Do real estate brokerage firms have any intrinsic value?

nicolebeauchamp

Well-known member
I have been saying for a while that I foresee big firms cutting commission splits.
My friends in other markets have always marveled at what splits are like here.I think the pandemic lead a few more people to leave larger brokerages, then you have some newer models finally in this market. I thing the challenge is, many firms have cut back on the services, but not necessarily increased splits - with more teams now as well, I think there is alot of change to come -before the possibly/looming regulatory changes coming around ht econrer
 

David Goldsmith

All Powerful Moderator
Staff member

Corcoran shopping its biggest franchise​

Corcoran Global Living’s West Coast expansions doubled headcount since 2020 launch​


Corcoran Global Living is on the market.
The Corcoran Group is shopping its inaugural — and biggest — franchise less than three years after its formation, according to an internal senior executive. The executive said Corcoran will execute a direct deal if it can’t find an outside buyer.
News of the offering comes after more than two years of aggressive growth by Corcoran Global Living, which formed in February 2020 when Zephyr Real Estate, a San Francisco firm, combined with Nevada-based Oliver Luxury Real Estate.
It began expanding almost immediately, purchasing a Northern California firm in August 2020, a Los Angeles firm in November of that year, a Beverly Hills brokerage in May 2021 and a Bay Area firm earlier this year. The acquisitons grew Corcoran Global’s headcount to more than 1,000 brokers, compared to 450 at the time of its inception.

Rumors had been circulating in recent weeks that the firm was going out of business. In response to an inquiry on the matter, a Corcoran Global Living executive said the brokerage is reconsidering the extent of its office footprint.
The affiliate had 80 offices in April, up from its initial 13. Corcoran Group had a total of 122 franchise offices at the end of 2021, according to SEC filings, divided among 23 franchises.
“Like many brokers with the shifting real estate market, we are in the process of evaluating our office space footprint in Southern California,” said chief operations officer Matt Borland. “We are not closing our doors.”
The brokerage did not respond to a request for comment regarding its impending sale.
Corcoran’s parent company Anywhere, then known as Realogy, decided to franchise the Corcoran brand in 2018 amid diminishing margins and slow growth for legacy firms.
The cost of opening a Corcoran franchise at the time was between $153,000 and $518,000, according to documents filed with the Federal Trade Commission. Franchisees paid Corcoran 6 percent royalties initially, and were required to contribute between 1 percent and 0.5 percent of gross revenue to marketing.
 

David Goldsmith

All Powerful Moderator
Staff member
Cross posted from this thread:
All Real Estate brokerages profit from the "float" - funds they receive from commissions collected but the haven't paid agents their splits yet. Bellmarc and Sopher were notorious for being slow payers so they could extend their float. They say their cash position is $431 million, but just 2 weeks of float on $6.4 billion revenue is about $250 million.
I'm not surprised at all to see any brokerage firm slow paying agents in the current market slowdown. In this new case against Corcoran Global Living the complaints remind me of the bankruptcy case where I was brought in to be an Expert Witness. LBKaye International Realty had 2 divisions. The residential division becoming a Prudential franchise in 1993. Eventually the companies split, with most assets (including as claimed by agents who had not been paid: their commissions) to the commercial division, and the liabilities to the residential division which declared bankruptcy.

My point being that I think many agents are under the delusion that owners/management at large firms are their best buddies and "will always have their backs." In reality they will do what is in their own best interests and when the chips are down will cut agent's hands off at the wrists if they try to reach for them. See Robert Ringer's "Three Type Theory" in his book Winning Through Intimidation.

Corcoran Global Living CEO awash in lawsuits amid agent pay delay
Agents at Corcoran Global Living have waited on hundreds of thousands of dollars in late commissions thanks to the alleged fraudulent behavior of CEO Michael Mahon, whose leadership has reportedly brought the company so close to the brink of financial disaster that it has failed to keep the lights on and put leases in default at some offices, according to lawsuits and agents who spoke to Inman.
The worsening crisis at the company may also be driving agents away at a critical moment for the broader industry when agent ranks are shrinking and competition for talent is more fierce than ever.

In total, three separate lawsuits have been filed this year. Plaintiffs in the cases include Jessie Rodriguez, Corcoran Group LLC (in this case, a countersuit to a lawsuit initially filed against them by Mahon) and Brighton Way LTD. And collectively, they allege fraud and breach of contract by Mahon, and paint a picture of a company teetering on the edge.
In addition to the lawsuits, four agents told Inman they experienced first-hand, weeks-long delays in getting paid their commissions beginning around April 2022, when normally they received wires for sales within two or three days of closing. Moreover, a member of the management team at one of the affiliate’s Southern California offices, who spoke to Inman on the condition of anonymity, estimated that over the course of the past several months agents have been missing hundreds of thousands of dollars in commissions from the affiliate — which now boasts approximately 2,600 agents across more than 70 offices, making it Corcoran Group’s largest affiliate.
When Inman reached out to Corcoran Global Living for comment, the company attributed the agent pay issues to the changing market.
“Like most brokerages, the shifting market over the last few months has caused cash flow challenges,” Chief Operating Officer Matt Borland said in an emailed statement. “This has impacted some of our regions, and we have made fundamental changes to our accounting processes to ensure they don’t recur. Our finance team is actively working towards resolving any lingering delays as well.”
When Inman reached out to Corcoran Group LLC, the company declined to comment, pointing Inman to Corcoran Global Living’s press contact and noting the affiliate is independently owned and operated from Corcoran Group.

‘Bad management’ or ‘outright stealing’: Agents notice something amiss​

Ultimately, the situation raises questions about Corcoran Global Living’s future, and about how companies treat agents amid a historic housing downturn.

And indeed, agents who spoke to Inman began feeling like something was wrong months ago.
“I started noticing in the springtime, that instead of my wire being in my bank account two to three days later it would take a week,” an agent from one of the affiliate’s Southern California offices, who is not involved in any litigation and wished to remain anonymous, told Inman. “And then I started to overhear phone calls to some of the admins in my office that were rather unpleasant, like, ‘Why has it been two weeks since I’ve been paid?’ That was the start of it, and it never really changed.”
After the agent had pressed the admin for more details about late payments, the administrator explained that corporate offices at Corcoran Global Living had said that due to changes in the accounting department, agents would only get paid twice a month moving forward, the anonymous agent told Inman.
But the payment delays escalated from there, making it clear more was going on in the accounting department than policy shuffling.
“Over the summer is when I had my biggest issue and wasn’t going to get paid for a few weeks,” the same agent told Inman. “So my broker covered my check and waited a month or so for corporate to reimburse him.”

A few months later, the agent left Corcoran Global Living.
Yet another agent who spoke on the condition of anonymity from a different Southern California office, who is also not involved in any litigation, told Inman that as of Nov. 1, pay was yet to come for the source’s last three transactions, and the source would likely be separating from the company soon. When Inman checked in with the agent again the week of Nov. 14, they had departed from the brokerage — and still had not been paid for those three transactions.

Aaron Juarez, an agent who was working at the Corcoran Global Living Claremont North office but recently left the company, told Inman he did not receive his commission checks for over a month after closing. He never received a clear answer about what was happening at the company, whether it was “either bad management on their part or outright stealing,” for instance, but said things seemed to be “going in the wrong direction,” which is what pushed him to leave, he said. Juarez is also not involved in any related litigation.
“A commission check comes in and Realtors want 70, 80, 90 percent of it, and the whole 100 percent goes to the broker, the broker comes to the agent, takes their percentage, says, ‘We borrowed it, I should have it in a couple days, it’s no big deal,’ ” Juarez said.
“But if it takes 30, 40, 50 days, that’s a little ridiculous for the brokerage to be holding onto the majority of your commission for something that should be, if everything’s on the up and up, [quick] … If this is happening to other agents, I think there’s something wrong. Realistically, it could put somebody out of business or at least hurt their business not having funds to pay, not only their household bills but anything they have as far as business bills.”

Inman asked both attorneys and agents involved in the situation how many individuals might have had their commission payments delayed. However, those who spoke to Inman for this story were not willing to speculate how widespread the alleged problem might be.
Out of approximately 40 Corcoran Global Living agents Inman has reached out to across California, four located in Southern California reported that they had experienced significant pay delays, and five located across Southern and Northern California said they had not experienced any problems getting paid on time. Several did not respond to Inman’s queries.
In any case, as of September one of the anonymous sources told Inman that the utilities in the source’s Corcoran Global Living office and some others in the region had been shut off because the affiliate’s corporate offices, which had taken over paying for rent and utilities at the beginning of their contract, had neglected to pay the office’s bills.

A crisis years in the making​

Corcoran Global Living was launched in early 2020 when Mahon’s company ELI Realty entered into a franchise agreement with Corcoran. The agreement involved Corcoran giving loans to ELI Realty to purchase independent brokerages, which would be geographically grouped and made into separate franchises.
At that time, independent brokerages Oliver Luxury Real Estate of Lake Tahoe and Reno and Zephyr Real Estate of San Francisco joined to form Corcoran Global Living’s first franchise under the leadership of Mahon. It brought together 13 offices and 450 real estate agents across these regions in California and Nevada. At that point, Mahon had held a number of leadership positions at other brokerages in years past including as president of both Midwest-based indie brokerage HER Realtors and Southern California’s First Team Real Estate.

