While the Corcoran Group — Manhattan’s second-largest residential brokerage — may have seen its listing count drop in the last year, it led the borough in overall residential sales, according to a first-ever ranking of closed transactions by The Real Deal.
Indeed, the firm beat its rivals through its strong grip on the under-$5 million market, according to a TRD analysis of StreetEasy data, which looked at 2012 closed seller-side sales of $1 million or greater.
But while the company closed more sales than any other firm, its smaller rival Brown Harris Stevens bested it — and all other firms — when it came to selling luxury homes of $10 million or more.
The crowded residential brokerage landscape, put under additional pressure last year as listings dried up, closed approximately $13 billion in Manhattan residential sales of $1 million or greater in 2012, the StreetEasy data showed.
Corcoran (including Corcoran Sunshine Marketing Group) represented the sellers in a whopping quarter of all those sales — for a total of $3.1 billion in closed transactions, the figures revealed. (The megafirm, which is led by CEO Pamela Liebman, disputed TRD’s numbers, saying it closed $3.5 billion.)
Next was Douglas Elliman, the private company owned by Howard Lorber and Dottie Herman, with just over $2.4 billion, TRD’s analysis showed. (It claimed to have done $3 billion.) And ranking No. 3 was Brown Harris Stevens, led by President Hall Willkie. The company, owned by Terra Holdings, represented the seller in approximately $2.1 billion in residential transactions.
The same three firms took the three top spots when it came to listing volume during a snapshot this March, though in slightly different order (see related story, “Big firms tackle big obstacles”).
On the closed sales front, there was a sharp drop off after the top three. Sotheby’s International Realty ranked No. 4 with $829 million, followed by Stribling & Associates with $719 million and Halstead Property with $665 million, according to the data. (A source said, however, that Stribling closed $802 million, while Halstead claimed to have completed $712 million in deals.)
TRD reviewed data for more than 30 firms from StreetEasy to come up with its ranking of the top 15 firms. Buyer’s side sales were excluded, as were firms whose main business is representing new development projects.
Sofia Song, vice president of research at StreetEasy, said 2012 was the year that the Manhattan market picked up steam and “moved beyond stagnation.”
“The year was marked by extremely low inventory, the highest number of closings and the highest median price in Manhattan since 2008,” she said.
Corcoran’s ability to close more sales than any other firm in the city last year was achieved by controlling the market for deals between $1 million and $5 million, which, according to TRD’s analysis, was Manhattan’s most active price segment with about $7.8 billion in sales.
Indeed, Corcoran cornered about 28 percent of that slice of the market, with more than $2.2 billion in sales in that category alone.
“We are dominant in several parts of the market. We are happy to sell a $500,000 apartment and a $50 million apartment,” Liebman said. “There are certain companies that prefer to specialize, to brand themselves as strictly high end. [But] I don’t think you have to only do high-end sales in order to be successful.”
BHS’s showing at the top of the market was equally as impressive.
“We sell at all the price ranges,” Willkie claimed. “But we definitely dominate at the high end. We targeted that and we dominate it.”
In that $10 million-and-above segment of the market, BHS was the selling-side brokerage on a third of the $2.2 billion in deals, or $726 million worth of sales. That was far more than the next two firms — Douglas Elliman and Corcoran — which each had about $370 million in closed deals for 2012 in that high-end category.
Compared to the other firms that TRD surveyed, Douglas Elliman, the borough’s largest brokerage, had a more equal distribution between its low-end and high-end deals.
“Our goal is to have market share in all categories,” said Steven James, Douglas Elliman’s president of Manhattan brokerage.
But it’s a constant balancing act.
“On a monthly basis we are looking to see where listings are coming in and see how we stack up against other companies, and where sales come in and how we stack up,” James said.
If he notices the firm is losing share or simply believes it should have more activity in an area, it shifts brokers around or makes a strategic hire in that area, he said.
Some firms, industry executives said, spread their deals among different price points as a deliberate business plan.
Frederick Peters, president of Warburg Realty, said his company tries to sell residential properties in a wide range of prices as a way to create stability for the firm. He said he prefers that strategy over tapping into the rental market.
