The entrepreneur has had something of a moment lately, with both Presidential campaigns heaping praise on small businesses in addition to self-employment looking increasingly attractive after the corporate bankruptcies and mass layoffs spurred by the economic crisis.
But before you think Silicon Valley has cornered the market on entrepreneurial whiz kids, take a look closer to home: New York City real estate has seen a bevy of new residential firms in recent years.
Opening a real estate firm requires relatively little capital, and in the past 10 years, online listing portals (such as OnLine Residential and StreetEasy), smartphones and search engines have made it easier than ever to open an office and get just as much exposure as brand-name brokerages. Around a decade ago, a batch of new Manhattan residential brokerages appeared and has since proved they could take on the city’s established players. This wave of entrepreneurs included Core’s Shaun Osher, Bond New York’s Bruno Ricciotti and Noah Freedman, the Modlin Group’s Adam Modlin, Rapid Realty’s Anthony Lolli, Nest Seekers International’s Eddie Shapiro and aptsandlofts.com’s David Maundrell.
Maundrell, 38, started aptsandlofts
.com in a 550-square-foot office in an industrial section of Williamsburg in late 2002 with just $8,000 of savings while also suffering from credit card debt. Last year, the firm had the second-highest number of new development projects in the city, according to The Real Deal’s 2011 ranking. The firm now has about 60 agents, Maundrell said, and last month opened its second office, a 43-desk space in Cobble Hill, Brooklyn.
Likewise, Shapiro, 37, founded Nest Seekers in a tiny office in 2002, using computers he bought off eBay for $200 each and enlisting a computer programmer to ensure a steady stream of traffic to the firm’s website. With 11 offices and more than 400 agents spread across New York City and the Hamptons, the firm is one of the largest residential brokerages in Manhattan and on the East End.
But now, a new generation of young New York City brokers is attempting to follow in the footsteps of these pioneers, starting their own residential firms and ushering in a different approach to the business of marketing homes.
This month, TRD looked at the under-40 entrepreneurs who’ve recently founded their own residential firms and have proven that they are more than a flash in the pan.
Many of the young executives we’ve spotlighted here share certain traits: They opened in unproven neighborhoods, such as Williamsburg or the Financial District; they balked at christening their firms with their own surnames; they built websites that were just as important as their brick-and-mortar offices; and they bristled at what they saw as the “stuffy” corporate cultures of the city’s established firms.
Miron Properties founder Jeff Schleider, for example, started his own company in part because there was “no place that you could go into work in jeans and still expect a high level of professionalism from the people around you,” he said.
Not all young executives or new firms made our list. Some are making waves in the brokerage world through an affiliation with a larger firm. For example, Ilan Bracha opened the Manhattan franchise of the Texas-based Keller Williams in 2011. And last month, Donald Trump opened a residential brokerage Trump International Realty, installing his three children — Donald Jr., Eric and Ivanka — in senior executive positions.
While many of those on TRD’s list have small firms, they are growing — expanding their agent rosters and offices, building relationships with developers and marketing pricier listings.
“Usually, innovation comes not from the biggest, but the smaller, more creative firm that can really experiment with new things,” said Rubicon Property CEO and cofounder Jason Haber.
Waterfall mansion
Andrew Barrocas
The Ad Man
Andrew Barrocas, MNS
If you’ve seen the ad, you can probably quote the tagline: “I don’t remember his name, but his apartment …” The risqué campaign, which debuted in August 2011, is the brainchild of the in-house marketing team at MNS, the brokerage created out of the 2009 merger of the Real Estate Group New York and the Developers Group, which were founded in 2005 and 2003, respectively.
“We’re more than happy to go out on the edge and try things that are new, that are memorable, that have a personality to them,” said Andrew Barrocas, 33, who became CEO of MNS in 2010.
An MNS campaign for the Edge condominiums in Williamsburg winked at the neighborhood’s gritty past (“Grit meets glamour”), while another cheekily boasted of a new development’s larger unit sizes (“Ours is bigger than yours”).
MNS campaigns sometimes result in baffled calls from Barrocas’s mother, he said, but the ads have helped sell units faster and fetch higher prices than the competition. He claimed the Edge’s marketing campaign added $200 per square foot to the building’s sales prices.
The Edge
A former Citi Habitats agent, Barrocas left after that firm was sold in 2004, and then helped launch the Real Estate Group New York, which focused on resales and rentals in Manhattan. The Brooklyn-based Developers Group, cofounded by Highlyann Krasnow, specialized in new developments, so a merger was natural, Barrocas said. Krasnow is now a partner in MNS and heads up the new development division.
Rechristened MNS — a short, memorable name, Barrocas said — in 2011, the firm now has about 100 agents in Manhattan and Brooklyn and is poised to open its fourth location, an on-site office at the Edge.
Barrocas said he always wanted to follow in the footsteps of his father, a self-employed garment manufacturer, and open his own business.
“You go to work in a large company and one day, at 50-something-years old, you get a knock on the door and they’re replacing you with someone who’s a 10th of the cost,” Barrocas said.
Luckily, “I didn’t have to wait until I was 40 years old to be steering the ship,” he said.