Over the next few years, Mahon rapidly grew Corcoran Global Living by acquiring and forming franchise agreements with other independent brokerages across Nevada, California and central Ohio with promises of a profitable business model and fruitful partnerships. By early 2022, the company had about 2,600 agents located in more than 70 offices throughout these regions.

A ‘smokescreen’: The wave of lawsuits​

Mahon’s troubles officially began on June 21 when he sued Corcoran Group via his company ELI Realty Investments LLC. His claims included, among other things, that the parent company had provided his affiliate with faulty transaction reporting technology that cost his firm hundreds of thousands of dollars.
A person who previously worked at Corcoran Global Living, and who spoke with Inman on the condition of anonymity, said they believed this claim to be baseless and essentially a way for Mahon to cover the tracks of his own financial mismanagement and fraud that cost agents time and money, and led Corcoran Global Living franchisees into debt.
Corcoran Group countersued on June 27, stating that these claims were a “smokescreen” for fraud being committed by Mahon and his companies. The countersuit further alleges that after taking out loans from Corcoran Group to purchase brokerages and create new franchises, ELI Realty used some of the loan proceeds — without Corcoran Group’s knowledge — to engage in fraud, including paying bonuses to Mahon, Pamela Mahon (Mahon’s wife and Corcoran Global Living’s vice president of business development in California, Nevada and Ohio), and others.
The suit also accuses Mahon of selling his company’s future receipts at a discount to a company called Libertas Funding while cutting his franchisees out of the loop.

“This controversy has little to do with the allegations contained in the Complaint — which are a smokescreen,” Corcoran Group’s counterclaim states. “This matter really involves the unlawful (and often clandestine) conduct of ELI Realty and its current management.”
Jessie Rodriguez and several other brokers who entered into franchise contracts with Mahon filed a second suit against Mahon on Sept. 26. This suit alleges Mahon deliberately deceived the brokers about the financial state of his company. The suit accuses Mahon of both fraud and breach of contract.
Among other things, the suit describes delays to agent pay, resulting in agent departures — corroborating accounts from agents who spoke to Inman — and mentions Corcoran Global Living’s corporate offices’ failure to pay basic bills, like rent and janitorial services.
The suit also alleges that Mahon commingled funds of Corcoran Global Living’s Southern and Northern California offices, diverted funds to himself and his associates, sold future earnings at a discount to Libertas Funding without consulting franchise owners to cover his own debts and used his corporations as shells for his own financial purposes.

The primary plaintiff, Rodriguez, is a broker and was the owner of Cal American Homes, which was founded in 2005 prior to joining Corcoran Global Living. He entered into a franchise contract with Mahon to become a franchisee of Corcoran Global Living in June 2021.

“Most alarming, in April 2022, despite receiving a cash infusion from Libertas on the 13th of the month, Defendants missed several payments to various real estate agents from escrows — a betrayal that none of the plaintiffs would ever let happen in their own businesses,” the lawsuit states. “Plaintiffs began losing real estate agents, the lifeblood of their businesses. This also resulted in severe reputational harm.”
Finally, Brighton Way LTD sued Mahon on Sept. 30 as Corcoran Global Living [allegedly] continued to fall into financial ruin and was unable to pay rent on its offices in full. Brighton Way is a commercial real estate company that owns offices Mahon’s firms use.
Brighton Way’s suit accuses Mahon of breaking the terms of his lease by not paying the full amount of rent starting at the beginning of September. The suit says Mahon owes Brighton Way over $107,000, but that amount continues to increase as he’s unable to make full rent payments.

A rocky road ahead​

As for the company’s future, a few sources suggested that bankruptcy may be in the cards for Corcoran Global Living at this point, with no foreseeable bailout option for its current debts, having been unable to come to an agreement with Corcoran Group, according to court documents.
“I feel like there’s going to be a battle,” one agent, who spoke on the condition of anonymity, told Inman. “They’re probably going to fire all their employees here pretty soon, file for bankruptcy, and then probably come back and do it all again someday [with a different company].”

However, on Monday, The Real Deal also reported that a Corcoran Group internal senior executive told the news outlet that the company is shopping the affiliate around. The source said if the company fails to find an outside buyer, it will execute a direct deal.
A termination of Corcoran’s franchise agreement with ELI Realty is also a possibility on the horizon. Following ELI Realty’s sale of the company’s future receipts to Libertas Funding (which was outside the bounds of ELI Realty’s contract with Corcoran) Corcoran Group demanded that the company and its franchisees immediately pay back their loans with Corcoran, but have yet to receive payment.
No decisive action has been taken to terminate their franchise agreements as of yet, but in its counterclaim, Corcoran notes it reserves the right to take additional action against ELI Realty and its franchisees, including terminating their contracts.

A wave of defections

Whatever happens to Mahon’s companies, the crisis couldn’t have come at a worse time. Thanks to an ongoing downturn in the housing market, agents are expected to leave the industry — which in turn will make already fierce competition for talent even more intense.
It’s unclear how many agents might have left Corcoran Global Living over the firm’s various struggles. But the sources who spoke to Inman noted that Rodriguez left Corcoran Global Living shortly after filing the lawsuit against Mahon, brought his agents who originally moved to Corcoran Global Living back with him, and is now operating under the Cal American Homes brand once again.

Anthony Morel, who joined Corcoran Global Living as an agent with his brother, Danny Morel (a plaintiff in Jessie Rodriguez vs. Michael Mahon) in December 2020 and then became a regional vice president of education and a coach, has also since left Corcoran Global Living and launched Pak Realty, a revenue-share model real estate company.
All of this is happening against the backdrop of a general belt-tightening in the industry. Despite a tough third quarter which saw profits down year over year and losses growing at many real estate companies, some brokerages are still managing to increase their agent count now. Compass, eXp Realty, RE/MAX, Fathom Realty and Keller Williams all grew their agent ranks in the third quarter of 2022.
 

David Goldsmith

All Powerful Moderator
Staff member

Anywhere announces more layoffs, shutters iBuying​

Anywhere Real Estate has kicked off the new year with layoffs.


The company did not say how many employees were laid off, but in an SEC filing Tuesday said its workforce has been reduced by roughly 11 percent since the end of June. The company also said it is ending its iBuying business, RealSure, following in the footsteps of Zillow and Redfin.

Anywhere is the parent firm of Corcoran, Coldwell Banker, Century 21, and Sotheby’s International Realty, and had nearly 200,000 agents across the U.S. as of last year.

“Let me start with the hardest but most important thing: our people. Yesterday we said goodbye to a number of our great people whose roles were eliminated,” Anywhere CEO Ryan Schneider said in a company-wide email Tuesday that it shared with The Real Deal.

Anywhere has been on a cost-cutting campaign since 2019, according to materials previously released by the company. The company announced in late 2021 it planned to cut expenses by $70 million by the end of 2022 and by $300 million through the end of 2026. Anywhere did a round of layoffs in August. The company’s stock is down nearly 60 percent over the past year.

“We have years ahead of us where we have still additional cost savings that we can go get through efficiencies, automation, more systems integration, things like that,” Schneider said during the company’s first-quarter earnings call last year.

“We believe that industry dynamics and customer demands will require simplified and more integrated and digitized offerings, systems and support,” Anywhere said in Tuesday’s filing. “Delivering the company’s business model more digitally is an increasing part of our improving the consumer experience and our ongoing cost focus.”

The filing comes days after Compass announced its third wave of layoffs since June 2022.

Anywhere is the latest to end its iBuying operations, after Zillow and Redfin bowed out of the business in the last year. Opendoor, the company that pioneered the model, said in November it lost $928 million in the third quarter of 2022.
 

David Goldsmith

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Staff member

Watch: 3 resi brokerage shakeups worth knowing about​

Manifest Destiny has given way to focus on the bottom line​


One of the fundamental laws of the universe — what goes up, must come down — is playing out in the residential real estate market.
The heady times of 2021 gave way to the harsh reality in the latter half of 2022, when the market fell back to Earth, sending shockwaves through some of the industry’s biggest brokerages.
Real estate’s own version of Manifest Destiny — seemingly boundless expansion of offices, headcount and market share — has given way to streamlining operations and focusing on the bottom line.

Naturally, the tremors reached firms’ C-suites, with several notable recent shake-ups serving notice of how the industry plans to approach 2023.
Last month, Ryan Gorman, a widely respected industry leader, was pushed out as CEO of Coldwell Banker, a subsidiary of Anywhere Real Estate.

Gorman’s exit is especially notable not only for his 20 years of being affiliated with Anywhere, but also for how he’s being replaced — or rather how he isn’t being replaced.
Instead of naming a successor, Anywhere is divvying up Gorman’s role among other top executives, while saving on CEO compensation. Gorman made $3.5 million last year.

