The Real DealMay 01, 2013Über-high-end firms dominated the ranks of Manhattan’s top boutique brokerages this year as prices soared in the luxury market — even as firms competed for a shrinking number of available listings.
With last year’s top boutique firm, CORE, now categorized as a mid-size company on The Real Deal’s annual ranking, Upper East Side brokerage Leslie J. Garfield regained its long-time berth as the No. 1 boutique firm. The company had some $93.8 million in exclusive residential sales listings as of mid-March, when TRD collected the data from listings provider On-Line Residential.
Following on its heels is the six-agent brokerage the Modlin Group, with some $84.2 million in listings. Laurance Kaiser’s Key-Ventures rounded out the top three, with $79.7 million, according to TRD’s research.
Despite the high prices of listings now on the market, many boutique brokerages now have fewer listings than they did at this time last year, largely due to the overall inventory shortage currently plaguing Manhattan (see related story, “Midtown West, Tribeca, Chelsea rank as Manhattan ‘hoods with steepest inventory plunge”). And while the biggest firms in the city deal in volume, boutique firms rely on far fewer listings and can therefore see their total dollar value of listings more severely sink when their listings count drops — even by just one or two properties.
Collectively, the top nine boutique firms had 91 Manhattan residential properties listed for sale, for a total sticker price of $443.6 million; those firms had 227 brokers. That’s a dramatic decrease from last year, when the top nine boutique firms had 254 Manhattan residential listings totaling $823.4 million.
At the same time, however, the demand for luxury homes has given firms more higher-priced exclusives than ever. Perhaps as a result, some firms did see substantial growth. The Modlin Group, for example, had nine Manhattan listings worth $84.2 million — almost double the $48 million it recorded at this time last year.
This odd combination of market conditions is frustrating for brokers, noted Barbara Fox of Fox Residential Group, which came in at No. 4 with $64.4 million in listings. “We’re rarely selling any of our exclusives without a bidding war right now,” she said. “It’s crazy.”
She added: “It is truly frustrating to have a great buyer and not have anything great to show them. Or to have three things, rather than 30 things, to show them. And I think it’s very frustrating for buyers, who really need to buy, [but] can’t find what they want.”
A Mercedes/Berk listing at the Time Warner Center
Known for specializing in townhouses, Leslie J. Garfield is headed by the founder’s son, Jed Garfield.
The 11-agent firm’s most expensive listing is currently a $30 million Carnegie Hill townhouse at 12 East 96th Street. Still, TRD’s data showed the firm with only 10 Manhattan listings this year, compared to 23 (totaling $182.4 million) in 2012.
Luckily, Garfield said, the firm has been able to compensate by working with buyers more frequently (see related story, “Brokers turn to buyers to boost business”).
The lack of inventory “hasn’t specifically affected our bottom line yet, but I’ve definitely noticed it,” he said.
Still, it’s clearly exasperating.
“I have five or six good customers, and most of them have seen everything on the market,” he said, “which means the entire office is spending a lot of time on the phone digging for new product.”
Among the most dramatic leaps in the rankings was Modlin’s jump to second place from sixth place last year.
The firm specializes in “high-net-worth individuals and families,” said Adam Modlin, the company’s president and founder. “Having those specialized and trusting relationships over a period of years creates a certain ongoing business and stability that, thankfully and humbly, has been able to exist in spite of uncertain economic times.”
Though Modlin famously refuses to name his clients, he is known for working with celebrities, including baseball superstars A-Rod and Ichiro Suzuki. Among the firm’s priciest listings is a $24.5 million penthouse at 76 Crosby Street, which Modlin described as “one of the best and nicest penthouses in all of New York City” because of its renovation and design work. The house reportedly belongs to TV personality Kelly Ripa and her husband, Mark Consuelos.
