Big Small Firms

Boutiques thrive by carving out specialty niches to compete with industry behemoths

Michele Kleier likes to differentiate her company, Gumley Haft Kleier, from her larger competitors by drawing a comparison from the world of retail. Department stores may have a large selection, but sometimes you get lost amidst the shuffle and a boutique would be a better bet.

“A lot of people don t like to shop at Macy s,” said Kleier. “They d rather go to a store like Ralph Lauren where they offer you Perrier and more personal service.”

Kleier has made a career being the one there with the Perrier, and it has won her famous clients like John Travolta, Neil Diamond, Warren Beatty and Billy Joel. She started her own firm in 1989, which is now at 40 brokers, but still small enough that “I know every deal that is going on,” Kleier said.

More than mere numbers though, being among the best small to mid-sized boutique residential firms in the city is about filling a niche, whether it be focusing on luxury property, in the case of Edward Lee Cave, or in making the 789 townhouse buildings in Manhattan the entire focus of your business, as in the case of Leslie J. Garfield & Co. The Real Deal looks at the top firms with under 50 agents in a separate feature story, “Best of the Boutiques”.

At Garfield & Co., the limited number of townhouses means that Jed Garfield, son of owner Leslie, knows most properties cold. “People are always slightly taken aback when they call up and ask about a specific address,” says Jed. “I ll say, oh, that s Mr. Smith s place. People are surprised. But there s not that many buildings to cover.” The company has eight agents, mostly family members.

For broker Alice Mason, a legend who is known for her discretion in dealing with old-money clients, the specialty is bringing her 40-plus years in the business to work to help clients get into the right co-op. Mason, who outside of work is known for her dinner parties over the decades that have drawn the Clintons and other past Democratic Presidents, said the specialized knowledge of co-op boards she possesses is in short supply today.

“Anyone can sell a condo or house,” she said. “But most brokers don t understand [co-ops] at all.” Mason, who runs a 15-broker shop, said the situation is getting worse, with some of today s larger competitors having a view of housing “like it was commercial real estate.” But she is non-plussed. “This will always be a co-op city. Anything that is a co-op will never be a condo. Fifth Avenue is all taken up.”

Elsewhere, Corcoran CEO Pam Liebman has predicted the demise of two of the city s most prestigious small firms because she says big business will replace “chatting at a dinner party.” The statement has rankled some small firm owners. Most observers at bigger companies also say that isn t the case at all.

“I think there will always be a market for small boutiques,” said David Michonski, the Chairman and CEO of Coldwell Banker Hunt Kennedy, “There is always going to be room for specialization in the marketplace.”

Douglas Wagner, president of Manhattan brokerage firm Benjamin James Associates, Inc. said he ultimately expects a few large firms competiting with hundreds of smaller firms.

In the past, it s been the same situation big companies existing side by side with boutique firms, according to Phyliss Koch, another legendary broker. Koch started a company bearing her name 33 years ago. “There was no Corcoran,” she said. “But there was Ashforth Warburg, William B. May and Douglas Elliman. We started small and made our niche without any problem.”

Today the company has around 12 agents with offices on the Upper West Side, and does deals mostly on the Upper West and Upper East Side.

As far as the notion of big business being more important that social connections, Mason said that “anyone can learn real estate.” One of the most important thing for those who come to work for Mason is the fact that they already have a “netowrk” in place, she said. Former employees of Mason include Barbara Fox, who now heads her own 40-broker residential firm, Fox Residential Group, which started in 1989 by targeting upscale properties on the Upper East and Upper West Side, but now, like Gumley Haft Kleier, targets properties “across the board.”

Elsewhere in residential real estate in New York, niches abound for companies who have come up with innovative business models.

Sign Up for the undefined Newsletter

Perhaps nobody has done a better job than Massey Knakal Realty Services. The company, which specializes in finding buyers for small, mostly residential buildings under $20 million, was formed when Bob Knakal, who received his undergraduate degree from the Wharton School at the University of Pennsylvania, hooked up with Paul Massey Jr., a Colgate graduate, when both worked for Coldwell Banker Commercial after college.

The duo dealt with small building owners on the Upper East Side at CB. Seeing that the the small property market was underserved and that owners didn t care about the CB name, they resolved to strike out on their own in 1988.

Nobody followed. The company, which now has around 31 agents, has already completed some $400 million in transactions this year, and currently has exclusive listings totaling $1.3 billion, Knakal said. Typical transactions include sales of single family townhouses and apartment buildings with retail on the ground floor.

Another notable niche player in Manhattan residential real estate, on a completely different front, is Gil Neary, who started DG Neary back in 1988 in Chelsea. An authority on the neighborhood, it s also one of the only residential real estate companies in New York that explicitly caters to the gay community.

Neary says the 20-broker company being identified that way helps draw clients. “People looking for an apartment would rather have someone comfortable with their personal business. It s a very personal thing, pulling one s financial pants down before a co-op board.”

Other notables that have also successfully carved out niches include companies like Goodstein Realty, which takes a broad, family-centered approach to addressing clients real estate needs. Brokers build their practice more like a doctor or lawyer would, catering to real estate needs throughout the lifetime of a family, said President Lenny Bayer. The company runs age-specific programs like Goodstein Realty Senior Lifestyles, which helps relocate seniors to independent and assisted living facilities.

Prudential Douglas Elliman appeared to take a page out of the Goodstein playbook recently when it announced it had joined forces with SeniorBridge Family, a national, in-home eldercare provider, to better serve older adults and their families facing relocation challenges.

Barkin & Associates, which caters to the entertainment community, and Susan Penzner Real Estate, a pioneer in Soho in the 1970s, are two other firms with distinct niches.

Being the proprietor of a small firm, Neary said , “it always seems like you are struggling to keep your head above water.”

One obstacle he said he faces is the fact that bigger firms have more money to spend on advertising.

But Kleier said her company takes out “more advertising per exclusive” than Corcoran or Douglas Elliman.

Fox said that technology “is the big equalizer between large and small firms,” though a look on the Internet shows some of the smaller firms have rather rudimentary Web sites. Kleier said the New York Times website, where everyone looks for listings, “equals the playing field for everyone.” Neary sees good news in the fact that Manhattan is “closer than ever to having shared listings.”

Working at a small company also has advantages. Neary notes that brokers are often people who value their independence and don t like too many rules. At the big companies, he thinks it is “much more formalized, with rules about how people are expected to perform.”

“I think personal relationships are more important than big fancy names,” he said. “For some people, the name is more important.”

Recommended For You