In the first episode of the Resi Rundown, The Real Deal’s Hiten Samtani breaks down three major residential brokerage shifts — at Coldwell Banker, eXp, and Opendoor — worth knowing about and what they mean going forward.

user-matching
 

David Goldsmith

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Startup resi brokerages leading NYC firms’ growth​

Casa Blanca, eXp top brokerage growth in 2022: Corofy​

David was hot on Goliath’s heels in 2022.
Despite a downswing in the market, several boutique and startup New York City residential brokerages outpaced growth at the city’s larger firms last year, according to Corofy’s annual brokerage report.
“A lot of these boutique brokerages have a set of clients, a regular clientele, so they felt a little bit less affected by the lower transaction volume that was impacting all the major players,” said Corofy CEO Eddy Boccara. “The question for the past three years was: Is there room for boutique firms to exist?”
Casa Blanca, which bills itself as a “mobile-first” brokerage, grew its headcount by 360 percent, though the startup did so by adding just 58 brokers, placing it in ninth place in terms of new members.
Serhant had the second fastest growth rate and added the third most brokers, according to Corofy. The two-year-old brokerage was the top-growing firm among the industry’s big names, more than doubling its headcount by adding 128 brokers.
NY-1-1-705x439.jpg

(Corofy)
Founder Ryan Serhant said it’s evidence that his firm’s brand-centric approach is resonating with brokers, he said the company has no growth teams or recruiters.
“I haven’t even started focusing on growth, to be honest,” he said.
Two boutique firms, Brooklyn Group and Platinum Properties, made their debut in the top 10 with 42 percent and 34 percent headcount growth for seventh and eighth place, respectively.
NY-2-705x439.jpg

(Corofy)

Highline Residential had a banner recruitment year no matter how you slice it: It added 136 brokers and had the fifth best growth rate. The only NYC brokerage to add more agents last year was eXp, which brought in 382.
“Our recruiting process is simple, we show agents our technology and let them decide if they want to continue the conversation,” Highline President Bilal Khan said. “Experienced agents are offered a mentorship role, and the ability to mentor inexperienced agents for a percentage of their earnings.”
Ny-3-705x439.jpg

(Corofy)
The city’s top major players, Douglas Elliman, Compass, and Corcoran remained in the top three spots in terms of agent count. Compass finished fourth in terms of headcount growth, with 117 added agents, and Compass Greater NY fifth, with 92. The brokerage saw its growth rate drop to just over 4 percent, down from 9 percent in 2021 and 24 percent in 2020.
The Agency made its debut in New York City rankings at 17 after acquiring Triplemint in May 2022.
Casa Blanca scored the top spot for retention at over 93 percent, followed by Serhant in second place at 89 percent.
Looking ahead to the rest of 2023, Boccara said he expects boutique brokerages to keep pulling brokers from major players.
“I think we’re gonna see them gaining more and more market share,” he said. “A smaller environment helps agents be a big fish in a small pond.”
 

David Goldsmith

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Staff member

Brokerage bloat: Analysis ranks Compass, Anywhere among least efficient

Compass and Anywhere are among the least efficient publicly traded residential brokerages, an analysis by Mike DelPrete has found.

As residential brokerages look to cut costs, those two may have to make the deepest cuts, the influential real estate tech observer concluded.

DelPrete, a scholar in residence at the University of Colorado Boulder and an investor in real estate startup Side, looked at how brokerages’ revenue compared with their operating expenses.

He found eXp to be one of the most efficient firms: It generates $10.86 in revenue for every dollar of operating expenses, versus Anywhere’s $3.84 and Compass $3.71.

Compass, which by DelPrete’s count has laid off 1,700 employees since June, is looking to trim $600 million from its annual budget. Compass has not released its layoff total. Anywhere was the only firm DelPrete examined with operating expenses over $400 million at the end of the third quarter.

“Cost reductions limit a company’s ability to invest in future growth opportunities,” DelPrete said. “Other companies operating more efficient, low-cost operating models are under less pressure to make big cuts — and may be better placed to invest in future growth.”

According to DelPrete’s analysis, Compass trimmed less than $100 million from its budget between the start of its cost-cutting program announced in August and the end of the third quarter.

It’s unclear how much progress Compass has made since then because it hasn’t released fourth quarter earnings, and its most recent round of layoffs just happened this month. The financial impact won’t be known until the company releases its first quarter earnings in April.

Anywhere and Compass declined to comment.

Compass said after its January layoffs that it wouldn’t need to cut headcount further to reach its cost-cutting goals. The brokerage has sought to reduce expenses to conserve cash and become profitable.

Anywhere, which has been on a years-long odyssey to cut expenses, also announced a round of layoffs earlier this month and let Coldwell Banker CEO Ryan Gorman go in December.

Other companies have cut much higher percentages of their staff. Ribbon, a homebuying startup, has laid off 85 percent of its employees since last June, and Flyhomes, Knock and Homeward have all laid off more than Compass’ 40 percent. Anywhere slashed about 10 percent, according to DelPrete.
 

David Goldsmith

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The Agency becomes the latest firm to undergo staff cuts​

The boutique brokerage cut 4% of its staff last week in a new round of layoffs
February 3, 2023, 11:06 am By
The Agency is the latest real estate brokerage to be hit by the layoff bug in 2023. According to the firm, The Agency laid off 4% of its work force, or fewer than 15 of its staff members, last week.
“Due to the challenges presented by the current economic climate, we made the difficult decision to reduce less than 15 members of The Agency’s staff this week. We are not immune to the economic environment that all companies, especially real estate companies are facing right now,” Mauricio Umansky, the CEO of The Agency, wrote in an emailed statement.
“We would like to express our deepest gratitude for the contributions of all our employees. While this decision was not made lightly, we believe this positions us for future success. The Agency continues to make efforts to be fiscally responsible and is fundamentally committed to profitability and long-term, sustainable growth.”
Based on LinkedIn posts from former employees of The Agency, this appears to be the firm’s third round of layoffs in the last six months. Employees impacted by the recent rounds of layoffs held administrative and IT positions.
The start of the year has been a tough one for many firms in the real estate industry. Earlier this week, Wells Fargo announced that it had cut 140 jobs due to its exit of the correspondent channel, and in January, Anywhere Real Estate underwent another round of cuts — bringing its head count down 11% since the end of June 2022.
Meanwhile, while Compass announced its fourth round of layoffs since June 2022 just a few days into the new year.

 

David Goldsmith

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Staff member
Tyler Whitman pitches The Agency franchise in the Hamptons
Former “Million Dollar Listing: New York” star’s pitch asks $1M for 10% stake

Less than one year after The Agency made its New York City debut, Tyler Whitman is looking to set up shop under the brokerage even farther east.
The broker, a founding member of Triplemint who joined the Los Angeles-based brokerage when it acquired his former firm, is circulating a pitch deck to solicit investors to open a Hamptons franchise of The Agency.

The pitch, according to a copy obtained by The Real Deal, asks for $1 million in exchange for a 10 percent stake. Partners will receive 50 percent of the profits until their investment is paid back, which Whitman estimates will take 14 months.
“I might do it with my own money,” said Whitman, who wouldn’t be personally handling transactions in a potential franchise. “But it would certainly be advantageous to align with the right partners that could really help fuel growth.”

The deck places the franchise fee at $45,000 with a 5 percent royalty fee for founding members, reduced from 7 percent. The Agency, citing a disclosure document filed with the FTC, clarified to TRD its royalty rate is 6 percent.
The pitch estimates $250,000 of legal, office and licensing expenses and sets a goal of a minimum working capital balance of $500,000 at the end of each quarter.
Whitman said his goal is to open an office this summer.
The deck estimates a year one with an income floor of $10 million, an estimated goal of $20 million, equivalent to 6 percent market share, and a “stretch goal” of $30 million, or 8.5 percent market share.

If Whitman’s pitch finds success, he’ll be in good company among The Agency’s franchise model, which has been the platform for 17 new offices since 2021. After the two-year expansion push, the brokerage made cuts among its corporate ranks earlier this month, laying off 15 people, or 4 percent of its staff.

The Agency said at the time of its Triplemint acquisition last year that it had raised $35 million in growth capital for a valuation of $350 million.
Sources told TRD at the time of the layoffs The Agency is fundraising again. Whitman denied that his franchise bid is part of a wider effort to raise money.
The Hamptons market has been constrained by low inventory since the pandemic sent wealthy New Yorkers east from the city, but Whitman said his biggest challenge is finding affordable office space.
“When the market is slower is when a lot of agents are thinking about what a potential move could look like for them,” he said. “I think [the market] will be down for the next year, maybe two, but that’s going to give me the opportunity to potentially get the talent I need.”
 

David Goldsmith

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40 agents in a 1,000SF office? JI Sopher seemed crowded when we went over 30 in more than twice that amount of space.
https://therealdeal.com/

Bond New York heads to Brooklyn​

Brokerage set for borough debut with 40-agent Williamsburg office

Bond New York is headed to Brooklyn.
The brokerage is opening its first location in the borough on the border of the Williamsburg and Greenpoint neighborhoods, where co-founder Bruno Ricciotti said much of the company’s business unfolds.

