Douglas Elliman sold $24.6 billion worth of real estate nationwide in 2016 — a 9.8 percent year-over-year jump, as the pricey contracts signed during the market’s peak turned into closings.
In New York City, the residential firm turned out higher revenue after closing fewer — but pricier — deals, parent company Vector Group reported Wednesday. Elliman closed 6,812 sales worth $14 billion in New York in 2016, compared to 7,119 deals worth $12.7 billion in 2015.
For the 12 months ended Dec. 31, Elliman’s revenue jumped 6 percent to $675.3 million, with Vector CEO Howard Lorber, who also serves as chair of Elliman, saying that the firm’s investments in new development marketing “have begun to pay dividends.”
The firm has been pouring “tens of millions” into marketing efforts, Lorber said on the Vector earnings call Wednesday. Those efforts, which include glossy magazines and sponsoring courtside seats at Madison Square Garden, have coincided with a slowdown in the luxury market in New York City.
“The market was a little softer but started picking up at the end of last year,” after the election,” Lorber said on the call. “All in all, I think as the stock market continues to rise, so goes this real estate market.”
This year will continue to have plenty of deals, Lorber predicted, albeit at slightly lower prices.
“Look, I think those that want to sell have to become realistic and take price cuts or take the offer and sell,” he said.
With a dearth of investment opportunities in new development projects, Lorber said Vector will make more money from new development closings in 2017 than it will put into new projects via its New Valley subsidiary.
“This year, we’ll take out more than we put in because we really haven’t found anything great to invest in,” he said.
Overall, Vector reported net income of $71.1 million in 2016, up from $59.2 million a year earlier. Total revenue for the year topped $1.691 billion compared to $1.657 billion in 2015.
Last week, real estate conglomerate Realogy reported $5.81 billion in 2016 revenue, despite a lackluster year for its NRT division, which includes Corcoran, Sotheby’s International Realty and Citi Habitats. Sales at Corcoran and Sotheby’s dropped 7 percent in 2016, the company reported. Realogy vowed to become a “recruiting machine” and amass a larger roster of top talent.