Douglas Elliman Pushes Into Connecticut Residential Market
It's leasing a high-profile Greenwich office and recruiting from competitors
Douglas Elliman Real Estate is trying to muscle its way into the Connecticut residential brokerage market by opening a high-profile office in Greenwich and recruiting big-name producers from competitors.
The firm, which has been on a national expansion binge in the past three years, has leased a 5,000-square-foot office with 50 desks across from Greenwich Town Hall. It also has recruited more than 30 brokers, including a four-person team from Sotheby's International Realty named the Fieldstone Group, which last year sold properties totaling more than $100 million.
Howard Lorber, chairman of Douglas Elliman, says the affluent Greenwich market is an obvious target for his firm, which also has opened offices in south Florida, Aspen and Los Angeles. "Greenwich is one of those high-end markets where people travel," he said. "It's all the same customer."
The opening comes as the Greenwich residential sales market continues to recover from the downturn. It's not as strong as the New York market, especially in the $4 million-to-$8 million range, brokers say. But the market for properties for $3 million and less is active, brokers say.
According to Sotheby's, there have been 176 closings below $3 million so far this year, compared with 134 during the same time in 2014. The median sales price in 2014 was $1.84 million, according to Douglas Elliman.
But the Greenwich brokerage market also has produced stiff competition among firms lately. There have been several new entrants to the market and some brokerages have consolidated. A few firms that have tried to make it in the region have closed their doors, according to David Haffenreffer, Houlihan Lawrence's branch manager in Greenwich.
"I don't think putting a flag down in Greenwich will guarantee success," he said. "It's a matter of understanding the marketplace and having a company that can help drive results."
Mr. Lorber and Dottie Herman, Douglas Elliman's chief executive, have been driving results higher ever since their improbable acquisition of the storied New York firm in 2003. Before they took over, Douglas Elliman had gone through a series of owners stretching back to its founding in 1911.
Mr. Lorber and Ms. Herman came into the picture when they co-owned a Long Island brokerage named Prudential Long Island Realty, a franchisee of Prudential Financial Inc.'s real-estate business. Interested in expanding, they set their sights on Douglas Elliman, which at the time was part of a real-estate empire controlled by New York mogul Andrew Farkus.
In an interview last week, Mr. Lorber recalled that he and Ms. Herman made their move after he figured out that Mr. Farkus was planning to sell the company to someone else. Fortunately for them, that deal was facing antitrust issues.
"We didn't have antitrust issues," Mr. Lorber said. "So I said, 'Look, whatever deal you made with them, I'll buy it from you for the same price.' "
Mr. Lorber and Ms. Herman wanted to keep expanding their business but for years ran into problems because of their franchise agreement with Prudential. Many of the areas they wanted to add offices in already had franchisees, he said. "They wouldn't let us expand where we wanted to expand," he said.
Their franchise agreement with Prudential ended in 2012. Since then Douglas Elliman has been steadily adding offices and boosting sales.
The firm currently has 5,500 brokers in the U.S., and last year sold real estate worth $18 billion while expanding its reach globally by forming an alliance with Knight Frank Residential of London.
Mr. Lorber said the timing of the Greenwich opening depended in large part on finding the right people. Last year, the firm hired Roberto Vannucchi, formerly a Sotheby's director of sales.
Mr. Vannucchi has been recruiting heavily in the region. Most recently he hired the Fieldstone Group, which has worked on such deals as last year's sale by film director Ron Howard of his home in Armonk, N.Y., for $27.5 million.
Robin Kencel, one of the Fieldstone members, said the team has more than $75 million in listings and is moving partly because of Douglas Elliman's strength in the New York market, a "critical feeder" to Greenwich. She said they also liked the firm's willingness to "try different avenues" to sell property, which is especially important with homes that don't sell quickly and "need a new approach."
The other members of the team are Lyn Stevens, Beverley Toepkeand Scott Elwell. Douglas Elliman "is going to shake things up," Ms. Kencel said.
Mr. Lorber said that Douglas Elliman is still in expansion mode. "We'll probably add another Connecticut office and probably a couple more in California," he said. "Maybe we'll go to a couple of other places."
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