“We do a tremendous number of sales transactions right here in North and West Brooklyn,” Ricciotti said. “We actually have even more buyer side Brooklyn business than we do in Manhattan.”
Bond plans to have 40 agents in the 1,000-square-foot office on the corner of Lorimer Street and Richardson Street. The lease term is for five years.

Walter Steffen, formerly with Corcoran, will head the brokerage’s first office in the borough. A Brooklyn native, Steffen currently oversees about 80 buildings in the area.
Bond has four other offices, located in Midtown, Upper East Side, Union Square and Upper Manhattan.
The brokerage previously had an office in Chelsea but shuttered the location in 2019, citing “management changes.” Just three months later, the firm acquired a 56-person team from Midtown-based brokerage Caliber Associates.

The announcement follows a streak of record sales years in Brooklyn.

The borough gained momentum toward the end of 2020 as buyers flocked to more spacious options in the wake of pandemic lockdown orders. In 2021, Brooklyn’s top 10 brokerages combined for $8.8 billion in sales — more than double the sales recorded in 2020, according to The Real Deal’s ranking of residential brokerages in the borough.
The borough kicked off last year with the same unparalleled sales streak as more homes selling in the first three months of 2022 than in any quarter since 2006. High mortgage rates and low inventory has since cooled the market.
Bond didn’t crack the top 20 residential brokerages in Brooklyn in 2021, but ranked 21st among the top-producing brokerages in Manhattan with $55 million in closed sales across 71 deals. Compass took first place in Brooklyn with $2.7 billion in sell-side transactions across 2,060 deals, followed by Corcoran, with $2.69 in closed sales across 1,940 deals.

 

David Goldsmith

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Staff member
https://therealdeal.com/

CushWake to cut costs as profit plunges 80%​

Commercial brokerage hopes to save $90M this year

Cushman & Wakefield is joining the cost-cutting parade.
The commercial brokerage Thursday reported an 80 percent drop in fourth-quarter profits from a year ago, to $29.8 million, and said it will trim expenses as it grapples with a downturn in transaction revenue.

The brokerage is hoping to save $90 million this year through temporary and permanent cuts, the firm disclosed in its earnings report.
The majority of cuts will be permanent, but the company wouldn’t provide details on the effort — saying only that it would span “all costs and all geographies.”

“So rather than just going in and by just doing temporary cuts or randomly taking up costs, we’ve been very, very focused to make sure that the business stays strong and we continue to drive our efficiency,” Cushman & Wakefield’s CFO Neil Johnston said.
Expense-slashing has become commonplace for public and private companies since the Federal Reserve began pushing up interest rates and investors started demanding firms cut down on spending.
Johnston said the brokerage identified cost-cutting measures late last year and has “already begun executing on these initiatives.”
“We expect these cost savings to more than offset any inflation in our semi-variable and fixed cost base,” he said. “However, they will not completely offset the temporary margin contraction from the anticipated brokerage revenue decline, as we believe it’s important to maintain a strong position to grow share in the recovery.”

Layoffs appear to be one way the firm is looking to save money. The company’s severance-related costs increased year-over-year by 16 percent in the fourth quarter, according to its earnings report.

Cushman’s cost-reduction strategy comes as a dropoff in capital markets and leasing revenue sapped its profits in the final three months of the year. The firm saw net income plummet by 80 percent and revenue fall by 8 percent largely because of lower brokerage activity, particularly in capital markets.
Capital markets revenue dropped by 53 percent and leasing revenue declined by 13 percent, which the brokerage said was representative of a “less constructive macroeconomic environment” caused by higher interest rates and fewer transactions.
For the year, the company’s profit decreased by 21 percent and capital markets revenue fell by 12 percent. But leasing revenue was up 13 percent last year thanks to continued industrial strength and an improvement in the office market during the first nine months, according to the firm. Overall revenue rose by 8 percent.
Despite the downturn in brokerage activity, that segment is “very light cost” and might not be the most ripe for savings, Cushman & Wakefield’s CEO John Forrester said.
“If you are going to drive very, very substantial cost savings to try to cover all the decrement of revenue falls in transactions, you’d actually have to cut hard into the infrastructure that’s driving the growth on the services side,” Forrester said. “So the key for us is to ensure that we focus on stripping out inflation that’s coming through from our own service suppliers and in the work that we do and allow ourselves to maintain a world-class workforce.”

The brokerage expects investment sales and leasing revenue to remain slow in the first half of 2023, but to improve as the year progresses. Forrester said a lot of capital is ready to be deployed but will largely remain on the sidelines until investors have more clarity.

 

David Goldsmith

All Powerful Moderator
Staff member

Anywhere loses $450M as execs foresee “volatile” 2023​

Real estate giant posts Q4 loss, predicts market will be “meaningfully lower” than 2022

Anywhere Real Estate finished the fourth quarter with a net loss of $453 million as executives theorized the slowed housing market may be near its bottom.
The parent company of Corcoran, Coldwell Banker, Century 21 and Sotheby’s International Realty finished last year with a net loss of $287 million. The company posted an adjusted net income of $32 million in 2022 and its operating EBITDA — earnings before interest, tax, depreciation and amortization — was $449 million for the year.

It finished the quarter with a net loss of $453 million and a net adjusted loss — before expenses like restructuring charges, debt payments and investments — of $93 million. Quarterly EBITDA was $12 million.
The company brought in $6.9 billion in revenue last year, a 13 percent annual decline it said was driven by fewer home sales and the sale of its title insurance underwriter. Revenue last quarter was $1.3 billion, down 33 percent year over year in line with transaction volume decline, according to Chief Financial Officer Charlotte Simonelli.

Chief Executive Officer Ryan Schneider said the company expects market volume in the first quarter “to be down around 30 percent” from last year and while those year-over-year quarterly comparisons could “improve throughout the year,” this year’s market will be “meaningfully lower” than 2022.
“Most importantly and potentially excitingly, right now we may be at or near a bottom already,” Schneider said. “We’re all seeing a number of the housing indicators in the macro economy exhibit more stability.”
Despite the market downturn, Anywhere realized $150 million in cost savings and projected another $200 million in savings this year, with $50 million resulting from measures taken last year.
The projected $350 million in savings by the end of the year put it far ahead of the timeline executives laid out in late 2021, when they projected savings of $70 million by the end of 2022 and $300 million by the end of 2026.

Anywhere conducted an initial round of layoffs in August and another in January, when it also announced the closure of its iBuying business.

Anywhere’s agent count grew 4 percent last year and the company says it posted record retention rates, but a representative declined to provide specific numbers.
“We were able to recruit at better economics than in the past few years,” Schneider said.
Commission costs rose in the fourth quarter as top-end agents with more favorable splits represented a larger share of the company’s sales, Simonelli said. The company expects the trend to continue this year.
Commission splits last year rose 203 basis points annually, but Simonelli said 2023 splits are expected to look like last quarter, when they were up only 130 basis points year over year.
“Even with a tough and likely volatile 2023 market ahead I’m increasingly optimistic about our position and the opportunities in front of us,” Schneider said.

 

David Goldsmith

All Powerful Moderator
Staff member

JLL eyes layoffs as profits tumble 59%​

Commercial brokerage plans to cut costs by $125M this year while waiting out market slump

JLL plans to rein in spending as a slowdown in investment sales and leasing activity eats into its profits.
The commercial brokerage is eyeing $140 million in annual savings, about $125 million of which it expects to achieve this year, executives said on an earnings call Tuesday morning. JLL reported a 59 percent decline in net income for the fourth quarter, pulling in $175 million compared to $421 million in the same period last year.

The cuts will largely be made through layoffs, CFO Karen Brennan said. Executives did not elaborate on how many have lost or will lose their jobs, nor which divisions will be most affected.
JLL started trimming its workforce last year, and reported Tuesday that severance and other employment-related costs more than tripled to $44.5 million in 2022, compared to $14.3 million in 2021. Additional restructuring costs are expected this year, executives said.

“We have taken steps to drive operational efficiencies across our business and reduce our cost base,” said CEO Christian Ulbrich. “The cost actions we have taken to date occur across business segments and have been focused on non-revenue generating roles.”
The layoffs come as the brokerage’s capital markets and markets advisory arms have been hampered by a slowdown in property sales and commercial leasing.

Capital markets revenue tumbled 38 percent year over year to $608 million and operating income dropped 57 percent to less than $97 million. Leasing revenue declined 13 percent to roughly $1.19 billion and operating income dropped 34 percent to $127 million.
Investment sales and leasing are expected to remain down through the first half of the year, Ulbrich said, but may bounce back in the second half once interest rates and lending spreads normalize. The brokerage pointed to $386 billion in dry powder sitting in closed-end funds at the end of last year, and a higher than normal amount of expiring office leases that should help bolster its 2023 revenues.

Still, JLL does not appear interested in expansion while it pares down its expenses.
“We’re very happy with the footprint we are having in the different business lines,” Ulbrich said. “We feel that pricing is still very high given the environment, so we have been cautious around M&A for some time now and will continue to be.”

 

David Goldsmith

All Powerful Moderator
Staff member
https://therealdeal.com/national/20...rages-devise-battle-plans-as-profits-plunge/?

