Manhattan’s top firms

The largest brokerages get pricier listings, more agents

Town Residential founder Andrew Heiberger (left) and Core founder Shaun Osher (right)

Manhattan’s residential brokerage heavyweights are seeing the benefits of a recovering market, it seems.

Almost across the board, Manhattan’s largest residential firms have retained agents or added to their ranks since last year, according to The Real Deal’s annual ranking of Manhattan’s largest firms. And while the overall number of listings has dipped by 1.5 percent, the dollar value of those listings has shot up nearly 12 percent, to almost $13.4 billion.

When it comes to dollar volume of listings, the same five firms continue to dominate the upper echelons, with the Corcoran Group once again snagging the No. 1 spot with just over $3.5 billion worth of properties for sale, about on par with last year.

But the next four firms — Prudential Douglas Elliman, Brown Harris Stevens, Sotheby’s International Realty and Halstead Property — are gaining ground. All four have seen double-digit growth in the dollar volume of their listings since last year. According to TRD’s data, gathered through Online Residential in early May, the value of Sotheby’s listings jumped 24 percent to $1.47 billion. (Sotheby’s said the total was closer to $1.8 billion.)

The firm’s median listing price of nearly $2.5 million also grew 25 percent from last year, landing the luxury-focused firm its fourth consecutive No. 1 ranking in this category. Stribling & Associates and Brown Harris Stevens followed, with median listing prices of $1.8 million and $1.74 million, respectively.

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But in an upset, newcomer Town Residential took the fourth spot, with a median listing price of $1.19 million — no doubt buoyed by a bevy of trophy properties, such as Italian construction scion Valerio Morabito’s $33 million Upper East Side townhouse and Town founder Andrew Heiberger’s own Lenox Hill home, on the market for $18.5 million. Another fast-growing firm, Nest Seekers International, nearly doubled its dollar volume of listings, to $252 million.

For The Real Deal’s ranking of boutique firms, where Core took the top spot for brokerages with the highest dollar volume of listings, click here.

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With Manhattan residential real estate stabilizing in the last few months, sellers have started testing the upper limit of asking prices, brokers said. But the improvement also stems from the strong luxury market, which has skewed the dollar value of listings across the borough.

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Additionally, some pricey new condo projects are now hitting the market, after several years when new product was scarce.

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“A good deal of it is the superior [and well-built] new condo product that’s coming on, and getting good price per square footage,” said Diane Ramirez, the president of Halstead, which saw its dollar volume grow by 23 percent compared to last year, hitting $845 million. The firm, which has 600 agents, also renovated its Park Avenue flagship to accommodate more desks.

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Still, while properties on the market may be pricier, there are fewer of them to go around. Some buyers are still loath to put their homes up for sale, and the amount of new condos is still far lower than during the boom. “We’ve got a serious inventory issue of there just not being a lot of new product coming,” Ramirez said.

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For a second year, Corcoran clocked the highest number of listings of any firm with 1,508 properties for sale; still, that’s a 16.9 percent drop from last year. (Corcoran disputed TRD’s total, saying it had 1,630 listings.) In the No. 2 spot, Elliman had 1,494 listings, a 13.2 percent increase (though the firm had said TRD’s 2011 figure was too low).

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What little product there is sells fast, brokers said.

“One of the big differences this year is [that] everything is selling and moving really, really quickly,” said Bruno Ricciotti, cofounder of Bond New York, which had 42 sales listings, up from 34 last year. (About 350 of the firm’s 515 agents handle rentals, Ricciotti noted.)

“Right now, literally, I can’t keep something on the market more than a week or two if it’s priced right,” he added.

Of all the firms in the ranking, Citi Habitats had the biggest drop in listings volume. The firm saw the number of its sales listings drop to 140, a 38.6 percent decline that knocked the 627-agent juggernaut down three spots on the listings ranking to No. 9.

While the firm is known for its rental business, Citi Habitats president Gary Malin said he’s just as focused as ever on sales. The plunge in listings, he said, was influenced by the timing of TRD’s data collection, since the firm’s properties are moving quickly. Bellmarc Realty also dropped one spot to No. 8, which firm cofounder Neil Binder attributed to “an unusual, high flurry of product” that sold in the last few months.

The bigger the better?