Jason Haber
The Charity Case
Jason Haber, Rubicon Property
Haber, 35, has never shied away from voicing his principles. In his twenties, Haber ran unsuccessfully for New York City Council and worked on the campaign to elect Scott Stringer as Manhattan Borough President.
Then, as a young broker at Douglas Elliman, Haber grabbed headlines by refusing to rent an Upper East Side apartment to the now-deceased Libyan dictator Muammar Gaddafi. Accolades poured in from around the country (one admirer in Texas offered to send Haber a gun) and convinced the young broker that his private real estate career could further his public sector ideals.
“I don’t have to be the richest dude on the street, I just want to help people,” Haber said. “And I can do that through real estate.”
Along with his brother Cory, Haber opened Rubicon’s first office in 2010 at 14 Wall Street, followed this past April by a 500-square-foot storefront at 451 Columbus Avenue. From its founding, Rubicon has partnered with the nonprofit called charity: water to bring clean drinking water to developing countries. The firm sponsors a rig that digs water wells across Ethiopia and every 90 days donates $5,000 — the cost of a well.
Although Haber acknowledges that many clients are indifferent to the firm’s charity work, it has served to differentiate the fledging company in a field crowded with other start-ups.
Early on, Rubicon won the exclusive listing for a pair of townhouses priced at $14.3 million at 123-125 East 10th Street because the sellers, Kathy Cerick and Charles Fitzgerald, are supporters of wetlands conservation. One of the townhouses sold to investment banker Olivier Sarkozy, the half brother of former French president Nicolas Sarkozy. Olivier now lives there with his girlfriend, actress/fashion mogul Mary-Kate Olsen. And Cerick is now a Rubicon agent herself.
Rubicon now has 20 agents, about nine of them full-time.
The Dapper Deal makers
Blu Realty founders
The five founders of Blu Realty — Alon Chadad, 27; Moshe Balalo, 28; Michael Arcos, 32; David Tobon, 34; and Andy Kim, 41 — met while working together at Nest Seekers International.
In early 2011, they decided to start their own firm, employing one of the new high-commission-split business models that have become popular in Manhattan in recent years. Agents at Blu Realty start out with a 70 percent split; later, they can qualify for an 85 percent split.
Despite its unconventional commission-split model, Blu maintains a hands-on approach with agents, and is in some ways more old-fashioned than its fellow start-ups. As at Nest Seekers, agents must follow a dress code, and the firm’s founders are known for posing for pictures in matching outfits. Plus, every piece of marketing must be approved by the company to cultivate a professional image.
“A lot of people have lost the respect for the business, in my opinion,” Chadad said. “It’s not just making the deal, it’s how you make the deal.”
With 64 agents and two offices (at 1674 Broadway in Midtown and Trump Place at 120 Riverside Boulevard), the firm has recently started nabbing pricier listings, including a 15 Central Park West rental priced at $59,000 per month and a townhouse at 170 East 80th Street on the market for $31 million. Before Blu got the townhouse listing, the property was marketed by Brown Harris Stevens super broker Paula Del Nunzio.
A $16.5 million listing at 200 Chambers Street marketed by Platinum Properties
Jeffrey Schleider
The Google Guru
Jeff Schleider, Miron Properties
Can Google’s business philosophy apply to real estate? To 33-year-old Schleider, the answer is yes.
A former Corcoran Group agent, Schleider launched his own company in 2009 and frequently cites Google maxims — which include “Focus on the user and all else will follow,” and “You can be serious without a suit”— as inspiration for the way he runs his firm.
From the start, he embraced a notion familiar to the Internet generation, as well as media companies, tech giants and, increasingly, real estate firms: Give away information for free, and a certain percentage of users will come back as customers.
For example, Miron’s social media marketing has attracted some 2,400 Twitter followers, a comparatively high number for the firm’s size, and its blog posts are often armed with quirky content. (A sample headline from January reads: “Questions to ask before signing a lease: Does it look like I’m walking into a crack den?”)
Schleider cultivates a start-up-like feel in the offices, where music plays, agents battle each other on the foosball table and many clients come from the tech world. (In fact, last month the brokerage challenged TRD to a foosball showdown.)
In the last two years, Miron has grown to 52 agents and has three offices: one in Noho, one in Greenpoint and another in Tenafly, N.J.
“We have our quirks and we embrace them — as opposed to trying to pretend to be just the corporate entities that everyone else is,” Schleider said.
Eric Benaim
The Outer-Borough Mayor
Eric Benaim, Modern Spaces
Eric Benaim, 34, boasts that his nickname is “the Mayor of Long Island City” and that half the people who live in the up-and-coming Queens neighborhood are there because of him. The Queens native moved there in 2006, and opened the Long Island City–based Modern Spaces two years later.
In addition to its two locations in Long Island City, the firm now has branches in Astoria and Williamsburg and is in the midst of construction on an office in Chelsea, its first Manhattan location.
Before opening Modern Spaces, Benaim was working for Nest Seekers in Long Island City, but he was unsatisfied. Rather than join a competitor, Benaim opted to start his own company, with the goal of running a more youthful and less bureaucratic operation, where the only dress code was (and still is) a prohibition against suits.