Commercial brokerages devise battle plans as profits plunge​

Top firms aren’t yet in the red, but most are aggressively cutting costs
Commercial real estate brokerages are preparing for a rough road ahead as declines in property sales and leasing eat into their profits.
The industry’s major firms expressed optimism on earnings calls this month, assuring analysts that business will rebound in the second half of the year as interest rates stabilize and investors gain the confidence they need to start making deals again.

Until then, brokerages are left to strategize about how to weather what is likely to be a continued slowdown over the next few months. Those gameplans vary. Although none of the top commercial firms lost money in the fourth quarter, most say they plan to drastically cut expenses this year.
CBRE, which saw profits plummet 88 percent year over year in the fourth quarter, is moving forward with a $400 million cost-reduction plan it announced last fall. The firm said it cut about $80 million in expenses last quarter and will look to rein in another $300 million this year. The vast majority of that is expected to be achieved through layoffs.

After a quarter in which its profit dropped 59 percent to $175 million, JLL is eyeing $140 million in annual savings, about $125 million of which it expects to reach this year. The cuts will largely be made through layoffs, but the firm did not say how many have lost or will lose their jobs. JLL began reducing its workforce last year, when severance and other employment-related costs more than tripled to $44.5 million compared to 2021.
“We have taken steps to drive operational efficiencies across our business and reduce our cost base,” CEO Christian Ulbrich said on an earnings call this week. “The cost actions we have taken to date occur across business segments and have been focused on non-revenue generating roles.”
Cushman & Wakefield also joined the cost-cutting parade after the brokerage’s profit tumbled 80 percent to $29.8 million last quarter. The firm hopes to save $90 million this year, primarily through permanent cuts. The company didn’t name specifics, saying only that the reductions would span “all costs and all geographies.”

Like at CBRE and JLL, layoffs seem to be one of those avenues. The company’s severance-related costs ticked up 16 percent in the fourth quarter, and CFO Neil Johnston said the firm identified cost-cutting measures late last year and has already begun implementing them. Still, Johnston said the cuts “will not completely offset” an anticipated decline in revenue this year.

“We believe it’s important to maintain a strong position to grow share in the recovery,” he added.
Colliers, which saw its net income drop 38 percent to $62 million in the fourth quarter, said it expects to “maintain disciplined cost control … with tight management of discretionary expenses.”
“We’re doing our best to manage costs,” CFO Christian Mayer said. “We have highly-skilled operators in the field who have done this before. Three years ago, we lived through the pandemic, and we took a very disciplined approach to cost management. We’re doing the same in this situation.”
Newmark appears to be something of an outlier. Despite its fourth-quarter profit tanking by 93 percent to just $9.3 million, the firm is seizing an opportunity to bolster its agent roster in a market downturn, poaching the nation’s top investment sales team, Doug Harmon and Adam Spies, from Cushman & Wakefield. Newmark sees itself as a buyer, aiming to expand this year by picking up companies with reduced valuations.
“The fundamental foundation of our business is built around talent,” CEO Barry Gosin said. “The best talent in every sector, every vertical, every geography. The more talent that we bring on board, the more we elevate our brand, the more top professionals want to be here. It helps us everywhere.”

 

David Goldsmith

All Powerful Moderator
Staff member
Ranking NYC’s best-selling residential brokerages of 2022

It was the best of times and the worst of times last year for New York’s residential brokerages. The year began on a high carried over from 2021’s record-breaking post-lockdown bonanza, but the spring of hope quickly became a winter of despair as high interest rates froze the market in the third and fourth quarters.
“For the first six months of the year, our business was way up, like most firms’ probably were,” said Richard Ferrari, Douglas Elliman’s New York CEO. “It was the coattails of 2021. And then the slack started coming down.”

As the city’s residential market continued to skyrocket, so did inflation, prompting the Federal Reserve to raise interest rates and, in turn, the cost of obtaining a mortgage. War in Ukraine wreaked havoc on the global economy, and the specter of a recession cast greater uncertainty over the housing market.
By the summer, mass layoffs began, first at mortgage lenders and then at residential brokerages. Compass was among the first to let people go, laying off 10 percent of its workforce in June. It would conduct two more rounds of layoffs by year’s end, but was far from the only firm to do so: Franchise giant Anywhere laid off an undisclosed number of employees, as did white-label brokerage Side.

Manhattan’s top firms hold the line

Despite the market crashing back to Earth around the midpoint of the year, most of the city’s top brokerages improved on their record-breaking 2021 figures, according to an analysis by The Real Deal of closed sell-side transactions for residential properties, excluding off-market deals.
Manhattan’s top five brokerages by sales volume all maintained their spots from last year. Corcoran topped the market again with nearly $6.7 billion in sales in the borough, up from $6.5 billion in 2021.
“We were really prepared for the type of year that ‘22 was,” Corcoran CEO Pam Liebman said. “We knew that ‘21 was a really banner year, and it was not going to be repeated. We didn’t go crazy with overspending or over-hiring like a lot of firms did.”
It was “pretty obvious” that interest rates were likely to rise as the year went on, Liebman added, so Corcoran agents encouraged buyers to move while they still could.

Overall, the top 25 brokerages sold $27.4 billion of real estate in Manhattan, $1 billion more than in 2021.
“We didn’t go crazy with overspending or over-hiring like a lot of firms did.”
PAM LIEBMAN, CORCORAN
Just behind Corcoran was Douglas Elliman, with $6.45 billion in sales, up from just over $6 billion in 2021. Compass rounded out the top three with $6.1 billion in sales, though it was the only brokerage to record over 3,000 transactions.
Compass’ Gordon Golub said the firm emphasized face-to-face meetings, which he believes helped drive business as the market slowed.
Brown Harris Stevens pulled in just under $3.6 billion last year across 1,840 deals, good for fourth on the ranking, though well below the top three.

“The first two quarters was adrenaline left over from 2021,” said BHS CEO Bess Freedman. “[In] May, I started to see less written business, [and] we started to really feel the slowdown.”
Serhant was a new addition among the borough’s top firms. The brokerage, founded in 2020 by former “Million Dollar Listing: New York” star Ryan Serhant, finished sixth with $542 million, nearly doubling its 2021 volume. The upstart came in far behind fifth-place Sotheby’s, which recorded $1.5 billion in volume, but significantly ahead of 2021, when it placed 11th in the rankings.
“We started the company in 2020, that’s when we were born; 2021, we learned to crawl; 2022, we learned to walk, setting up all the systems and processes,” Serhant told attendees at the brokerage’s holiday party in December. “Next year we start to run.”
The Agency made its debut in the Manhattan rankings thanks to its purchase of Triplemint last spring. It finished 11th with $194 million in volume, up slightly from the $189 million Triplemint recorded in 2021. The Agency grew aggressively through its franchise model over the past year, but laid off 4 percent of its staff last month.
Sotheby’s was the only brokerage in the top five to sell less last year than it did the year prior. The brokerage secured $1.5 billion in sales last year, down from $1.6 billion in 2021.

“We’re never looking to have the most agents, and we’re never expecting to be No. 1 on the sales volume list,” said Marissa Ghesquiere, Sotheby’s executive vice president of sales for New York. “What we look to do is to bring on agents who are very strong, very established professionals.”
Corcoran and Douglas Elliman shared the listing on Manhattan’s priciest sale last year. Elliman’s Ryan Stenta and Corcoran’s Carrie Chiang closed the $70.5 million sale of an 8,000-square-foot unit on the 82nd floor of 432 Park Avenue in April. Compass’ Jason Haber brought the anonymous buyer.
Manhattan-top-resi-brokerages-chart-427x1024.jpg

While 2022 ended on a sour note, most believe the market will get stronger in the second half of this year as interest rates peak and buyers and sellers adapt.
“Real estate will always be a cyclical business,” Corcoran’s Liebman said. “[In 2023], we’ll see plenty of transactions, it’s just going to be at a lower pace. Then they’ll pick up again, and you definitely will see some people jumping off the sidelines to take advantage of better pricing.”

Brooklyn steps into the spotlight

If 2021 announced Brooklyn’s arrival as a luxury market to rival Manhattan, 2022 proved it’s here to stay.
While most of the top brokerages in the borough saw a slight decrease in sales last year, the market hovered near 2021’s peak, despite higher interest rates and renewed interest in a reopened Manhattan.
“Even though the numbers weren’t what they were in 2021, I think we saw a lot of bright spots,” said BHS’ Freedman.
The top 20 brokerages in Brooklyn last year combined for just under $9 billion in sales volume, according to TRD’s analysis. The vast majority of that was concentrated among the top 10 firms, which combined for $8.2 billion. Still, that was down slightly from the $8.8 billion they produced in 2021.

