Start-up seeks to disrupt disrupters in real estate

The Washington PostAugust 15, 2017

It’s time to disrupt the disrupters in real estate.


Websites such as Zillow and Trulia have improved the real estate industry over the past decade. They were designed to be a one-stop shop for searching a vast centralized database of homes for sale or rent, allowing the consumer to get a clear picture of all available properties.


But Zillow’s business model is showing its limitations.


Among other issues, Zillow’s database of homes is frequently inaccurate. Many buyers inquire about a house they found on Zillow only to find out it was sold months or even years ago. Zillow’s valuation tool, Zestimate, is regularly out of sync with reality in many markets. Hence, the lawsuits filed against Zillow by homeowners for the low valuation of their homes.


Fortunately, there are some new options coming online soon that should provide a better option for home buyers and sellers.


I have recently come across start-up firm REX, which could be the next generation in multiple-listing services. See its website at


REX is creating a futuristic global multiple-listing service (MLS) built on three innovative technologies — the blockchain, data distribution and digital currencies.


If you are not familiar with these new technologies, start studying them now. In the next three to five years, many insurance companies, banks, online retailers, governments and technology companies will be run on these platforms.


Early adopters of pioneer digital currency, Bitcoin, are multi-millionaires now. Blockchain is the technology on which Bitcoin currency is built.


Simplified, blockchain is a system for crowdsourcing data, not unlike Wikipedia.


More precisely, think of a spreadsheet that is duplicated thousands of times across a network of computers. Each computer must approve all data input into the spreadsheet, thus eliminating corruption in the system. Once data is approved through this democratized system, it cannot be revised or deleted.


Since no single entity controls the data, it is completely public and verifiable. Thus, data on the blockchain is designed to be incorruptible, transparent, decentralized and secure.

By using blockchain technology, REX is creating a Zillow-like service purportedly without the limitations that consumers experience on Zillow.


Blockchain technology, as designed, allows REX to create an accurate database of properties available for sale — a database that has been verified and approved by multiple users in the system.


How exactly does it work?


If you list your home for sale on REX, you are rewarded for your participation in the system. In addition, other users in the system are rewarded for verifying and approving the information you have uploaded. By the way, you or your real estate agent can participate.


The reward offered is REX tokens, a digital currency whose value can be exchanged for services or products on REX, such as home inspection reports or comparable market reports. Users also can exchange tokens for FIAT currency such as dollars. The tokens are an incentive to participate in the system.


What does this mean for the consumer?


According to REX co-founder Stephen King, it means that there will finally be an updated and accurate database of homes to peruse. It means that users collaborate to provide a curated list of homes for sale which, in turn, creates a more accurate database for comparable research on homes sold.


“REX is a community-run platform with built in incentive programs that reward users for their participation,” King says.


King says that REX will put control of real estate data back into the hands of homeowners, and away from sites that monopolize the data.


REX’s grand goal is to take every separate MLS in the world and roll them into one democratized multiple-listing service. Later versions of REX will include tying into local governments for land titling using blockchain technology, which will allow less fraud and thus potentially reduce the need for expensive title insurance. REX also plans to use REX tokens as a means of funding the purchase of a home.


Before launching these futuristic applications, REX must first build a robust database of homes. REX is pre-selling REX tokens and will launch the multiple-listing service later this year.


Does REX hope to disrupt the real estate agent?


We will collaborate with the real estate industry, rather than create its demise,” King said.

Pro Tips: 5 Easy Fixes to Attract Home Buyers

One Kings LaneAugust 14, 2017

There’s an art to prepping your home for sale, and it’s called staging. Not to be confused with decorating, which is an expression of personal style, staging involves the de-characterization of all your spaces. It requires that everything be stripped down to its most neutral state so that potential buyers (no matter how different their tastes may be from yours) can imagine themselves living in what you once called home. Structural concerns aside, it’s a fairly straightforward process, but one that can seem daunting amidst the emotional and financial struggles inherent to any move. Here, we spoke with Compass’s Lauren Chao and Core’s Thijs van der Does, two of New York’s top real-estate agents, and got their take on what to focus on when staging a room. From paint to clutter control, we’ve summed it all up into five actionable tips. 