“We don’t have that kind of [rental] hedge. [So] we have made a strategic decision that we want to be a multi-market player,” Peters said.
(The StreetEasy figures showed that Warburg closed $323.5 million in deals above $1 million in 2012, though the company claimed to have closed $417.9 million.)
Town Residential closed $254 million, according to StreetEasy, but the firm said the correct figure is $316 million.
Most of the firms showed a surprisingly balanced neighborhood distribution of deals, but there were some anomalies.
For example, there were three popular residential neighborhoods in Manhattan that had surprisingly few sales above $1 million recorded by StreetEasy. The Lower East Side and the East Village had only about three dozen such residential property sales in 2012.
Also, a vast swath of the West Side, between 34th and 55th streets and Sixth Avenue and the Hudson River, spanning more than 120 city blocks, had sales above $1 million in fewer than two dozen buildings, although some buildings had multiple sales closed by a variety of brokerages, such as the Orion at 350 West 42nd Street.
In contrast, in one 28-block area between 79th and 86th streets, and Third and Fifth avenues, there were sales above $1 million in approximately 80 buildings.
Song attributed the slow transaction volume in the Downtown East Side neighborhoods to the lack of available for-sale units in 2012 (see “Midtown West, Tribeca, Chelsea rank as Manhattan ‘hoods with steepest inventory plunge”).
“The Lower East Side and East Village neighborhoods don’t have as much product as other areas that would command those prices,” she said.
But again, Corcoran led on the Lower East Side and East Village, with sales in 11 of the three dozen properties. On the slow-moving Far West Side, Corcoran and BHS were particularly active in the two dozen buildings that had closed deals above $1 million.
While most of the firms had a near balance between the closed deals on the East Side and the West Side, Stribling had about three-dozen sales west of Central Park compared with more than 60 east of the park.
During interviews with TRD, firm executives stressed the importance of agent productivity — a strong indicator for how much revenue agents generate for themselves and their firms.
TRD calculated the annual dollar volume by agent to get a sense of who performed best by that metric. However, there are some caveats, most notably that some firms have significant numbers of rental brokers, or brokers who focus heavily on rentals in addition to doing some sales.
For consistency, TRD tallied the figures using the agent counts published in its 2012 top residential brokerage ranking.
In addition, some company executives argued that the rankings don’t provide a full picture of their 2012 closed deal volume. They said the data should have included deals below $1 million, which accounted for more than half the deal volume in Manhattan, as well as buyer-side representation.
Shaun Osher, CEO of CORE, said his company’s deals are typically split equally in representation. (StreetEasy figures showed that the firm closed $148.1 million in 2012 in deals above $1 million, though the company claimed to have done $165.5 million.)
“We generally have a balanced representation between buyers and sellers,” Osher said, noting that his firm didn’t get credit for representing the buyer of the $25 million Rothschild Mansion at 41 East 70th Street.
Meanwhile, data for Nest Seekers International showed that the firm closed $81.8 million in deals, while revealing that Keller Williams NYC closed $69.5 million and Kleier Residential closed $67 million. (Those firms claimed $100 million, $86.1 million and $82.4 million respectively.)
But it was Leslie J. Garfield, which ranked No. 1 on TRD’s boutique survey of listings this year (see related story on page 43), that was far and away the most productive firm by agent. The company, led by Jed Garfield, had just eight brokers in 2012, and successfully stuck with its niche strategy of selling townhouses. That strategy yielded the highest sales volume per agent of nearly $9 million — almost twice any other firm.
“You can’t be all things to all people,” Garfield said. “You want to try and do one thing better.”
BHS was the second-most productive firm at $4.8 million annually per agent, while Sotheby’s clocked in third, at $4.2 million.
Corcoran, meanwhile, had an average of $2.8 million per agent, while Douglas Elliman, which has a robust rental business that reduces the firm’s productivity-per-broker figure, came in at $1.6 million per agent.
Liebman said her firm’s position shows that her agents are active.
“We are known as a pretty tough company. If [agents] are not making their numbers we tend to replace them. This is not a place to park your license and just hang out,” Liebman said.