As in Manhattan, the top four brokerages retained their positions from the year before. The one change among the top five was Serhant’s ousting of RE/MAX Real Estate Professionals, which fell to eighth.
Ryan Serhant’s two-year-old brokerage was also on the rise on this side of the East River, evidence that his brand-centric pitch has resonated with brokers. The firm ended 2022 with $300 million in Brooklyn sales, almost $100 million more than the year prior.
The camera-friendly executive took to the water last summer to launch sales at the Huron, a luxury development in Greenpoint.
Elsewhere, East Williamsburg had a banner year, evidence that affluent buyers are looking deeper into Brooklyn than they have in the past. Luxury developments have been popping up in the area, despite its proximity to industrial yards in Queens and resultant trucks lumbering through the streets.
“There was a sense of buyers not wanting to be in the hustle and bustle of prime, waterfront Williamsburg or close to Bedford, [but rather] wanting to be in an area that was Williamsburg 10 years ago,” Louis Adler, the co-founder of Real New York, which is leading sales at the Milk Factory condo at 850 Metropolitan Avenue, told TRD last summer. “Restaurants, bars, mom-and-pop shops, I think that’s what’s pulling people in.”

Compass took the top spot in the borough again with $2.5 billion in sales, down from $2.7 billion the year prior.
“Brooklyn and Manhattan is a market that many thought would be impossible for a newcomer to rise to the top of the rankings in less than a few decades,” said Compass’ Golub.
Brooklyn-top-resi-brokerages-chart-450x1024.jpg

He attributed the firm’s success to its end-to-end technology platform.

“Every 12 hours, the pace at which information moves doubles,” he said. “We’re moving at a pace where it’s hard for people to have clarity, so we need to provide that, especially in an industry where the information that’s public is anywhere from three to six months behind.”
Corcoran repeated as runner-up with $2.3 billion in sales, down from just under $2.7 billion the year prior. It also scored the priciest sale in the borough — a Park Slope townhouse that closed for $20 million in July.
“Brooklyn is one of the top destinations in the country,” Liebman said. “To not pay attention to Brooklyn, I wouldn’t be doing my job nor would any of my people. We’re the first Manhattan firm to go to Brooklyn, and I’m glad that we did when we did because all we’ve done there is constantly grow.”
Elliman ranked third again, with nearly $1.5 billion in sales. The firm’s Brooklyn sales volume was on par with its 2021 totals, though it closed about 135 fewer deals.
Single- and multi-family townhouses dominated the borough’s priciest deals, including sales in Brooklyn Heights and Park Slope but also in more far-flung areas like Gravesend.

“Through the years Brooklyn has been in this general upswing,” said Ghesquiere of Sotheby’s. “Coming out of Covid, I think it was really well poised, especially the Brooklyn townhouse market, to grow.”
Nest Seekers finished seventh with $255 million in volume, but brokers Bianca D’Alessio and Mia Calabrese rented a Brooklyn Heights penthouse for a borough-record $40,000 a month — sight unseen. The two “Selling the Hamptons” stars listed the unit for $30,000 a month, a 71 percent increase from what the previous tenants paid.
“I think we got something near 22 inquiries on the first day we put it on the market,” D’Alessio told TRD.
Freedman said BHS brokered the sale of a Brooklyn Heights townhouse for $18.3 million, or $3 million above ask.
“Brooklyn is a place that continues to shine, and people do want to go there,” she said.

New kings of Queens

Mom-and-pop shops can still hang in Queens — for now.
While Brooklyn and Manhattan are dominated by the city’s biggest brokerages, Queens is far less conquered.
Though neighborhoods like Astoria and Long Island City are in demand, prices across the borough haven’t caught up to Manhattan and Brooklyn: Queens’ top brokerage last year was Keller Williams Realty Landmark, with $477.77 million in sales across 649 deals. That would have placed it fifth in Brooklyn and seventh in Manhattan.
Elliman ranked second with $358 million in sales, but another independent firm, Winzone Realty, finished third with over $350 million. Elmhurst-based Winzone boasted the largest army of agents in the borough, with 703 active salespeople at the start of 2022, according to a TRD analysis of state licensing data.

Overall, the top 25 firms in Queens combined for nearly $4.2 billion in sales last year, according to TRD’s analysis. Firms got to the top by focusing on the higher end of the market: The average sale price for the top 25 firms was just under $792,000, beating out the borough-wide average of $724,000.
Queens-top-resi-brokerages-chart-448x1024.jpg

But the indies’ days may be numbered. After Elliman, Compass finished fourth with just under $307 million in sales volume, and Golub said the firm has its sights set on Queens.
“We’re always looking to expand into other markets, and that includes Queens, where we’ve opened offices within the last two years, in Astoria and Long Island City,” he said. “Traditionally, Queens has been a market that has dozens of players that operate outside of REBNY and outside of New York City proper … Navigating that is something different than navigating Manhattan and Brooklyn.”
Freedman, whose BHS finished 16th in Queens with $103 million, concurred.

“Real estate is so local,” she said. “I think none of the biggies have gotten a big foothold in the area yet. It’s more familial.”
BHS narrowly beat out Manhattan’s top dog, Corcoran, which finished 17th in Queens with $102 million.
Unlike Compass, Freedman said BHS is not actively focused on expanding its presence in Queens.
“Talk to me maybe in six months, a year, who knows,” she said.
Local player Modern Spaces ranked sixth with $298 million across 271 deals. The Long Island City-based firm has shown a willingness to defend its status as a major player in the borough, suing Compass in 2018 over alleged agent poaching and data theft.

Digital brokerage eXp finished seventh in Queens with $263.4 million in sales.
Elliman notched the top sale in the borough: a Long Island City condo that closed for $4.8 million in June. Nest Seekers — which ranked 14th with $105 million in sales across 107 deals — scored the second-priciest deal, a Hunter’s Point condo that went for $4.5 million.
The city’s largest and most diverse borough has hit a growth spurt over the last few years. The borough’s tallest building — Skyline Tower in Long Island City — is aiming for a $1 billion sellout, with some units priced over $3 million.
“The days of looking at New York City as only Manhattan are over,” Ferrari said.

 

David Goldsmith

All Powerful Moderator
Staff member

Elliman loses $18M in Q4​

Brokerage plans to cut office space and monitor headcount in 2023
Douglas Elliman's Howard Lorber (Getty)

MAR 10, 2023, 11:53 AM
By
Perhaps no other residential brokerage’s financials better illustrate the market’s fall from 2021 to the end of 2022 than those reported in Douglas Elliman’s fourth-quarter earnings.
Elliman’s net loss jumped to $18.4 million in the fourth quarter from $4 million in the previous period and down from a profit of $20.2 million in the fourth quarter of 2021. Its annual net loss was $5.6 million, a sharp turn from a net income of $98.8 million in 2021.

Chairman and CEO Howard Lorber pointed to “significant headwinds” that cut into real estate’s “generational peak in 2021.”
The company posted a consolidated operating loss of $21.9 million last quarter and its real estate brokerage segment posted an operating loss of $15.6 million, both of which were down year over year from a net operating income of $19.2 million.

Last quarter’s adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — was a loss of $17.1 million for Elliman and a loss of $12.6 million for its brokerage segment, down from income of $21.3 million year over year.
Elliman will look to reduce office space, which Lorber said could begin to reduce rent expenses in 2023 “and more meaningfully in the second half of 2024.”
Headcount so far this year is down as a result of “normal attrition,” and the company may not backfill employee positions in the coming year.
The brokerage’s gross transaction volume last quarter was $7.5 billion, a decrease from $12.6 billion in the fourth quarter of 2021. The brokerage’s annual gross transaction volume was $42.9 billion, down from $51.2 billion in 2021.

Elliman’s annual adjusted EBITDA was $15 million, compared to $110.7 million in 2021. The brokerage segment’s EBITDA in 2022 was $34.5 million.

The company finished the year with $163.9 million cash on hand.
Lorber said Elliman grew its broker headcount by 400 last year and had a retention rate of 87 percent. The brokerage expanded into several new markets, including Las Vegas, Washington D.C. and Dallas last year. It also launched a payday loan business last year.
The company’s new development business grew by $3.5 billion in gross transaction value last year, according to Lorber, across the Florida, New York, California, Massachusetts and Texas markets.
New development is “the only place where there is new inventory,” Lorber said, adding the sector presents more flexibility for buyers contending with elevated mortgage rates.
“When you start selling a new development project, it’s generally around three years until the project is finished and closings are happening,” Lorber said. “That gives people that period of time to hope that interest rates, mortgage rates, will be lower during that three-year period.”

 

David Goldsmith

All Powerful Moderator
Staff member
Mike DelPrete
to me
18 hours ago


The Rise of Real​

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A relative newcomer to the industry, the Real Brokerage is growing fast and is one of the few brokerages to materially grow its transaction count in 2022.

Why it matters: In a notoriously slow moving industry, it’s worth tracking the fast movers.

Dig deeper: Real was a big winner in 2022, with its transaction count increasing by 181 percent – 24,000 units – compared to an overall industry decline of 18 percent.
  • On a unit basis, Real was second only to eXp Realty in terms of its growth.
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Like other growing brokerages, the surge was fueled by agent recruitment: Real’s agent count increased 113 percent to 8,200 agents in 2022 (and has since exceeded 10k).
  • Agent count is the most reliable indicator that correlates to transaction count growth.
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Cash flow: There is chatterabout Real’s profitability and ability to sustain itself.
  • During 2022, Real’s cash balance fell from $29 million to $18 million – but that drop includes $10 million in acquisition-related expenses.
  • Outside of acquisitions, the company appears to be close to cash-flow positive.
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What to watch: As we’ve seen with other brokerages, the momentum of Real’s agent recruitment will likely propel the business to continued growth in 2023.

