In early 2022, Tim Gullicksen was one of the top-producing agents at Corcoran Global Living and had no idea that his firm was on the verge of collapse.
The San Francisco agent was just coming off his best year ever and had been enjoying the new educational and marketing offerings available since his longtime independent brokerage, Zephyr Real Estate, had joined Corcoran’s first major franchise in early 2020.
But as interest rates rose dramatically, his pool of listings and buyers was also shrinking dramatically, and he was growing bored by a second year of mostly working from home. Then, in June, he got, as he put it, “some mealy-mouth kind of email” from “higher ups” at Corcoran Global Living.
It unceremoniously relayed that his Pacific Heights office was closing and half the staff was being laid off at the end of that month. For Gullicksen, the notice was the grand finale in “a bad news parade.”
What Gullicksen and the rest of the Northern California agents didn’t know was that their local management had been trying to shield them from concerns around financial improprieties at Global Living — improprieties that would soon become public knowledge when several lawsuits alleging fraud and breach of contract were filed against former Global Living CEO Michael Mahon.
More than that, the Northern California leadership would soon begin secretly working on the new locals-only group that would rise from Global Living’s ashes: Corcoran Icon Properties.
Too big, too fast
In the beginning, Global Living seemed like a godsend for the independent agencies that contributed to the hot growth streak that lasted from its founding in late January 2020 until it dissolved at the end of 2022.
San Francisco-based Zephyr had been looking for a larger collaborator, and Global Living seemed like a perfect match, said former Zephyr President and Global Living Regional President Randall Kostick, adding that he was “always very impressed by the Corcoran brand” and had read one of founder Barbara Corcoran’s books.
Zephyr and Lake Tahoe specialists Oliver Luxury Real Estate were the first two to join, he said, with other independents signing on “consistently,” even up until the last few months of Global Living’s existence.
At the time, Corcoran President and CEO Pam Liebman called the launch of Global Living a “huge first step in our franchise ambitions” in a company blog post, giving the brand a foothold in California and Nevada with 13 offices, 450 agents and $2.6 billion in annual sales.
Soon there were also affiliates in Southern California, as well as Northern and Southern Nevada and Ohio. Kostick described 2021 as a banner year, when he and the other leadership didn’t know there was anything to be concerned about.
That lasted until well into 2022, when “the wheels fell off the bus.”
“I’m convinced that the company was growing too quickly and taking on too much,” he said.
“It’s a tough enough job. I don’t need bad vibes. It was clear to me. It wasn’t even close. I was going to stay with Corcoran.”
Because the litigation is ongoing, Kostick couldn’t give details, but he said that “financial issues around commissions not being paid to agents and around vendors not getting paid on time” were the kinds of things that “piqued my concern and the concern of others” in mid-2022.
Three months after that, he said, “It was clear that our suspicions were well-founded and that we needed to start doing some planning.”
There were brief discussions among the leadership about going back to being independent companies, but Kostick said they didn’t last long.
Instead of going their separate ways, the bulk of the former owners of the eight independent firms that made up the Northern California contingent of Global Living quickly agreed to birth a new franchise with Corcoran, which is itself a subsidiary of Anywhere Real Estate. Even though some leaders were still “a little bit shocked” by the end of Global Living, Kostick said, they eventually rallied to make the transition as a team.
“Our conclusion was that we were going to be able to do this and that we wanted to do it together,” he said.
Corcoran announced it was ending its franchise agreement with Global Living in December 2022, not long after the suits against Mahon were filed.
Just days later, Corcoran Icon was officially up and running.
Out of the ashes
Corcoran President and CEO Pam Liebman declined to answer questions related to Global Living, but she said she was “thrilled” the Northern California leadership found “a lot of value in our brand and our culture.” The lack of attrition during the transition to Icon “speaks volumes about who they are,” she added.
The Icon leadership is the only former Global Living group to create a new franchise with the company, the Anywhere subsidiary confirmed, and it is still its largest franchise by agent count.
“When the Northern California leadership team decided to reemerge as a new franchise, it was always their intention to stay with Corcoran,” Liebman said via email.
“It ensured continuity for their agents and staff as well — they could rely on the same services and tools they were comfortable using. It made the transition as seamless as possible for their valued agents and nearly unrecognizable for their clients.”
Kostick said that keeping the rollout as smooth as possible for agents was one of his main goals and that most clients barely noticed the new company name.
Marin County-based Corcoran Icon agent Yasmine McGrane said that “communication from leadership and the resulting media shed light on the scenario” with Global Living’s dissolution, but she didn’t see any major impact on her day-to-day business.