1. Painting Pays Off


“I always suggest repainting or a touch-up, if there’s any hint that the walls looks tired,” says Lauren. Her paint of choice? “Benjamin Moore’s Decorator’s White. It’s a shade that works in every space and is a popular choice with both builders and designers.” Thijs also suggests repainting before trying to sell. “A fresh coat on your shutters, front door, and kitchen cabinets will go a long way,” he says.


2. Details Make a Difference


“Whether it’s Turkish towels in the powder room or a Monstera leaf on a coffee table, it’s the little things that make a big difference,” Lauren notes. And though every room should feel white and bright, Thijs suggests a few colorful details here and there to help guide buyers’ eyes around a room. “An elegant bowl filled with fresh fruit on a clean kitchen counter is something everyone responds well to,” he says. And don’t skimp on a vase or two of seasonal flowers.


3. Clear the Clutter


Though you may love your great-uncle’s collection of gnomes on the mantel, it’s likely that buyers will feel quite the opposite. “Clear out the clutter, and keep the decor simple by creating deliberate vignettes to foster imagination,” Lauren advises. “Whether it’s a reading nook with a throw or a thoughtfully curated bookshelf, you want to create moments that enable people to picture themselves living there.”


4. Switch It Out


“Additional small improvements to consider are switching out the hardware on the cabinetry, replacing light fixtures, or adding a fresh shower curtain and bath linens to make an older bathroom more attractive,” says Thijs. All things easily accomplished in five minutes or less, they may help you score exactly the price you’re asking for.


5. Keep the Flow


You want every room to read as if it’s open plan. Superfluous furniture should be removed “so buyers don’t have to bob and weave,” says Lauren. Similarly, Thijs suggests replacing bulkier pieces in favor of those with clean lines and a lighter weight. This, he says “will create a clear purpose for each room, so the buyer can fill in the gaps with regard to their personal taste.”

6 perfect (and perfectly legal) live-work spaces

Brick UndergroundAugust 11, 2017

Most people who find themselves working from home just set up a desk in some nook or cranny of their apartment and call it a day. But if you plan to run a proper business from your abode—where employees, clients, patrons and/or patients regularly come and go—you may need to consider a legitimate (that is, legally zoned) space in which to work and live. Here are six spaces that bridge the live-work gap beautifully.


Located in a residential building at 236 East 6th Street ($2.1 million) is a charming one-bedroom apartment with a lower-level windowed commercial unit, complete with its own street entrance for an ideal separation between home and office.

New York rent comparison: What $4,400/month gets you right now

CurbedAugust 08, 2017

Welcome to Curbed Comparisons, a weekly column that explores what one can rent for a set dollar amount in various NYC neighborhoods. Is one man's studio another man's townhouse? Let's find out! Today, we're looking at apartments renting around $4,400/month.


↑ This Upper West Side duplex loft has two bedrooms, one bathroom, brick walls, original hardwood floors, and even a furnished outdoor space for $4,375/month. It’s also located just a block away from Central Park, the American Museum of Natural History, and the New-York Historical Society.

How to Lease Commercial Real Estate: The Ultimate Guide

Fit Small BusinessAugust 07, 2017

Conduct Multiple Walkthroughs


You and your broker should identify multiple commercial spaces to view. This helps you get a better understanding of average price and gives you a leg up during the negotiation process. During your search you’ll also want to compare rents to each other to ensure you’re staying on budget.


A rule of thumb is that you should consider between 4 – 10 commercial properties prior to signing a lease. Alex Cohen, a broker and principal of Future Workplace, tells Fit Small Business that:


“If it’s a retail space then location is critical. Proximity to other retailers, access to transportation, and visibility/signage opportunity can be critical. In this case, there may only be 4 or 5 spaces available that meet the business’s criteria and objectives. A good broker will sometimes develop creative alternatives that might be outside the locational parameters but offer other advantages – such as co-tenancy or lease term flexibility.


In terms of office space, typically tenants may consider 8 -10 alternatives. Tenants will then narrow the options down to 4 – 5 and go on physical tours. Tours are typically conducted in a single day, but if you tour more than 4 – 5 during one day, the spaces can all seem to meld together, challenging the decision-making process.”


