Forget “Manhattan to Montauk.”
How about “Park Avenue to Palm Beach to Peconic Bay?”
The Corcoran Group is branching out to Palm Beach and the Hamptons in hopes of capturing more buyers in the second home market.
NRT Incorporated, Corcoran s parent company, bought Cook Pony Farm Real Estate in East Hampton and Paulette Koch Real Estate in Palm Beach, Fla.
Both companies signed an agreement last month merging their operations under the leadership of Corcoran. The acquisition of Cook Pony Farm brings to an end a 50-year-old real estate firm, which has 160 agents and 10 offices on both forks of eastern Long Island. A recent report by Suffolk Research Service Inc. showed Cook Pony Farm as having the most sales in the Hamptons during a nine-month period from July 2002 to February. Paulette Koch Real Estate has around 30 agents, and there are plans to expand that number by 20, according to Corcoran CEO Pam Liebman, who added that the new acquisitions will be fully integrated with Corcoran.
“We will have one company, one Web site, one leadership,” she said.
NRT, a unit of Cendant Corp. and the nation s largest real estate brokerage firm, has shown a voracious appetite for acquisitions since its entry into the real estate business in 1995, including the two recent purchases. In the past five years, NRT has acquired 50 firms per year and now is more than twice the size of the next largest residential brokerage, Minneapolis-based HomeServices of America. The company says it now has a hand in one out of every four residential real estate transactions across the nation.
Frederick Peters, president of Warburg Realty Partnership, Ltd., said the recent acquisitions appeared to make sense. “This is a logical extension of the [Corcoran] brand,” he said. “It s logical to extend it to where people from New York are going to be.”
He said Corcoran may have made a move in the Hamptons because of Douglas Elliman, whose reach now stretches to from “Manhattan to Montauk”, as its slogan says, following its merger with Prudential Long Island Realty earlier this year.
“Corcoran and Douglas Elliman have always been obvious competitors, ” said Peters. “With Montauk to Manhattan, Corcoran would want its own franchise.”
But Liebman said the deal had been in the works prior to the Prudential-Douglas Elliman merger.
“We started looking to expand quite a while ago,” she said. “This is about what s going to be best for the consumer.”
The National Association of Realtors reports that the second-home market accounts for nearly $50 billion in sales annually, a fact on which NRT and Corcoran have seized.
“We have found that a significant number of our New York City clients tend to gravitate toward the Hamptons and Palm Beach for their second homes, and in some cases, their third homes,” said Liebman.
Many of those second and third home buyers are baby boomers.
“Over the next 18 years, there will be $10 trillion in wealth transfer to boomers,” from the generation above it, added Bob Becker, president and chief executive officer of NRT. “We are extremely bullish.”
Both Melanie Ross, president and chief executive officer of Cook Pony Farm Real Estate, and Koch of Paulette Koch Real Estate company, will be vice presidents of sales for Corcoran in their respective areas.