UPDATED, July 18, 3:16 p.m.: On July 10, Douglas Elliman star broker Fredrik Eklund told his 1.1 million Instagram followers he and his family would be moving from New York City to Los Angeles, where the brokerage has eight offices.
“LA has some of the world’s most exciting new development projects coming,” Eklund boasted in his announcement. Within days, more than 90,000 people had liked the post.
But Eklund’s shift to the West Coast comes at a time when Elliman — a juggernaut in New York City — still trails some of its biggest competitors in sales volume in the L.A. area. It also comes as high-end home sales in L.A. have slowed, a combination of “aspirational prices” — which Elliman itself acknowledged — and ample supply spec homes that have been hitting the market.
In October, the team of Eklund — a star on Bravo’s “Million Dollar Listing New York” — and John Gomes expanded into L.A. At the time, it added four agents on the West Coast and now has 64 agents split between New York, L.A, and Miami.
In New York, the Eklund-Gomes team is a force. It closed $721 million in sales last year in Manhattan, Brooklyn and Queens, making it No. 1 in The Real Deal’s annual broker rankings. As of April 15, it had $291.7 million in listings, good for fourth on another TRD ranking. And Eklund himself is now selling a $52.7 million penthouse in the Tulip Building in New York’s Soho neighborhood, as well as a $35 million unit in the West Village.
For that kind of success on the West Coast, Eklund said he had to dedicate his time.
“To be truly successful in L.A., one of us had to spend a lot more time there setting up,” Eklund said in an email response to questions from TRD. “I’m glad to take that role.”
In the beginning
Elliman opened its first office in L.A. in March 2014, at 9440 Santa Monica Boulevard in Beverly Hills. Led by CEO of Western region, Stephen Kotler, the firm has since grown to eight offices in the county, with a total of 453 agents.
In California, it has 19 offices with 723 agents overall.
The company had a total $1.8 billion in closed sales volume for L.A. County in 2018, according to a spokesperson at the firm. The figure does not include off-market deals. That’s a small fraction of its total sales volume nationwide, which was $28.1 billion last year.
As of July 8, the firm had 171 homes on the market for a combined $1.1 billion spread across L.A., according to an analysis of single-family and townhouse listings on the Multiple Listings Service.
That’s about 57 percent less than Compass, which had 850 listings amounting to $2.7 billion in total volume. Hilton & Hyland and the Agency had $2.6 billion and $1.6 billion, respectively.
Elliman is hoping some of the million dollar man’s magic will help boost that volume: Eklund recently secured listing for an $18 million mansion in Beverly Hills. He’s also vying for a $60 million listing in Beverly Park.
“I’m already very, very busy and I don’t take that for granted,” Eklund said in an e-mail. “I don’t mind being the underdog, in fact I like it. But it’s the new development that will set me apart a bit I think. I’m already working on a couple of the best projects out there.”
Elliman’s biggest names in L.A. are the Altman Brothers, the only team in the city to have their own office.
Josh and Matt Altman, who appear on “Million Dollar Listing Los Angeles,” were also the only Elliman team to crack The Real Deal’s ranking of top brokers this year. They came in eighth place, pulling in $236.1 million off 23.5 deal sides in 2018.
The brothers also ranked as the top team in L.A. during Elliman’s annual awards celebration, dubbed “The Ellies.” Josh Altman, regarding Eklund’s move to L.A., “happy to have him in our territory.” But he added, “as far as anyone in the business being intimidated, last time I checked sharks are the top of the food chain…”
While Eklund said he plans to “take it slow” in L.A., he ultimately wants to have what he has in New York — a 10,000-square-foot office for his team alone. But, “that takes time and patience,” he wrote. “I have a lot of people to meet and a lot to learn in California.”
Other top teams in L.A. include Pugh Tomasi & Associates, Ernie Carswell and Associates, the Chad Lund Team and Tracy Tutor Team, according to Elliman’s ranking by top gross commission.
Elliman has scored some big listings in recent months. Connie Blankenship is listing the Park Bel Air development site for $150 million. The Altman Brothers are selling a Holmby Hills mansion for $78 million and Stefani Stolper is looking for a buyer for Muhammad Ali’s former Hancock Park estate. That’s on the market for $17 million.
Going vertical
Elliman has made a recent push to expand its new development offerings, to include luxury rentals. “Vertical living is finally happening” in L.A., Eklund wrote in his July 10 Instagram post.
Jim Jacobson heads Douglas Elliman Development Marketing division in L.A, which includes 20 people.
In the fall, the team will begin leasing Astéras Kings, a 25-unit project that’s being built in West Hollywood by developer Astéras. Leasing for the one and two-bedroom units starts at around $5,500.
A rendering of the Astéras Kings development
Jacobson said the division has been partnering with developers on for-sale projects for several years, making it easier to facilitate efforts on rental projects developers may be working.
And in an “adjusting” market, it also presents a way for the firm to protect itself against any decline in sales.
“If we can be successful in high-end rentals, and continue to grow that side of our business and our portfolio, we can weather the storm,” Jacobson said. “Whether that’s rentals on the high-end side, or when the market flips back again and we’re killing it on the for-sale side, we can straddle both lines very easily.”
Moving wealthy Angelenos to high-rises hasn’t exactly been easy, however. In Downtown Los Angeles, there’s a glut of multifamily units that are still on the market, sitting vacant as thousands of units are being built nearby.
Jacobson said some of the biggest challenges in selling high-rise buildings comes with educating the buyer that “this is the new wave of homeownership.” His team is also selective about the projects they partner with, picking developments they know they can sell.
In addition to Asteras, the development team is also selling condos at the West Hollywood Edition, built by Witkoff Group and New Valley Group. New Valley is run by Howard Lorber, chairman of Elliman. In the past, it sold Tower 1 at Greenland Group’s Metropolis project.
A rendering of the 8899 Beverly project
Eklund’s team will partner with Jacobson’s team to sell Townscape Partners’ under-construction condo project at 8899 Beverly. The upscale complex, designed by Olson Kundig, is slated to have 48 residential units, according to a representative for the project.
Eklund declined to comment on specifics, but had little doubts about its success.
This is the “best new project in L.A,” he said.