As a new agent who joined Corcoran Global Living shortly after getting her license in 2021, she appreciated the maintained connection with Corcoran, as the name “was important for me to jump-start my business and add consumer credibility to my services.”
100% local leadership
Affirming to agents that they would continue to get all the educational and marketing benefits of being part of Corcoran while also being “100% locally owned, 100% locally managed and operated” was the key reason the firm lost only a handful of its 900 agents in the first three months after the transition, Kostick said.
“The decision-making at that time was pretty removed from the agents,” he said of the Global Living period. “And the promise we made when we started the Northern California collective is that there will be no decision-making made, except from the people that you already know,” he said.
All 27 owners of Icon are, like Kostick, heads of former local independent companies. Together, the agencies cover the greater Bay Area, Humboldt County and Calaveras County. Oliver Luxury Real Estate is based out of Reno, not Northern California, and, given the geographic difference, the firm decided to move in another direction during Icon’s formation, according to a spokesperson for Corcoran.
With Kostick as CEO, Steve Belluomini, former president of Peninsula-based Thrive Real Estate, came aboard as president. Former Zephyr leaders Matt Borland and Melody Foster are Icon’s COO and chief marketing officer, respectively.
“Trying to create a company in that short of a time frame was certainly one of the most stressful things I’ve ever done in my life and I hope to never have to repeat it”
Gullicksen said that one of the things that irked him about the way the office closure was handled was that it was so antithetical to the up-close-and-personal way Zephyr had been run.
“I used to tell other agents that when I go to the sales meeting on Wednesday morning, the men and women who own this company are standing at the front of the room. They are available to you. If you don’t like a new form or procedure, you can ask them why it’s there,” he said of his Zephyr days.
Despite the uncertainty around the unexpected transition, Gullicksen said that sticking with Corcoran Icon was preferable to his options in other firms.
Sotheby’s and Christie’s are too formal, Coldwell Banker too corporate and Compass has “the verve of a cult,”he said. Side’s grow-your-own-business mantra didn’t resonate with him as an agent in his 50s with more than enough referrals. He found some of the local independents unprofessional.
“It’s a tough enough job. I don’t need bad vibes,” he said. “It was clear to me. It wasn’t even close. I was going to stay with Corcoran.”
From survival to smart growth
Just over a year later, Kostick said he sometimes can’t believe that a group of local leaders put together a new franchise in just three months while also dealing with the implosion of the local real estate market.
“Trying to create a company in that short of a time frame was certainly one of the most stressful things I’ve ever done in my life, and I hope to never have to repeat it,” he said.
Making things more difficult, he said, the company didn’t have updated financial and operational reporting as things “started falling apart at Global Living,” so it didn’t know how to budget and prepare for 2023. Leaders had to go through some “cost cutting exercises” and figure out how to enhance revenue and recruitment to make it through that first daunting year.
Kostick credited both financial and decision-making support from Corcoran when putting together the new franchise agreement as one reason the company has succeeded, and he said it was far less tricky than figuring out other aspects of the business, like the transfer of licenses, new banking and insurance relationships, staffing considerations in the midst of a broader real estate downturn and the quick rollout of new marketing materials and signage.
But Icon now feels more financially stable, he said, and it has a year’s worth of data to guide it in the future.
“Instead of looking at what it takes to operate in your first year and what it takes to survive one of the worst real estate markets in modern times, how do we plan to improve?” he said. “How do we plan to capitalize and get bigger and stronger than we are?”
Hoping to learn from Global Living’s too big, too fast growth, Kostick pledged to stay within Northern California. Last year, Icon opened a smaller satellite office on Union Street in San Francisco, as well as two in Marin County, and it brought in a 40-agent independent team from the South Bay.
Kostick said he’s been pitching small independents — who are having “a terribly rough time of it” during the downturn — on “coming in from the cold to an operation that is stable and working towards the future.”
“These times of stressful transition in the marketplace and in the economy are times of opportunity,” he said, estimating that Icon recruited 160 new agents in 2023. Data analyzed by The Real Deal show the fledgling company is already one of the top five San Francisco agencies, with $835 million in sales volume and 542 deals between March 2022 and March 2023.
Some of the former Global Living agents have moved on, he said, “but that’s life in the brokerage business.”
Gullicksen said he isn’t going anywhere and he’s been glad to see some of the old Zephyr traditions return, like an upcoming trivia night and a recent auction where agents could use Corcoran Icons — which used to be called Zephyr Bucks — earned by attending trainings or making sales to bid on items.
“Going through all the closures and changes isn’t fun, but it felt good to say, ‘Okay, now we’re Icons.’ We’re settled on an identity, professionally, and now we can get back to the business of hopefully selling real estate but also having a nice work environment,” he said.
“This is our home and this is our place and these are our people.”