These walk-throughs are called “technical property reviews.” They’re conducted with your broker and the landlord’s broker. Once you’ve walked the properties, you’ll want to consider the different lease terms of each.


You’ll also sometimes want to walk a property with a licensed contractor. This is because some commercial spaces require lease build outs, which are necessary additions or improvements to the space. Build outs can be fully or partially covered by the landlord. It’s important in this scenario that you get an accurate renovation estimate and negotiate a build out into your lease.


The deciding factor between your options will often be the lease terms. Let’s take a moment to discuss the different types of commercial lease terms as well as the common commercial lease terms.

Quirky loft in Tribeca horse stable reappears, subdued, for $4.5M

CurbedAugust 07, 2017

A Tribeca apartment in the former American Express Carriage House has returned to the market with a toned-down look and yet another price chop. The loft—a three-bedroom, two bathroom floor-through—is back on the market asking $4.495 million, which is $25,000 less than it sought in January, and $700,000 less than when it first hit the market in April 2016.


With the new listing comes newly muted interiors. Some of the colorful rugs and furnishings in the 2,400-square-foot loft have been swapped out for more on-trend pieces—see the light fixtures in the living room—and the once-bright bedrooms have been painted a subdued white.


The two-bedroom apartment also comes with a den and overlooks an atrium.


But such is the cost of trying to sell. The loft at 60 Collister Street also comes with a monthly fee of $2,011 for common charges and $1,737 in taxes. The apartment is on the market with Emily Beare at Core.

Sunny Clinton Hill one-bedroom seeking $510K is a neighborhood steal

CurbedAugust 04, 2017

Welcome back to The Six-Digit Club, in which we take a look at a newish-to-market listing priced under $1 million, because nice things sometimes come in small packages. Send nominations to the tipline.


Considering the median listing price in Clinton Hill is hovering at $800,000 (according to one estimate), this sunny one-bedroom in the Willoughby Walk Cooperative Apartments sure seems like a steal at $510,000. According to the New York Times’ metric, the average price of a one-bedroom in the neighborhood stands at nearly $650,000, so even by that measure this seems like a bargain.


The apartment is located on the 15th floor of a 16-story building on Hall Street. The co-op opens up onto a small foyer, with the kitchen (which comes with a dishwasher) in front. An L-shaped living area is to the left, and the dining alcove part of this space is currently being used as a nursery/baby’s room.


If the listing’s photos are anything to go by, the living room still seems pretty spacious, and comfortably fits a six-person dining table by the large window. The bedroom here is also large and can fit a king size bed, according to the brokerbabble.


Aside from that, the apartment features wooden floors, there’s a walk-in closet by the front door, and the kitchen was recently renovated. Residents in the co-op also have access to a laundry facility in the basement, and an outdoor deck and garden.

Six small studio apartments that give the impression of space to spare

Brick UndergroundAugust 04, 2017

Studios tend to get a bad rap due to their typically small size, limited access to windows and natural light and generally cramped feel, but a tiny apartment can work to your advantage if it's well laid out and you are creative with storage, can invest in quality appliances and are the neat and tidy type. Here, six one-room wonders that prove the point. 


Four windows, three closets, a wall of built-in shelves and a separate windowed kitchen make this alcove studio at 31 Jane Street in the West Village (on the market for $715,000) feel larger than it is.


Finally, a generous entry foyer and a sleeping area with a wall of floor-to-ceilings built-in closets, plus clever open shelving separating it from the living "room", makes the most of the space in a studio co-op at 155 East 49th Street (for sale at $495,000).

Design Dialogues No. 36

SURFACE MagazineAugust 01, 2017

On Wednesday, June 28, designer and cofounder of, Exhibition A, Cynthia Rowley, and founder and CEO of CORE real estate group joined Surface magazine’s editor-in-chief, Spencer Bailey, for Design Dialogues No. 36. Inside the Annabelle Selldorf–designed 42 Crosby in New York City, more than 75 guests gathered, including Pari Ehsan, Buxton Midyette, Jilly Hendrix, and Andy Cohen (of Atlas Capital Group), for a discussion that examined the future of retail, technology, design—and of living in New York City.


