The Daily Dirt: Inside the Corcoran “hack”
Companies typically keep broker splits under wraps. A recent leak offered a rare look into how one of the city’s biggest firms pays its brokers.
Last month documents detailing broker splits, marketing budgets and gross commission income were leaked to every Corcoran Group agent. Reporters E.B. Solomont and Erin Hudson took a deeper look at the materials, which Corcoran claimed had been hacked and were inaccurate. (The reporters kept names out of it and focused on the numbers.)
There are a few major takeaways from the report. Brokers at the firm take home 45 percent to 85 percent of the firm’s fee, which is based on sales price. According to the leaked data, the average split company-wide was 60.3 percent.
One-third of Corcoran’s gross commissions came from only 37 of its 1,239 brokers. Crucially, the leaked documents show some of the perks Corcoran has offered to agents. Marketing budgets range from $2,000 to $120,000, and seven agents had access to discretionary funds ranging from $5,000 to $275,000. There’s also an extra bonus, dubbed “Normandy Advance Payment,” which is offered to new agents to make up for any business they lost at their old firm by moving to Corcoran. The highest of these bonuses was $500,000.
Such benefits are critical for retaining agents and keeping them from being recruited away by other firms in an industry rife with poaching. In 2018, Corcoran gained 372 agents but lost 380. The firm lost 97 agents to Compass alone between the end of 2017 and the end of 2018.
The three pages of “hacked” documents provide insight into the health of Corcoran and how it manages its agents. (Corcoran, which has referred to the leak as a “criminal incident” and is investigating the matter, didn’t comment on a specific aspect of the report but called TRD’s publication of the information “irresponsible.”)
A-Rod is now focusing on a contact sport: real estate.
The retired Yankees’ star founded Miami-based A-Rod Corp. in 2003 and has since purchased more than 15,000 apartments across the U.S., Katherine Kallergis reports. He’s now getting more involved in South Florida and New York. His first buy in the city came in June, when he partnered with Barbara Corcoran to acquire an apartment building in the East Village. He — along with broker Adam Modlin and Stonehenge CEO Ofer Yardeni — are in contract to buy a 100-plus-unit apartment building at 340 East 51st Street. The partners are also working to raise $500 million to leverage roughly $1 billion worth of multifamily real estate purchases in the city over the next 18 months.
The former infielder said he and fiancée, Jennifer Lopez, are not looking for another apartment in New York after selling their pad at 432 Park Avenue. The couple do, however, talk business.
“Jennifer loves residential real estate. I love commercial real estate,” he said. “So we make a good team there.”
Residential: The priciest residential closing recorded on Wednesday was for a condo unit at 550 West 29th Street in Chelsea, at $3.1 million.
Commercial: The most expensive commercial closing of the day was for a warehouse at 46-06 57th Avenue in Maspeth, at $260.5 million.
The largest new building filing of the day was for a 14,277-square-foot apartment building at 1329 Morris Ave in Concourse. Propco Holdings filed the permit application.
NEW TO THE MARKET
The priciest residential listing to hit the market Wednesday was for a townhouse at 154 West 11th Street in Greenwich Village, at $8 million. Douglas Elliman’s Bettina Gochman Schriver has the listing. — Research by Mary Diduch
A thing we’ve learned…
Someone made sex toys inspired by Hudson Yards. Are we surprised? No. Scandalized? No. Upset we didn’t think of it first? Yes!
Design firm Wolfgang & Hite developed pink silicone versions of many buildings in the Related Companies’ megadevelopment, including a butt plug shaped like Thomas Heatherwick’s the Vessel, Dezeen reports. Thank you to the late architecture critic Ada Louise Huxtable for pointing out in 2008 that a pair of skyscrapers looked “in profile, alarmingly like sex toys,” forever validating criticisms of boringly phallic designs.
Thank you also to Christian D’Angelo, who commented on TRD’s Instagram about the story and made me cackle at my desk: “Let me know when 56 Leonard is available.” Hey, Wolfgang & Hite, get on it!
Top stories from our other markets:
Forever 21’s bankruptcy filing and the fast-fashion retailer’s plan to shutter scores of stores nationwide has left mall landlords with millions of dollars in outstanding lease payments and millions of square feet of empty space. It now costs the L.A.-based retailer about $450 million to occupy its stores, which span 12.2 million square feet.
Seizing on the rental market boom in Chicago, developer Jim Stoller is moving forward with a plan to convert a single-room occupancy hotel in Uptown into a mixed-use apartment building. The proposal would turn the 161-unit SRO into an 80-unit rental complex.
More than $7.4 billion worth of industrial properties have traded in Los Angeles and neighboring markets this year and if that pace continues, 2019 will set a record for investment sales. Through August, sales volume has climbed 5.5 percent year over year across Greater L.A., the Inland Empire, and Orange County.
Kushner Companies is making its first big real estate play in Fort Lauderdale. The company, led by Charles Kushner, Nicole Kushner Meyer and Laurent Morali, is under contract to purchase three properties for $49 million across the street from the Virgin Trains station in downtown Fort Lauderdale’s Himmarshee District.
— Compiled by Alexi Friedman