Modlin is also listing a townhouse at 19 East 70th Street for $38 million. The Italian Renaissance mansion, formerly home of the Knoedler Gallery, was not included in TRD’s rankings because it’s classified as a multifamily building, though Modlin said it is being marketed as a single-family home.
Another firm that jumped on this year’s ranking was Kaiser’s Key-Ventures, which took the No. 3 spot, up from No. 7 last year. It had seven exclusive listings for a total of $79.7 million. That’s significantly more than its $45.7 million total for last year, despite the fact that the firm had a higher number of exclusives — 11 — last year.
Kaiser, who founded the firm 47 years ago, said he’s used to dealing with a shortage of listings.
“There’s always a lack of inventory for the best things in the best buildings,” he said.
Kaiser said his niche is working discreetly with high-end clients and celebrities who don’t like publicity. “We do very well, in a low-key way,” he said.
And he’s not showing signs of slowing down. Even as he approached his fifth decade running Key-Ventures, Kaiser said he’s nowhere near retirement. “As long as I’m alive, we’ll go on,” he said.
Meanwhile, the 13-agent firm Mercedes/Berk jumped to No. 5 in the rankings this year, up from No. 10 last year, with its listing volume increasing to $38.2 million year-over-year from $17.7 million, TRD’s data shows.
While the firm keeps a relatively low profile, it’s known for its high-end listings in buildings such as 15 Central Park West. Firm principal Noel Berk attributed the company’s success this year in part to its strong ties to international buyers.
“We have remained small in size, but the total volume of our deals is increasing tremendously because of the fact that we have a huge global reach of clients,” Berk explained.
She added that the firm has worked as the buyer’s broker in sought-after developments, such as 432 Park Avenue.
“It’s been a good year [for] selling new [construction] product,” Berk said. “We find our clients are seeking new apartments that will become available in two or three years. By the time these apartments [are ready], the return on their deposit is going to be very significant.”
Berk said she only anticipates the market getting busier as more international clients seek out high-end real estate in Manhattan. Of course, that depends on whether the supply of Manhattan residential properties gets boosted.
Some firms’ results were concrete proof that the inventory squeeze may be most disproportionally felt in the boutique brokerage world, where those one or two high-priced listings can make a huge difference.
Kleier Residential, Fox Residential and Platinum Properties all saw the dollar amount of their exclusive listings drop this past year.
Kleier’s ranking dropped from No. 3 to No. 6, TRD’s data shows, and its dollar volume of listings fell from $113.2 million to $37.4 million year-over-year.
But firm head Michele Kleier said with listings scarce in the current market, she’s been representing more buyers than usual. For example, she said, in February she represented the buyer of a $12.9 million apartment at 823 Park Avenue.
While in the past, the firm’s client base was generally split evenly between buyers and sellers, she said that’s recently shifted to about 70 percent buyers and 30 percent sellers.
“People wanted to buy first, then put their homes on the market,” she said. “When the market has a scarcity of product, they’re afraid to sell first. They’re afraid they’ll sell and be homeless.”
She noted that Kleier Residential also listed several multimillion dollar properties in early April after TRD’s data was collected — such as a $3.5 million unit at 55 East End Avenue — to coincide with families returning to New York from spring vacation.
As for Fox Residential, Fox said she’s not concerned about a drop in listings to $64.4 million, down 24 percent from $84.5 million last year. “I never sweat it when we’re down a little bit because I know we always make it up,” she said.
Fox recently sold a $21 million penthouse duplex listing at 733 Park Avenue.
The eight-year-old brokerage Platinum Properties also saw a drop in listing-dollar volume, from $20.3 million last year to $13.4 million.
And Elegran Realty entered the fray this year with seven listings worth $16.8 million. Michael Rossi, cofounder of the five-year-old firm, attributed its “under-the-radar success” to its out-of-the-box approach. For one thing, all of the firm’s 38 agents are new to real estate.
“None of us came from another firm,” Rossi said. “We’re really trying to create something different here.”