“I didn’t really have the money to pay for it,” said Rowley of her first apartment in New York, “but I could justify it because it was for work and I had a youth-hostel idea, where you could come and stay with me if you worked and helped make clothes.”


“We’ve seen people through divorces and catastrophes,” Shaun Osher observed. “There’s never a dull moment in real estate. And I’ve always said, buying real estate is a completely irrational act.”


Rowley ended the evening of cocktails and snacks with a clever tip for those trying to make it in New York: “If all else fails deny, defy, and sugar coat.“

Who’s winning condo marketing’s game of musical chairs

The Real DealAugust 01, 2017

UPDATED, Aug. 3, 2 p.m.: On a Friday morning in the middle of last month, news broke that the residential brokerage Compass had replaced Sotheby’s International Realty as the marketing firm at Siras Oriel Development’s Soori High Line — a 31-unit Chelsea condo development that launched sales in 2014.


The announcement looked like a big win for the brokerage’s three-year-old new-development division. Compass, the venture capital-backed startup founded by Ori Allon and Robert Reffkin in 2010, has brought on big names such as Leonard Steinberg, Toni Haber and Billy Goldstein in recent years and has closed $417.6 million in New York City new-development condo deals since June 2014. But so far, the young brokerage only has a handful of exclusive new-development assignments to show for it.


Landing the Soori High Line just four months after the firm took over sales at Tessler Development’s 172 Madison Avenue seemed to add to its momentum. But the publicity boost was short-lived. Later that morning, The Real Deal reported that developer Ben Shaoul had booted Compass off his 196 Orchard Street project, replacing it with industry behemoth Douglas Elliman.


“There’s nothing wrong with mixing it up,” Shaoul said at the time. “Since I bought the building to today, the neighborhood has changed so much. You want a fresh set of eyes on your product when so much is happening all around you.”


Such is the current state of new development marketing, which can be brutally cutthroat. And as luxury sales slow in New York and developers grow increasingly anxious about selling out their condo projects, competition between brokerages — which already seemed to be at an all-time high — has become even fiercer.


“In my 15-plus years in the business, I’ve never witnessed so much switching and swapping of teams on different projects,” said Kelly Kennedy Mack, president of Corcoran Sunshine Marketing Group, the new-development arm of the Corcoran Group. “Frankly, I think the whole thing is kind of ridiculous and definitely not in the best interest of the projects long-term.”


For all the uncertainty in the market, TRD’s latest ranking of new-development firms, in many ways, reflects our previous rankings — though this time around we’ve included projects in Brooklyn and Queens, where new condos have sprouted like weeds in the last five years.


The two-in-one ranking — which we divided up into closed units and “unsold” units — was designed to provide a window into which firms have already notched the most business and which ones have the most potential business coming down the pike.


The top firms on the ranking closed a combined $20.62 billion in new development condos in the last three years. And despite New York’s softening new development market, the brokerages that made the cut on our pipeline ranking, which includes all active listings, in-contract deals and so-called shadow inventory — units that have been assigned to firms but have not yet hit the market — have a combined $35.94 billion worth of condos to sell.


But closing deals in this market is not likely to be easy.

Gary Malin, president of Citi Habitats — which has the same parent company as Corcoran and did not make the ranking — said buyers “are more willing to take a wait-and-see approach” considering the surge in new supply.


Due to the “much more challenging market,” brokerages are locked in severe competition to sell condos in new and often uncompleted buildings, Compass’ Steinberg noted.


Susan de França, who heads Douglas Elliman Development Marketing, said, “the competition between new-development marketing firms has always been strong in New York, but when the market changes it does tend to narrow the field.”


Once again, Corcoran took the top spot on TRD’s ranking by closed sales.

The firm — which has long been the most dominating force on New York’s new-development brokerage scene — closed $9.13 billion in new-condo deals during the three-year stretch between June 1, 2014 and May 30, 2017. Those deals were sealed at megaprojects including the 145-unit 56 Leonard, where a penthouse recently sold for $48 million, and the 123-unit Halcyon. Arguably its biggest assignment is Vornado Realty Trust’s 220 Central Park South, which has a projected sellout of $3.1 billion and reportedly includes a $250 million penthouse.


