Town Residential shutting down sale, leasing business
Brokerage says it will continue with new dev division; operate out of 888 Seventh
Town Residential, the Manhattan brokerage that at its zenith was home to nearly 600 agents, is shutting down its resale and leasing business, The Real Deal has learned. The firm, founded and led by Andrew Heiberger, says it will continue to work in new development, operating out of its 888 Seventh Avenue office.
“After a thoughtful review of the marketplace, TOWN Residential will be ceasing resale sales and leasing operations and focusing on international referrals and new development,” a spokesperson for the firm told TRD. Heiberger declined to comment.
Managers were informed of the decision Thursday afternoon, according to sources at the firm. In recent months, sources both within and outside the company have claimed the firm was delaying paying commissions to its brokers and was struggling to pay its bills.
“We are here to work with you to ensure a smooth transition,” Heiberger said in a company-wide email Thursday that was reviewed by TRD. “I know that you will find continued success and if there is anything I can do to help you now or in the future, please do not hesitate to call.”
The closure of the sales and leasing divisions effectively means that Town – in its current iteration at least – is done. It marks the end of a dazzling eight-year run for what came to be known as perhaps the quintessential Manhattan brokerage: bold, loud, growth-obsessed, and provocative. After selling his previous firm Citi Habitats, Heiberger founded Town in 2010 and a year later brought retail mogul Joseph Sitt aboard as a major investor. The firm grew rapidly: By 2015, it was the fifth-largest firm in Manhattan by agent count according to TRD’s ranking, and sixth by dollar volume of Manhattan listings. Last year, Town placed eighth on the ranking of sell-side closed deals, with $660 million in deal volume in Manhattan, down 24 percent year-over-year.
At the time, Heiberger said that including buy-side deals, Town’s internal numbers showed it sold just under $2 billion worth of property in 2017.
“I’m not going to apologize for doing $2 billion in sales,” he said.
But Town’s ascent to the top tier of Manhattan brokerage came with generous scoops of drama, most notably a bitter legal battle settled in March of that year. In 2016, however, Town had another existential crisis: Sitt duked it out with the firm’s former president of sales, Wendy Maitland, who alleged that he had starved the firm financially, causing it to both lose agents and business. In July 2016, Heiberger bought Sitt out of his interest, taking full control of the firm with what he said was the backing of several high-net-worth individuals.
Since the summer, however, agents have complained about late commission payments and bounced checks. In December, the firm known for hosting raucous holiday bashes at Tao Downtown and Tavern on the Green said it was limiting festivities to smaller gatherings at individual offices.
Those who saw it coming fled to rival firms. Mark David Fromm and Claudia Saez Fromm went to the Corcoran Group, for example, while Antonio Del Rosario joined Brown Harris Stevens.
In March, Town announced it had downsized its office footprint. In addition to shutting a small Brooklyn office, the firm closed its Upper East Side location and moved those agents and managers to a new corporate office at 888 Seventh Avenue. The same month, the firm laid off Melissa True — former managing director of culture and careers and one of Heiberger’s key allies.
In an email to agents earlier this year, Town said it would start paying agents within 72 hours of receiving a commission check — instead of the 30 days mandated by the agent contracts. Many agents, however, claim they have continued to face delays in receiving commission checks.
On April 16, Heiberger was sued for Town’s alleged nonpayment of $120,000 in rent at 239 East 79th Street, the firm’s recently-shuttered Upper East Side office. The suit was settled within a day. But on April 17, Heiberger was hit with another claim, this time from the ground-floor landlord at 33 Irving Place, Town’s Union Square location.
That suit claimed Town owed more than $174,562 in unpaid rent, after not paying its $40,000-plus monthly rent since January.
Sources said agents have been told exclusives will follow them to their new firms, as will in-contract listings.
“The writing was on the wall, so to speak,” said a manager leaving Town’s Astor Place office Thursday evening. “But the true Town believers believed in Andrew.”
Agents on the way out carried shopping bags emblazoned with the firm name. One pulled a rolling suitcase filled with the contents of his desk. “I’m not going to the Bahamas,” he said.