Benaim said he invested about $500,000 — cobbled together from savings, credit cards, second mortgages and family loans — in the new company, about half of which went to the website, which relies on a sparse, gallerylike aesthetic.
“That was our image — how we wanted to portray ourselves as a young, cool, edgy company,” Benaim said. The company’s Williamsburg office — which is shared with the coffee shop Sweetleaf — features graffiti-themed art, a wooden railing reclaimed from an old courthouse and a pillar decorated like a column from the Bedford L-train stop.
Modern Spaces now has about 50 agents and hopes to double that number by next spring, he said. The firm is currently marketing the 48-unit Vista condos in Long Island City, where Benaim said the first eight units sold in one day. Since opening, the company has marketed $500 million in new developments, Benaim said.
Platinum Properties cofounders, from left: Dezireh Eyn, Khashy Eyn and Daniel Hedaya
The youngster
Khashy Eyn, Platinum Properties
When the three cofounders of Platinum Properties — Khashy Eyn, 31; his sister, Dezireh Eyn, 28; and his friend, Daniel Hedaya, 26 — opened their first office on Wall Street, their overhead costs included one unexpected item. To get clients to visit their office, the three young brokers routinely had to pay for taxis to the neighborhood, which was then considered an undesirable residential location.
These days, New Yorkers are less wary of the Financial District, but Platinum Properties still likes to see itself as catering to the new, the young and the hip.
Last year, the firm opened an office in Midtown West, another commercial neighborhood poised to welcome a wave of residential development.
Platinum ranked No. 9 on TRD’s list of top boutique firms in June, thanks largely to the $16.5 million listing for the penthouse at 200 Chambers Street.
In 2008, the firm started a two-agent office in Paris. The company also operates a property management division that specializes in managing investors’ single-home investment properties.
The brokerage’s offerings tend to appeal to younger buyers, the founders said. “If they walk into our office, they can relate to us,” Khashy said. He estimated that the average age of Platinum’s 65 agents is under 30, and the firm’s office at 30 Wall Street features prints by blockbuster artist Takashi Murakami and a beaded black chandelier.
The three founders were working at residential brokerage Urban Sanctuary when the energetic Khashy hatched a plan to launch a new company. “It was just a matter of time,” Hedaya said. “Khashy’s an entrepreneur. He’s always had that vision.”
Although Khashy conceded that he could make more money as an individual agent, he said that down the line, the start-up approach is designed to pay off.
“Your sweat and tears and blood are going into something that’s yours,” Hedaya added.
Where are the women?
Young entrepreneurs are making a mark on New York City’s residential real estate industry, but there is a curious gender disparity when it comes to the founders of new firms, sources noted.
In decades past, women like Barbara Corcoran, Elizabeth Stribling and Barbara Fox made names for themselves by launching eponymous brokerages. Likewise, Diane Ramirez helped launch Halstead Property with Clark Halstead, and Michele Kleier cofounded Kleier Residential (formerly Gumley Haft Kleier).
To this day, a number of Manhattan’s biggest and oldest firms have women at the helm. Consider Dottie Herman, CEO of Douglas Elliman; Kathryn Korte, CEO of Sotheby’s International Realty; and Pam Liebman, CEO of the Corcoran Group. In addition, Stribling, Ramirez and Kleier continue to head up their firms.
And unlike male-dominated fields such as finance or law — where the majority of bankers and attorneys continue to be men — plenty of residential real estate agents are women, including many of the city’s top brokers. (New York’s Department of State does not compile data on the gender of licensed agents.)
Despite all this, the majority of new real estate firms are being launched by men.
Some newer firms were started by women: Dezireh Eyn cofounded Platinum Properties, Highlyann Krasnow cofounded one of the two firms that became MNS, Adina Azarian opened rental firm Adina Equities about a decade ago and Kathy Braddock cofounded Rutenberg Realty with Paul Purcell in 2006. But when it comes to the executives launching the newest generation of firms, the list is heavy on testosterone.
The reason for this, some speculated, could lie with broader demographic changes to the industry.
In decades past, the majority of New York City residential brokers were women, many of whom entered the field because the flexible hours made it easier to work outside the home while raising children.
“It gave a woman the flexibility to either be a more ‘traditional’ wife, stay-at-home mom or whatever … and still be able to create the jewelry money or the school tuition or the vacation money,” Braddock said.
While both men and women still choose real estate for the flexibility, New York City real estate prices have grown by leaps and bounds over the past 20 years. Meanwhile, reality shows cast the job in a glamorous light, and technological advances have taken the business round-the-clock.
The field now attracts ambitious young people of both genders, who view it as a lucrative alternative to a career in law, technology or finance, insiders said.
It may be that these shifts have altered real estate demographics, causing the gender breakdown at the executive level to more closely resemble the rest of the business world, where male heads of firms vastly outnumber their female counterparts. (Among the CEOs of Fortune 500 companies, only 20 are women.)
“There’s no reason the real estate business should look different on the face of it than any business in America,” Braddock said. “If it did, I think that would be more unusual.”