Clocking in at No. 2 was Elliman with $5.92 billion in closed sales during that same time. Its most high-profile assignment was CIM Group and Harry Macklowe’s 432 Park Avenue.

Elliman was followed by Stribling Marketing Associates at No. 3 (with $1.48 billion), Halstead at No. 4 (with $1.11 billion) and CORE at No. 5 (with $928.8 million). There is a clear divide between the haves and have-nots: Corcoran and Elliman accounted for a staggering 73 percent of the top 10’s combined sales over the period.


The divide is even more stark when looking at unsold inventory, where the two firms snagged 80 percent of the total.

As of June 29, they respectively had $17.23 billion and $11.32 billion in unsold units.

In a telling sign, Compass took the No. 3 spot for unsold inventory with $2.07 billion worth of units, suggesting that the young firm is making inroads into this rarefied sector of the residential market.


The upstart brokerage was followed by Stribling at No. 4 (with $1.79 billion worth of pipeline units) and Sotheby’s at No. 5 (with $800.2 million).

And it’s clear no new development marketing firm can get too comfortable in this market. That’s because more often than not, the firm hired at the outset doesn’t make it to the finish line.

Revolving doors


Virtually every major residential firm has experienced both sides of the switch-and-swap frenzy since the start of 2016, when the market began sliding.

When Shaoul replaced Compass at 196 Orchard, it was Elliman that stepped in. But a little more than a year earlier, Elliman was on the receiving end of the boot at the developer’s 157-unit 100 Barclay project in Tribeca when Corcoran Sunshine was hired to take over.

And Corcoran has also been kicked to the curb.

Developer Bruce Eichner, for example, replaced the firm at his 83-unit 45 East 22nd Street known as Madison Square Park Tower in September 2016 in favor of none other than Elliman. Meanwhile, just last month, Forest City Ratner and Greenland USA replaced Corcoran with Nest Seekers International’s Ryan Serhant, who will handle more than 100 unsold units at 550 Vanderbilt Avenue — the first condo tower at the sprawling Pacific Park development in Brooklyn.


Mack said if a brokerage pursued the wrong sales strategy, switching firms may be justified, but she added that in most cases it does little good.


Swapping new development marketing firms is similar to firing the coach of a losing soccer team with a less-than-stellar lineup of players. In other words, it’s a more viable option than firing the whole team.

“It’s easy to blame the marketing agent,” said Steinberg. The alternative, he argued, is to blame the market — but doing so would imply that the developer miscalculated.


Getting fired from a project isn’t, of course, just a PR blow for a firm — it can also be a major financial setback with millions of dollars of potential deals hanging in the balance.

While developers generally pay marketing firms a fee until closings start, if a brokerage gets replaced early in the sales process, before commissions start trickling in, it risks losing money, noted Stephen


Kliegerman, president of Terra Development Marketing, the parent company of Brown Harris Stevens Development Marketing and Halstead Property Development Marketing.


Kliegerman said the fees fronted by the developer “are minimal relative to the staff you’re bringing to the table.”


Mack said Corcoran’s contracts usually include protections — such as a financial penalty — designed to ensure that the firm doesn’t lose money if it gets replaced early.

Brokers, however, can’t make up for lost time.


“We could be on projects for three years before we even start selling, and then it could be a two-year sale cycle,” said Steven Rutter, the director of Stribling Marketing Associates. Spending all that time on a project only to lose out on some of the commissions is not ideal, sources say, although there are generally termination fees.


Andrew Heiberger, CEO of Town Residential — which ranked 9th in both closed sales and unsold inventory — said the most marketing firms can do is plan ahead for uncertainty. “When I underwrite these projects for my budget, I usually never assume we sell these projects 100 percent,” he noted.


 In January, the developers behind 212 Fifth Avenue — a partnership between Madison Equities, Building and Land Technology and Thor Equities — sued Town for failing to hit sales targets at the 48-unit condo conversion. Behind the scenes, sources said, the sponsors were at odds over whether to cut prices. The two parties ultimately settled.


“We are proud of our contributions to this project and the fact that we sold 23 units at record prices totaling over $189 million,” a representative for Town said in a statement.


