Douglas Elliman snags $50M investor deal

Loan by asset manager Kennedy Lewis adds to firm’s $92M cash, claims board seat

Douglas Elliman Snags $50M Loan From Investor Kennedy Lewis

From left: David Chene from Kennedy Lewis’ David Chene and Douglas Elliman’s Howard Lorber (Photo Illustration by Steven Dilakian for The Real Deal with Getty and YouTube)

Douglas Elliman is boosting its coffers by $50 million. 

The loan comes from asset manager Kennedy Lewis and is aimed at funding “strategic growth and expansion,” the company announced in a press release on Tuesday. 

The funds will add to Elliman’s cash stores, which totaled $92 million at the close of the second quarter. The firm had no debt prior to taking on the loan. 

Elliman has been in cost-cutting mode since high mortgage rates and sparse inventory continued to stall the residential market last year. While the loan is earmarked for growth, a spokesperson for the company said it’s not indicative of a shift in the firm’s strategy. 

“We are always long and short term focused on growth and expansion — while also being focused on running our business with enhanced operational efficiency and productivity,” the spokesperson said in a statement. 

Under the terms, Elliman has until July 2, 2029 to pay back the loan with annual interest rates varying from 7 percent to 8 percent depending on whether the company pays in cash, due each year, or in kind, due twice a year.

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The investment comes with a seat on the company’s board of directors, which will be filled by Kennedy Lewis co-managing partner David Chene. Elliman is also appointing Patrick Bartels Jr., an independent director with Redan Advisors. The two will replace Ronald Kramer and Lynn Mestel. 

The announcement follows a period of financial pressure for the company, including seven consecutive quarterly losses and an eight-figure deal to settle antitrust lawsuits over broker commissions. Elliman finished the first quarter of 2024 with a $42 million net loss and revenue below its year-ago total. 

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But early estimations for the second quarter indicate that Elliman could have a rebound in store. Before auditing, the company expects its gross transaction value to land somewhere between $10.25 billion and $11.25 billion. 

That estimation is significantly higher than the $7.1 billion the company reported in the first quarter, which is typically a slower sales season compared to the second quarter. Elliman posted a gross transaction value just under $10 billion in the second quarter of last year. 

The loan announcement doesn’t appear to have impacted the company’s share price, which hasn’t cracked $2 since March. The firm’s share price was $1.08 as of 12:00 p.m. Tuesday.

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