The bottom line: It’s difficult to look at Real and not think of eXp Realty – both companies have similarly favorable agent commission splits and multi-level revenue share schemes.
  • And while future performance is uncertain, Real appears to be in the early stages of an exponential growth phase, driven by strong agent recruitment.
  • A receding tide reveals winners and losers in the brokerage space: The Real Brokerage is on the winning side of the ledger, growing quickly and at an increasingly meaningful scale.

Note: I’ve had coffee with Real’s CTO, but I have no financial stake nor association with Real Brokerage. I’m just looking at the data – and it’s difficult to ignore a fast-moving business in a slow-moving industry.

 

David Goldsmith

All Powerful Moderator
Staff member
Anywhere reported a Net loss of $138 million and Adjusted net loss of $106 million.

ANYWHERE REAL ESTATE INC. REPORTS FIRST QUARTER 2023 FINANCIAL RESULTS​

Anywhere RE Logo (PRNewsfoto/Realogy Holdings Corp.)


News provided by
Anywhere Real Estate Inc.
May 03, 2023, 16:15 ET



MADISON, N.J., May 3, 2023 /PRNewswire/ -- Anywhere Real Estate Inc. (NYSE: HOUS) ("Anywhere" or the "Company"), a global leader in residential real estate services, today reported financial results for the first quarter ended March 31, 2023.
"Anywhere navigated a tough housing market in the quarter and charged ahead to make meaningful progress on our strategic priorities," said Ryan Schneider, Anywhere president and CEO. "Anywhere continues to set our business up for greater growth when the market rebounds, permanently streamline our cost base as we operate differently, and reimagine the agent and customer experience. We are seizing the moment to position Anywhere to capture the benefits of a better environment and lead into the future."
"In the first quarter, we remained focused on what we can control and on our relentless commitment to execution," said Charlotte Simonelli, Anywhere executive vice president, chief financial officer, and treasurer. "This includes our $200 million full year cost savings program and ongoing operational efficiencies, combined with strategic innovation and industry leadership will set our business up to drive results and emerge from this market even stronger."
First Quarter 2023 Highlights
  • Generated Revenue of $1.1 billion, a decrease of 31% year-over-year, largely impacted by homesale transaction volume declines of 31% and the sale of the Title Insurance Underwriter.
  • Reported a Net loss of $138 million and Adjusted net loss of $106 million.
  • Operating EBITDA loss of $52 million, a decrease of $121 million year-over-year (See Table 5).
  • Realized cost savings of approximately $50 million in the first quarter and are on track to deliver $200 million for the full year.
  • Free Cash Flow of negative $120 million vs. negative $275 million for the corresponding quarter last year, with the first quarter being a seasonal use quarter for the business (See Table 7).
  • At March 31, 2023, the Company's Senior Secured Leverage Ratio was 1.00x (See Table 8a) and Net Debt Leverage Ratio was 5.3x (See Table 8b).
  • Anywhere continues to be recognized as an employer of choice for leadership in innovation, diversity, and integrity, recently named one of Fortune's Most Innovative Companies, a Forbes Best Employer for Diversity, and one of the World's Most Ethical Companies for the twelfth consecutive year.
First Quarter 2023 Financial Highlights
The following table sets forth the Company's financial highlights for the periods presented (in millions, except per share data) (unaudited):
Three Months Ended March 31,
20232022 Change% Change
Revenue$ 1,131$ 1,635$ (504)(31) %
Operating EBITDA 1(52)69(121)(175)
Net (loss) income attributable to Anywhere(138)23(161)(700)
Adjusted net loss 2(106)(22)(84)(382)
(Loss) earnings per share(1.26)0.20(1.46)(730)
Free Cash Flow 3(120)(275)15556
Net cash used in operating activities$ (113)$ (233)$ 12052 %
Select Key Drivers
Anywhere Brands - Franchise Group 4 5
Closed homesale sides 150,491217,764(31) %
Average homesale price$ 437,964$ 449,250(3) %
Anywhere Advisors - Owned Brokerage Group 5
Closed homesale sides53,79771,371(25) %
Average homesale price$ 663,223$ 706,282(6) %
Anywhere Integrated Services - Title Group
Purchase title and closing units21,74930,867(30) %
Refinance title and closing units2,1988,068(73) %
_______________
Footnotes:
1 See Table 5 for a reconciliation of Net (loss) income attributable to Anywhere to Operating EBITDA. Operating EBITDA is defined as net income (loss) before depreciation and amortization, interest expense, net (other than relocation services interest for securitization assets and securitization obligations), income taxes, and other items that are not core to the operating activities of the Company such as restructuring charges, former parent legacy items, gains or losses on the early extinguishment of debt, impairments, gains or losses on discontinued operations and gains or losses on the sale of businesses, investments or other assets.
2 See Table 1a for a reconciliation of Net (loss) income attributable to Anywhere to Adjusted net loss. Adjusted net income (loss) is defined as net income (loss) before mark-to-market interest rate swap adjustments, former parent legacy items, restructuring charges, (gain) loss on the early extinguishment of debt, impairments, (gain) loss on the sale of businesses, investments or other assets and the tax effect of the foregoing adjustments.
3 See Table 7 for a reconciliation of Net (loss) income attributable to Anywhere to Free Cash Flow. Free Cash Flow is defined as net income (loss) attributable to Anywhere before income tax expense (benefit), income tax payments, net interest expense, cash interest payments, depreciation and amortization, capital expenditures, restructuring costs and former parent legacy costs (benefits), net of payments, impairments, (gain) loss on the sale of businesses, investments or other assets, (gain) loss on the early extinguishment of debt, working capital adjustments and relocation receivables (assets), net of change in securitization obligations.
4 Includes all franchisees except for Owned Brokerage Group.
5 The Company's combined homesale transaction volume (transaction sides multiplied by average sale price) decreased 31% compared with the first quarter of 2022.
2023 Financial Estimates
Looking ahead to the second quarter of 2023, the Company expects our second quarter 2023 transaction volume to be down around 25% versus prior year.
Consistent with industry forecasts, we still expect quarterly transaction volume comparisons to 2022 to improve throughout 2023, but expect full year 2023 transaction volumes to decline about 15-20% year-over-year. Driven by these projected volume declines, the Company continues to expect full year 2023 Operating EBITDA to be below 2022. However, the Company still expects Free Cash Flow from operations to be modestly positive.
The Company continues to expect to realize cost savings of approximately $200 million in 2023, inclusive of the cost savings realized in first quarter 2023.
These estimates are subject to, among other things, macroeconomic and housing market uncertainties, including those related to rising inflation and mortgage rates, declining affordability and constrained inventory as well as competitive, litigation and regulatory uncertainties.
Balance Sheet
The Company ended the quarter with cash and cash equivalents of $122 million. Total corporate debt, including the short-term portion, net of cash and cash equivalents (net corporate debt), totaled $2.8 billion at March 31, 2023. The Company's Net Debt Leverage Ratio was 5.3x at March 31, 2023 (see Table 8b).
As of May 1, 2023 the Company had $430 million outstanding borrowings under its Revolving Credit Facility.
A consolidated balance sheet is included as Table 2 of this press release.
Investor Conference Call
Today, May 3, at 5:00 p.m. (ET), Anywhere will hold a conference call via webcast to review its Q1 2023 results and provide a business update. The webcast will be hosted by Ryan Schneider, chief executive officer and president, and Charlotte Simonelli, chief financial officer, and will conclude with an investor Q&A period with management.
Investors may access the conference call live via webcast at ir.anywhere.re or by dialing (888) 330-3077 (toll free); international participants should dial (646) 960-0674. Please dial in at least 5 to 10 minutes prior to start time. A webcast replay also will be available on the website.
About Anywhere Real Estate Inc.
Anywhere Real Estate Inc. (NYSE: HOUS) is moving the real estate industry to what's next. A leader of integrated residential real estate services in the U.S., Anywhere includes franchise, brokerage, relocation, and title and settlement businesses, as well as mortgage and title insurance underwriter joint ventures, supporting approximately 1.2 million home transactions in 2022. The diverse Anywhere brand portfolio includes some of the most recognized names in real estate: Better Homes and Gardens® Real Estate, CENTURY 21®, Coldwell Banker®, Coldwell Banker Commercial®, Corcoran®, ERA®, and Sotheby's International Realty®. Using innovative technology, data and marketing products, high-quality lead generation programs, and best-in-class learning and support services, Anywhere fuels the productivity of its approximately 191,600 independent sales agents in the U.S. and approximately 146,600 independent sales agents in 118 other countries and territories, helping them build stronger businesses and best serve today's consumers. Recognized for twelve consecutive years as one of the World's Most Ethical Companies, Anywhere has also been designated a Great Place to Work five years in a row, named one of America's Most Innovative Companies 2023 by Fortune, and honored on the Forbes list of World's Best Employers 2022.
Forward-Looking Statements
Certain statements in this press release constitute "forward-looking statements," including the information appearing under 2023 Financial Estimates. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Anywhere Real Estate Inc. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "potential" and "plans" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.
The following include some, but not all, of the factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements: adverse developments or the absence of sustained improvement in the U.S. residential real estate markets, either regionally or nationally, which could include, but are not limited to, factors that impact homesale transaction volume, such as: continued or accelerated declines in the number of home sales, stagnant or declining home prices, continued or accelerated increases in mortgage rates or a prolonged high interest rate environment, continued or accelerated declines in housing affordability, consumer demand or inventory, or excessive inventory; adverse developments or the absence of sustained improvement in macroeconomic conditions (such as business, economic or political conditions) on a global, domestic or local basis, which could include, but are not limited to, contraction or stagnation in the U.S. economy, geopolitical and economic instability, including as related to the conflict in Ukraine, continued or accelerated increases in inflation and fiscal and monetary policies of the federal government; adverse developments or outcomes in current or future litigation, in particular the incurrence of liabilities that are in excess of amounts accrued or payments that may be made in connection with pending antitrust litigation and litigation related to the Telephone Consumer Protection Act (TCPA); industry structure changes that disrupt the functioning of the residential real estate market; the impact of evolving competitive and consumer dynamics, including that the Company's share of the commission income generated by homesale transactions may continue to shift to affiliated independent sales agents or otherwise erode due to market factors, our ability to compete against traditional and non-traditional competitors and meaningful decreases in the average broker commission rate; our ability to execute our business strategy and achieve growth, including with respect to the recruitment and retention of productive independent sales agents, attraction and retention of franchisees, development or procurement of products, services and technology that support our strategic initiatives and simplification and modernization of our business and achievement or maintenance of a beneficial cost structure; risks related to our substantial indebtedness and our ability, and any actions we may take, to refinance, restructure or repay our indebtedness; our ability to realize the expected benefits from our existing or future joint ventures or strategic partnerships; risks related to our business structure, including our geographic and high-end market concentration, the operating results of our affiliated franchisees, and risks related to a loss of our largest real estate benefit program; disruption in the residential real estate brokerage industry related to listing aggregator market power and concentration; our failure or alleged failure to comply with laws, regulations and regulatory interpretations and any changes or stricter interpretations of any of the foregoing, including but not limited to (1) antitrust laws and regulations, (2) the Real Estate Settlement Procedures Act or other federal or state consumer protection or similar laws, (3) state or federal employment laws or regulations that would require reclassification of independent contractor sales agents to employee status, (4) the TCPA, and (5) privacy or data security laws and regulations; cybersecurity incidents; impairment of our goodwill and other long-lived assets; the accuracy of market forecasts and estimates; and significant fluctuation in the price of our common stock.
Consideration should be given to the areas of risk described above, as well as those risks set forth under the headings "Forward-Looking Statements," "Summary of Risk Factors," "Risk Factors" and "Legal Proceedings" in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2022, and our other filings made from time to time, in connection with considering any forward-looking statements that may be made by us and our businesses generally. We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events except as required by law.

