Cornering the Middle

The Real DealMay 01, 2013
Call them the in-betweeners. They’re too small for the top firms list and too big for the boutiques. They’re New York City’s mid-size residential firms.

And for the first time this year, The Real Deal compiled a list ranking these firms by dollar volume of listings.

The firms — which this year had between 50 and roughly 240 agents — have recovered from the difficult market of the last few years and are now looking to grow, either by opening new offices and renovating old ones, hiring more brokers or expanding their core businesses.

“The market just has been steadily improving since the bottom in 2009, and we’ve all benefitted from that,” said Frederick Peters, president of the 126-agent firm Warburg Realty, which logged in at No. 2 on TRD’s ranking with $188.1 million worth of exclusive listings. (TRD’s data was collected from listings provider Online Residential in mid-March.)

Nabbing the No. 1 slot was the 55-agent brokerage CORE — which took the top spot on last year’s boutique list. This year, the company had 70 exclusive listings worth some $344 million. Rounding out the top three was relative newcomer Keller Williams NYC, which had 68 listings worth $186.5 million.

Collectively, the top nine mid-size firms had 319 Manhattan residential listings worth a total of $909.5 million.

Blu Realty founders, from left: David Tobon, Moshe Balalo, Alon Chadad, Michael Arcos and Andy Kim

Making moves

CORE saw a substantial uptick this year — 41 percent — in the dollar value of its listings. (TRD’s ranking last year found that it had listings valued at a total of $244.7 million.)

Much of that boost is due to one super-pricey listing: a five-bedroom property at 15 Central Park West, listed for $85 million with CORE’s Emily Beare.

CEO Shaun Osher said the firm has recently started representing several new developments, including the 92-unit 93 Worth Street in Tribeca.

The company also opened its first Uptown location on the Upper East Side last month, bringing its total number of offices to three.

“We’re definitively growing our brand,” Osher said.

In terms of number of agents, however, he said he’s not looking to drastically increase the size of the firm. Osher said the firm will “continue to grow organically,” but noted that he’s very picky about the agents he hires. “Per agent, we’re very efficient,” he said. “We don’t have agents who don’t do business.”

Warburg is also making moves. In March of this year, the firm moved from its longtime headquarters at 969 Madison Avenue into swanky new headquarters at 654 Madison.
Peters explained that it wasn’t until 2012 that Warburg even considered the upgrade.

“We needed more space,” Peters said. “It just seemed logical to look into an office building with a more central location; 2008 and 2009, the market had gone into the tank so it was hard to think about making a change like that and spending a whole bunch of money.”

“I love it. I am so excited about this place,” Peters added. “This move is clearly the most significant thing we’ve done” in the past year.

Next, Peters said he plans to renovate the firm’s other two offices to make them as “state of the art” as the Madison Avenue office.

That’s a significant change from the downturn. In 2009, Warburg shuttered two of its offices — at 2235 Frederick Douglass Boulevard in Harlem and at 65 West 13th Street.

But when it comes to number of agents, Peters said he has no plans to grow Warburg significantly more than its current total of 126 agents.

“I’ve made a decision about the size that I wanted to maintain for the firm because I want to make sure our broker-to-manager ratio is always small enough so agents can always get the training and support and feedback that they need,” Peters said.

Meanwhile, the 62-agent brokerage MNS is expanding its reach.

The firm — which was formed in 2011 as a merger between the Developers Group and the Real Estate Group New York — recently opened a new Williamsburg office at the Edge, which the firm has been marketing. The firm has two other offices in Manhattan. (Only Manhattan agents and listings were included in this ranking.)

“We have a good story in [Williamsburg],” MNS CEO Andrew Barrocas said. “We have a high concentration of apartments coming on the market and more condo sales than any other company out there in the Williamsburg market.”

While the firm is marketing a number of new rental and condo developments in the outer boroughs, “we did do a lot of business in the Manhattan market” this year, Barrocas said. For example, the firm is marketing the new development condo 2280 Frederick Douglass Boulevard in Harlem.

MNS stayed mostly consistent in terms of Manhattan dollar volume of listings, TRD found, increasing to $27.4 million in total dollar volume of listings from $27.1 million year-over-year. (Like CORE, MNS was also on the top boutiques list last year.)