The shortage of new inventory comes as Manhattan’s largest firms have, for the most part, expanded, continuing a trend from last year. According to some brokers, that’s because the larger firms have an edge when it comes to recruiting talent in today’s market; it’s difficult for small firms to compete with the resources and name recognition of the big companies.

“What you are seeing is a flight to quality, or a flight to the resources,” said Heiberger, an industry veteran who started Town in late 2010. With financial backing from Joe Sitt of Thor Equities, Town has lured brokers with perks like health insurance reimbursement and concierge services for agents.

Manhattan’s dozen largest firms have a total 6,565 agents this year, while the 12 firms that ranked largest last year had a total of 6,159 agents.

This growth is also evident in the size of the smallest firm on the list: This year, it is the 198-agent Sotheby’s.  Last year, by contrast, it was Warburg Realty, which had 129 agents in 2011 and has since dropped off the list. (For this reason, TRD did not tally the firm’s listings, although Warburg is still a major player in the Manhattan market. The firm’s president, Frederick Peters, was not available for comment.)

Meanwhile, rapidly growing Keller Williams NYC, which Ilan Bracha launched in early 2011, failed to earn a spot on the list of Manhattan’s biggest brokerages, despite growing to 174 agents since opening.

Another quickly expanding firm is Rapid Realty, the brokerage founded in Brooklyn by Anthony Lolli. Most of Rapid Realty’s agents and offices, which are independently owned franchises, are in the outer boroughs.

To be sure, not every firm has added brokers in the past year, and the seven largest firms are ranked in the same order as in 2011.

Elliman and Corcoran, which have claimed the top two spots since TRD started its ranking in 2004, are both about the same size as they were a year ago, with 1,516 and 1,131 agents, respectively.

Citi Habitats and Stribling saw the biggest drop in size. Stribling shrank 9.7 percent to 213 agents, while Citi Habitats slid 6.8 percent to 627.

Malin attributed the change to natural fluctuations in the number of agents at the firm. Stribling’s Elizabeth Stribling declined to comment on personnel or business matters at her privately held firm.

Bellmarc also saw a 4 percent drop in size, to 242 agents, although Binder said a handful of his agents are not featured on the firm’s website and thus didn’t show up in the ranking.

He also said he’s not concerned with adding agents unless the market warrants new hires. “I don’t just open the doors and let anyone who can chew gum and walk come in,” he said.

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Last year, sources told TRD that the New England–based William Raveis Real Estate was preparing to acquire Bellmarc. But Binder said that, in fact, he had been negotiating with the brokerage to purchase the share of Bellmarc that belongs to cofounder Marc Broxmeyer, who had retired the year before.

Those talks fell apart, but Binder is still shopping a 33 percent stake in the firm, preferably to a real estate player who can bring more value to Bellmarc than just the purchase price, he said.

Bellmarc is also moving its second-floor office at 1015 Madison Avenue at 78th Street to a ground-floor storefront on Lexington Avenue and 81st Street.

For other brokerages, growth has slowed since the 2010 to 2011 period, when many brought on new agents to replace the ones they lost during the housing crash and recession.

Bond, which replaced Brown Harris Stevens as Manhattan’s fifth-largest brokerage last year, added 57 agents between 2011 and 2012, compared to 102 agents in the previous year.

Likewise, Rutenberg Realty — which grew 37.7 percent between 2010 and 2011 — slowed its rate of growth to 4.9 percent in the past year. The 468-agent brokerage landed in the No. 6 spot for the second year in a row.

Adding agents is central to the success of Rutenberg, which operates with a high-commission-split model and brings in revenues with monthly fees and transaction fees from agents. But cofounder Kathy Braddock said she was not worried about the slower rate of growth.

“If we were up and down and up and down and all over the place, I would be nervous,” she said, adding that next year she anticipates the firm will break the 500-agent mark.

Fast growers

Two firms that adhere to a more traditional model grew by leaps and bounds.

Nest Seekers expanded by 47 percent to 308 agents and jumped two spots to No. 8. The firm has benefited from executive vice president Ryan Serhant’s transformation into a reality television celebrity. As a cast member on Bravo’s “Million Dollar Listing New York,” which was recently picked up for a second season, Serhant has generated an uncommon amount of publicity for Nest Seekers.

Ravi Gulivindala, a managing director who oversees training and recruiting at Nest Seekers, estimated that about 20 percent of the firm’s new agents have come on board since MDLNY episodes started airing in March. He said the show, which also features Elliman brokers Fredrik Eklund and Michael Lorber, has brought cachet to the industry.

