As the Labor Day barbecues broke up and the final jitneys headed back to Manhattan last summer, the Corcoran Group hadn t so much as dipped a toe in the Long Island Sound as it approached the Hamptons real estate market.
Six months and two deals later, Corcoran is among the largest firms on Long Island s East End.
Last month, Corcoran bought Dayton-Halstead, a brokerage with a 98-year history and 44 agents in its three Hamptons offices. Corcoran s acquisition followed recent purchases by Brown Harris Stevens and expansion deals by Prudential Douglas Elliman, which has had a presence there since 1996.
Corcoran now has about 200 agents in 13 offices on the East End, just shy of Dottie Herman s 215 agents in seven offices, according to Prudential s Web site.
Corcoran also now has 13 out of its 23 offices in the Hamptons.
The deal came about in relatively short order, Corcoran president and CEO Pam Liebman said, when she and Dayton-Halstead president Diane Saatchi “struck up a friendship” after Corcoran bought Cook Pony Farm in its first buy in the Hamptons in October.
“We said maybe we should do something together,” Liebman said. “We both made up our minds, and it only took two months for the deal to happen.”
Terms of the deal were not disclosed. Clark Halstead, Halstead s founder and chairman, sold his ownership stake in the company under the terms of the deal.
Dayton-Halstead, which has offices in East Hampton, Bridgehampton and Sag Harbor, did $133 million in closed sales in 2003. Saatchi will now become vice president of sales for the Corcoran Group in the Hamptons.
“It s a great company,” said Liebman. “They ve been around 100 years, and I ve gotten such wonderful feedback about Diane,” who is frequently cited as a real estate authority in the Hamptons.
Herman was not impressed, however, saying independents are a weak and dying breed in the Hamptons and “everyone is for sale for a number.”
“Dayton-Halstead was a little company,” said Herman. “It s inevitable somebody would purchase them. Cook Pony Farm was for sale for five years before they were bought.”
“The Hamptons is done,” she said. “It s all going to be big companies.”
William Lie Zeckendorf, co-chairman of Terra Holdings, parent company of Brown Harris Stevens and Halstead, agreed. “The game is over,” he said.
In January, Terra bought a majority interest in Dunemere Associates, one of the biggest remaining independent firms. Dunemere has five offices and 100 brokers.
“Since we were both Christie s Great Estates affiliates, we couldn t advertise in their market without being a part of them,” acknowledged Zeckendorf. “So it s sort of something we almost had to do.”
Going forward, Zeckendorf said Terra will make a significant investment in the company, which will continue to focus on luxury homes. “We ve never been hesitant to invest in the companies we buy, and the current business plan will take us six months to a year to complete,” he said.
While consolidation is nearly complete, say Zeckendorf and Herman, some notable independent firms do remain. Herman said Allan M. Schneider Associates, which has 180 agents in 11 offices, is “a good company.” Other independents she mentioned were Tina S. Fredericks and Norma Reynolds Realty, each of which has only a handful of agents.
Liebman also said Corcoran might pick up another company in the Hamptons if there is a good fit. “NRT is a very acquisitive company,” she said.
Herman said she welcomed the fact that the Hamptons market seems destined to consist of large brokerages. “It s better for me,” she said. “They are real businesses.”
Herman said a lot of small owners typically make money by earning commissions, as well as by running their own businesses, so running a profitable company isn t necessarily their main focus.
“When I first came out here [in 1996], New York magazine called me a Broker From Another Planet, ” she said. “But it s a bigger playing field now. It s better for the consumer. I think I ve been proved right.”