Like many others, Barrocas attributed the lack of substantial growth to the work MNS has been doing with buyers as well as sellers (see related story, “Brokers turn to buyers to boost business”).

“There are probably 30 buyers to every one apartment that’s out there,” Barrocas said. “A lot of what we do work on is new developments and there were periods where there weren’t any new projects being planned.”

Another firm, 55-agent DJK Residential, is also shifting its focus. The firm came in at No. 7 with $13.9 million in Manhattan listings.

With listings few and far between in Manhattan, the firm has been doing a lot of work in New Jersey, through its office in Nutley, according to Phyllis Pezenik, the company’s vice president of brokerage services.

“With the market being tight and exclusives being gold, everyone’s looking for the bigger properties and they’re scarce,” she said. “But short of building them, we’re trying to find them wherever we can.”

The fifth-ranked firm, 80-agent Fenwick Keats, founded in 1989, had $44.2 million in sales listing volume for 38 listings this year. (Its most expensive listing was a $19.95 million Upper West Side townhouse at 47 West 70th Street.)

The firm, previously called Fenwick Keats Goodstein, bought out Goodstein Management in late 2010. Following the split, it moved out of its Downtown office at 45 Seventh Avenue and into new headquarters at 419 Park Avenue South.

In addition to its headquarters, it has an office Downtown at 45 Seventh Avenue and one on the Upper West Side at 2244 Broadway.

“We adhere to the basics and we are very consistent and steady, so our agents are really trained to deal with all markets and deliver with both our buyers and our sellers,” said Kinnaird Fox, Fenwick’s director of development.

Not mid-size for long

Some firms that are currently mid-size don’t plan to stay that way.

Keller Williams NYC — the Texas-based firm, which opened a Manhattan franchise in 2011 — hopes to grow to 750 Manhattan agents in the next three years, according to Eric Barron, Keller Williams NYC’s CEO. (The firm was founded by powerbroker Illan Bracha, who is still at the helm as the firm’s chairman.)

TRD’s mid-March tally found 240 agents listed on the firm’s website.

Barron said Keller Williams NYC also hopes to open four more offices across the city — on the Upper East and Upper West sides and two Downtown — in the next three years. The firm currently has one office, at 425 Park Avenue.

Growing the number of agents is crucial to Keller Williams’ unusual profit-sharing model: Half of Keller Williams’ annual profits are paid out to brokers who have recruited other agents.

But Barron said he’s not daunted by the fact that the firm has a long way to go. “We’re building the core and the foundation first and then we’re looking to expand,” he said.

The firm’s visibility may get a boost now that a Keller Williams broker, Luis Ortiz, is joining the cast of Bravo’s “Million Dollar Listing New York.” The season premiere of the series airs this month.

Keller Williams hired Ortiz from real estate brokerage Synergy NYC this past year. Barron said he was initially concerned about how Ortiz would be portrayed on the show, but is so far happy with how it’s shaping up. “How can you argue with the name Keller Williams New York City being on television six times a week?” he said.

Another new firm, Blu Realty, clocked in at No. 4 on the list with 28 exclusive sales listings worth $80.5 million.

Blu was founded in 2011 by five former Nest Seekers International brokers. According to TRD’s tally, Blu had 56 agents as of mid-March. But firm co-owner David Tobon disputed that, saying the company has 66.

He said the firm aims to have 100 agents by the end of the year to fill two new offices it’s looking to open — one Downtown and another on the Upper East Side. (The company currently has two offices, its headquarters at 1674 Broadway, and an Upper West Side outpost at 120 Riverside Boulevard.)

Tobon attributed the firm’s growing business to an increase in international clientele.
“We’ve gotten a lot of international clientele in the last year,” he said. “That’s where we’ve grown in sales.”

He said Blu’s increase of international clients has come primarily from the firm’s newly formed London office, which has exposed a variety of foreign buyers and sellers to the brokerage.

Back home in Manhattan, the firm is currently marketing several high-end listings, including a $27 million Upper East Side townhouse at 170 East 80th Street and a $17.5 million Upper West Side townhouse at 38 West 87th Street.