Luxury condo sales have slowed considerably over the past two years. The average number of days that new development units sat on the market in the second quarter of 2017 was 225 — nearly double that of the same period in 2014, according to Miller Samuel. Meanwhile, the average sales price per square foot fell by close to 1 percent year over year in 2017’s second quarter, and the drop on the high end is almost certainly more pronounced.


“The wealthy don’t have the urgency to buy as they did a few years ago,” Steinberg said.

On top of that, he argued, buyers are increasingly “neighborhood-agnostic,” meaning they’re willing to look at buildings across the city. In turn, developers and their marketing firms must now take additional and often costly steps to compete with rival buildings, which helps explain the recent spread of concessions in the sector.


In one extreme example this year, Wonder Works Construction and Girona Ventures, the developers of a $36.8 million townhouse at 357 West 17th Street, offered a “free Bentley” with the property — which the buyer would indirectly pay for through the sales price. As of late July, the property was still on the market.


In addition, some developers with new condo units to unload are dangling higher-than-standard commissions (usually 4 percent) to attract buyers’ brokers to their projects. Extell Development, Toll Brothers, the World Wide Group and Rose Associates are among the players that have adopted that strategy.


“[Developers] almost have to appeal to the brokers first and the buyers second,” Rutter said.

Still, the competition to win assignments is as intense as ever.


One strategy brokerages are using to win over developers is offering services beyond just sales, research and even property management. Kliegerman said Halstead recently hired architect Whitney Kraus, formerly of Selldorf Architects, and is looking to hire another architect to advise on floor plans and zoning. The idea is to have Kraus act as an advisor and as a kind of conduit between the developer’s architect and the marketing firm. “It also adds another level of expertise to our team that benefits our client,” Kliegerman said.


Brokers say that despite market conditions, some firms are overpromising on pricing to convince developers to hire them. “There are definitely companies that do that,” said CORE’s founder and CEO, Shaun Osher.


“But that’s not a successful business model,” he said, “because overpromising on price eventually catches up with you.”


Kliegerman said that on at least half the assignments his firm loses, the “overriding” reason was another firm insisting that it could land higher prices.

Few sponsors, sources say, like to face the reality that their units are worth less than they think.

But promising higher-than-realistic prices can quickly backfire.


“Overpromising and underdelivering doesn’t necessarily create a good relationship,” Malin of Citi Habitats said. “Owners are smart enough to know that someone promising prices that can’t be delivered by the market is a red flag.”

In the end, marketing executives say a key part of their job is convincing developers to accept prices that will move units and still generate a healthy profit or allow them to at least break even.


“It’s always an extraordinarily difficult conversation to have,” Mack noted. Such talks can become “highly emotional” because developers are passionate about their projects, and “some of them find it insulting” when marketing firms suggest a project may not be worth as much as they thought, she said.

Steinberg said he spoke with executives at RFR Realty and China Vanke about pricing at some of the units in their 100 East 53rd Street condo project. Sales at the 63-story tower, which is slated to open by the end of the year, had been lagging until the developers decided to cut prices for some units this year, he and other sources said.


“These days you can’t have it both ways. You can’t have maximized pricing and swift sales,” Steinberg explained. “We’ve had difficult conversations on that subject, and sometimes you just don’t come to agreement. And then you have a decision to make: Do I continue to spend my time marketing something when the market is just saying no?”

Rutter said that convincing developers to adjust pricing when necessary is key to success. At 252 East 57th Street, lowering prices and offering new commission incentives put the project “back on people’s radar” and led to consistent sales,” he noted.

Even though marketing firms may risk losing a project if they sound too pessimistic on pricing, the alternative of not selling apartments because they are overpriced is far less appealing, Rutter argued.


“My feeling is that if we don’t [insist on lower prices] and we’re not selling, we risk developers going to someone else anyway,” he said. “What I don’t want to happen is have them go to someone else and have [that broker] convince them to lower the price.”


— Research by Ashley McHugh-Chiappone, Harunobu Coryne and Yoryi De La Rosa

Correction: A prior version of this article inadvertently excluded Nest Seekers International from the new development unsold units ranking. They ranked No. 10 with $353.7 million in listings. The combined value of unsold listings by the top 11 firms is $35.94 billion.