“It’s like Wall Street was a number of years ago,” Gulivindala said. “Now, Wall Street — there’s a certain disdain for that.”

In contrast, he added, “real estate is sexy.”

The 10-year-old brokerage has parlayed the increased exposure into pricier listings, according to TRD’s research. The dollar volume of the firm’s listings has jumped 90.1 percent in the last year to $252 million, even as its number of listings fell 13.1 percent to 86.

The sparse number of listings is the result of brisk sales at the firm, as well as the lack of new residential development, said Gulivindala. Two new projects about to hit the market — one on the border of Gramercy Park and another on Manhattan Avenue in Harlem — will add an additional $36 million worth of listings to the firm’s total, he said.

In September, Nest Seekers opened a new 30-agent office on the Upper West Side, followed by an expansion into Williamsburg. And last month, the firm tapped Serhant to head up a new 2,000-square-foot Tribeca location, which will accommodate up to 35 desks when construction is completed.

“I think they’ve gotten their name out there more,” Elliman CEO Dottie Herman said of Nest Seekers. “Will they hit the next level? I really couldn’t tell you.”

One spot below Nest Seekers, Town made its debut on the list at No. 9, with 268 agents.

After bursting onto the scene in December 2010, Town quickly made a mark with high-profile hires, including Brown Harris Stevens’s Wendy Maitland and Elliman’s Robert Dvorin.

Since then, the company has opened six Manhattan offices and, as of the middle of last month, Heiberger said the firm employed 345 people. He expects to reach a capacity of 400 agents and staff by the end of 2012.

“There’s no single reason for all of Town’s success, but I think that it’s an accumulation, a culmination of many factors,” Heiberger said, citing the company’s branding and marketing strategies, high-end office facilities and experienced team.

While cynics note that the circumstances of Town’s growth are unique — the result of exceptionally deep pockets that could afford to pay for top talent in the early days — there’s no denying the firm has made an impressive debut on TRD’s rankings.

Last year, Heiberger told TRD that the firm had almost $200 million in exclusives. This year, with 174 listings worth just over $502 million, Town has more agents with listings over $10 million than the much-larger Halstead and the luxury-focused Stribling.

The firm also has an average of 0.65 listings per agent, putting it in the middle of the pack by that metric.

Though Town had a strong showing, Heiberger’s rivals said the company has not poached their listings or agents en masse.

Halstead’s Ramirez, for example, said her agent count had not been significantly impacted by the arrival of Town or fellow newcomer Keller Williams. But, she added with a laugh, “I say that knocking on wood in a way.”

Elliman’s Herman acknowledged that Town is a “contender,” but said it remains to be seen whether the firm will succeed in the long term.

“I know what it costs to do what they did,” Herman said, referring to her own experience launching the forerunner of Elliman. “They have to make that money back for their investors.”

When Bracha started Manhattan’s other high-profile newcomer, Keller Williams NYC, he had the lofty objective of growing to 250 agents in the first year. But the firm, a local franchise of the Texas-based Keller Williams Realty, currently only has 174 agents, which makes it Manhattan’s 13th biggest firm according to TRD’s data.

Bracha acknowledged that his 250-agent goal was ambitious, but he maintained that he could easily hire dozens more agents if he were less selective.

To some, the Keller Williams business model — where agents start off by earning a 70 percent commission split and receive monetary rewards for bringing on new agents — is still confusing. And the firm’s reputation as a collection of inexperienced agents flanking Bracha’s top-producing team persists, sources said.

Is Keller Williams “getting the agents that they would like to get?” wondered Braddock, who also faced similar skepticism when she launched Rutenberg with Paul Purcell. “Will they hit that mark? Perhaps. I don’t know.”

But Bracha emphasized some new additions to his team, like Trump Sales and Leasing’s Rana Hunter Williams, who came on board in February to launch a luxury division, as well as Elliman’s Michael Shapot and his six-person team.

By TRD’s count, Keller Williams NYC has 87 listings totaling $196 million.

Keller Williams NYC recently launched a rental division, and in December opened a 25,000-square-foot flagship office at 425 Park Avenue, which Bracha said he intends to expand by 10,000 square feet.

“What we’re creating here is something that when we grow, we will grow so strong, it will be a huge impact on the market,” Bracha said.