When the lights went out at 4:11 p.m. on Aug. 14 in the former offices of Charles H. Greenthal, David M. Michonski didn t miss a beat.
The Chairman and CEO of Coldwell Banker Hunt Kennedy was holed up in a conference room there, talking to Greenthal brokers about the benefits they would be eligible for now that CBHK had purchased part of the company.
Michonski didn t ask why the power was out, and candles were brought in as the meeting continued without interruption. The CEO appeared less concerned about the citywide blackout than about building a bridge to the newly acquired troops.
After the meeting, Michonski appeared ebullient about his company s latest acquisition, the residential sales arm of Greenthal, which includes around 60 brokers.
CBHK beat out Prudential Long Island Realty, which had also been courting Greenthal, in acquiring part of the company for an undisclosed sum, Michonski said.
“Dottie [Herman, CEO of Prudential] was pursuing the company,” said Michonski, saying he had no further details on the matter.
“We decided to pass,” explains Herman. “The numbers didn t make sense.”
William West, who as chairman of the family-owned Charles H. Greenthal Group will retain ownership of the property management arm of the company, said he decided to go with CBHK because he felt there was more “synergy” between the two companies. He expects his property management company, which has been in business for 40 years and has around 200 employees, to work closely with CBHK in the future.
“Other companies sat down and spoke to us,” he said. “We may have gotten offers for more money, but without the synergy being there.”
The newly expanded CBHK will now have 250 agents in five offices, and Michonski said he likes where his firm is competitively situated.
“We re now just shy of $1 billion in sales,” he said. “We think that puts us in the number three or four position, depending on where you place Halstead.” A look at property sales reported in Crain s, however, would put the company closer to sixth largest residential real estate brokerage, behind Terra Holdings (Brown Harris Stevens, Halstead and Feathered Nest), Douglas Elliman, Corcoran, Sotheby s and Bellmarc.
While Michonski said Greenthal brokers are now looking forward to being a part of CBHK, that wasn t the case with some brokers when the deal was first announced on Aug. 7. “Now, they are just so excited,” he said. “But they weren t last week.”
Michonski said a group of eight or so agents led by broker Bonnie Brown voiced concerns in the first days following the deal. “There are definite cultural transition issues,” Michonski acknowledged. “Brokers were part of a boutique firm and now they are part of a national firm there is a definite difference in culture.”
To address concerns, Michonski began holding information sessions three times daily, telling the brokers about CBHK and the company s plans. One selling point is the company s innovative stock option plan for employees, which has been profiled on CNN and is now in its eighth year. Michonski also brought in a transition advisor to help deal with any problems. He said he now expects “no loss of brokers” as a result of the acquisition, though the next few months may be the real test.
CBHK plans to use the former Greenthal office at 555 Madison Ave. as its new headquarters. “We didn t have an office in Midtown before,” Michonski said. “So now, our Manhattan coverage is complete.” Michonski recently relocated to the oldécorner office of Susan Renfrew, president of the Greenthal residential sales arm, who was the only casualty of the acquisition. “There wasn t room
for two presidents,” explains Michonski. From his new office, Michonski noted that he can look down at Dottie Herman s offices at 575 Madison Ave.
The acquisition is another step in the growth of CBHK, which has expanded at an average compound rate of 34 percent since it was founded in 1996. The company got its start when Michonski, who was given the Coldwell Banker franchise rights for Manhattan, teamed up with brokerage Hunt Kennedy, led by JoAnne Kennedy and William Morris Hunt 3d, who are co-presidents of the organization today. CBHK, which started with around 25 brokers, then went on to acquire three other companies before buying Greenthal s residential arm.
Michonski said much of the company s growth has been a result of the referrals it gets from Coldwell Banker offices throughout the nation.
West, of Greenthal, said he was excited by the prospect of a close association between the two companies. “I think the name is a terrific name,” he said, noting that his brother-in-law works for Coldwell Banker in California. “Hopefully, we ll enjoy more management and they ll enjoy more sales, and we ll develop a friendship outside of money.”
West will also join the Board of Directors of RealShare, CBHK s parent company (which Michonski also heads).
West said talks between the two companies had been going on “for a year or so.” West said part of the reason he sold the residential arm was that the division “wasn t as strong as I would have liked it to have been,” and that he had been experiencing high overhead costs relative to revenue.
Michonski said CBHK has annual revenues of around $20 million. He said going from $20 to $40 million in revenue will be an easier climb. “It s like a spaceship,” he said. “It takes an enormous amount of thrust to get off the ground, and then it s less work after that point.”