Aaron Graf, LG Fairmont’s CEO.
Will this be the way of the real estate agent of the future or just a passing fad? That remains to be seen, but the money going into some of these companies is not to be taken lightly — one brokerage, TripleMint, has raised more than $7 million in venture capital funding so far.
Meanwhile, the battle continues to rage over StreetEasy’s Premier Agent platform, which allows these lead generation companies to purchase prominent placement right next to other agents’ listings, essentially piggybacking off other brokers’ work (page 44.)
On the commercial side of the brokerage business, we look at the fate of the leading investment sales firm in the city — responsible for a whopping $22.9 billion in sales in 2016. Eastdil Secured saw its two star brokers, Doug Harmon and Adam Spies, decamp for rival Cushman & Wakefield last October in the biggest brokerage move in years. But the firm’s longtime CEO, Roy March, is taking a very hands-on approach to keeping the deal flow going. See the story on page 54, and check out a separate Closing interview with March on page 154.
Elsewhere in this issue, we have a profile of investor Joe Sitt, who snapped up more than 20 retail-driven properties on Fifth Avenue and Soho in recent years. Since then, his firm has been facing choppier waters with Manhattan’s luxury retail market in free fall (page 70).
TRD is also ramping up its outer-borough coverage, with a new reporter, Eddie Small, dedicated to the beat alongside our usual crack team of writers. Check out a never-been-done-before data dive on speculative investment in the Bronx (page 90) and a look at the surprisingly strong commercial condo market in Flushing (page 74.)
Enjoy the issue!