Non-GAAP Financial Measures
This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained in the Tables attached to this release. See Tables 8a, 8b and 9 for definitions of these non-GAAP financial measures and Tables 1a, 5, 6a, 6b, 7, 8a and 8b for reconciliations of the historical non-GAAP financial measures to their most comparable GAAP terms.
Investor Contacts:Media Contacts:
Alicia SwiftTrey Sarten
(973) 407-4669(973) 407-2162
Alicia.Swift@anywhere.reTrey.Sarten@anywhere.re
Tim SwansonGabriella Chiera
(973) 407-2612(973) 407-5236
Tim.Swanson@anywhere.reGabriella.Chiera@anywhere.re
Table 1
ANYWHERE REAL ESTATE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months Ended
March 31,
20232022
Revenues
Gross commission income$ 903$ 1,247
Service revenue127246
Franchise fees6999
Other3243
Net revenues1,1311,635
Expenses
Commission and other agent-related costs723988
Operating286406
Marketing4964
General and administrative12398
Former parent legacy cost, net16
Restructuring costs, net254
Impairments4
Depreciation and amortization5051
Interest expense, net3818
Loss on the early extinguishment of debt92
Other income, net(1)(131)
Total expenses1,3131,590
(Loss) income before income taxes, equity in losses and noncontrolling interests(182)45
Income tax (benefit) expense(46)12
Equity in losses of unconsolidated entities210
Net (loss) income(138)23
Less: Net income attributable to noncontrolling interests
Net (loss) income attributable to Anywhere$ (138)$ 23
(Loss) earnings per share attributable to Anywhere shareholders:
Basic (loss) earnings per share$ (1.26)$ 0.20
Diluted (loss) earnings per share$ (1.26)$ 0.19
Weighted average common and common equivalent shares of Anywhere outstanding:
Basic109.8117.1
Diluted109.8120.4
Table 1a
ANYWHERE REAL ESTATE INC.
NON-GAAP RECONCILIATION
ADJUSTED NET INCOME (LOSS)
(In millions, except per share data)
Set forth in the table below is a reconciliation of Net (loss) income attributable to Anywhere to Adjusted net loss as defined in Table 9 for the three-month periods ended March 31, 2023 and 2022:
Three Months Ended March 31,
20232022
Net (loss) income attributable to Anywhere$ (138)$ 23
Addback:
Mark-to-market interest rate swap gains(26)
Former parent legacy cost, net (a)16
Restructuring costs, net254
Impairments4
Loss on the early extinguishment of debt92
Gain on the sale of businesses, investments or other assets, net(1)(131)
Adjustments for tax effect (b)(12)16
Adjusted net loss attributable to Anywhere$ (106)$ (22)
_______________
(a) Former parent legacy cost is recorded in Corporate and Other and relates to recent developments in a legacy tax matter in the first quarter of 2023.
(b) Reflects tax effect of adjustments at the Company's blended state and federal statutory rate.
Table 2
ANYWHERE REAL ESTATE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
March 31,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents$ 122$ 214
Restricted cash44
Trade receivables (net of allowance for doubtful accounts of $12 for both periods presented)149201
Relocation receivables236210
Other current assets214205
Total current assets725834
Property and equipment, net303317
Operating lease assets, net402422
Goodwill2,5232,523
Trademarks611611
Franchise agreements, net938954
Other intangibles, net144150
Other non-current assets549572
Total assets$ 6,195$ 6,383
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$ 123$ 184
Securitization obligations173163
Current portion of long-term debt398366
Current portion of operating lease liabilities117122
Accrued expenses and other current liabilities517470
Total current liabilities1,3281,305
Long-term debt2,4802,483
Long-term operating lease liabilities357371
Deferred income taxes193239
Other non-current liabilities207218
Total liabilities4,5654,616
Commitments and contingencies
Equity:
Anywhere preferred stock: $0.01 par value; 50,000,000 shares authorized, none issued and
outstanding at March 31, 2023 and December 31, 2022
Anywhere common stock: $0.01 par value; 400,000,000 shares authorized, 110,356,383
shares issued and outstanding at March 31, 2023 and 109,480,357 shares issued and
outstanding at December 31, 2022
11
Additional paid-in capital4,8054,805
Accumulated deficit(3,132)(2,994)
Accumulated other comprehensive loss(47)(48)
Total stockholders' equity1,6271,764
Noncontrolling interests33
Total equity1,6301,767
Total liabilities and equity$ 6,195$ 6,383
Table 3
ANYWHERE REAL ESTATE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended
March 31,
20232022
Operating Activities
Net (loss) income$ (138)$ 23
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization5051
Deferred income taxes(47)(6)
Impairments4
Amortization of deferred financing costs and debt premium23
Loss on the early extinguishment of debt92
Gain on the sale of businesses, investments or other assets, net(1)(131)
Equity in losses of unconsolidated entities210
Stock-based compensation46
Mark-to-market adjustments on derivatives(26)
Other adjustments to net (loss) income1
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:
Trade receivables52(2)
Relocation receivables(26)(35)
Other assets9(37)
Accounts payable, accrued expenses and other liabilities(21)(172)
Dividends received from unconsolidated entities11
Other, net(4)(11)
Net cash used in operating activities(113)(233)
Investing Activities
Property and equipment additions(18)(29)
Payments for acquisitions, net of cash acquired(3)
Net proceeds from the sale of businesses658
Investment in unconsolidated entities(7)
Proceeds from the sale of investments in unconsolidated entities6
Other, net117
Net cash (used in) provided by investing activities(5)36
Financing Activities
Net change in Revolving Credit Facility30
Proceeds from issuance of 5.25% Senior Notes1,000
Redemption of 7.625% Senior Secured Second Lien Notes(550)
Redemption of 9.375% Senior Notes(550)
Amortization payments on term loan facilities(3)(1)
Net change in securitization obligations11(13)
Debt issuance costs(18)
Cash paid for fees associated with early extinguishment of debt(80)
Taxes paid related to net share settlement for stock-based compensation(4)(16)
Other, net(8)(9)
Net cash provided by (used in) financing activities26(237)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash
Net decrease in cash, cash equivalents and restricted cash(92)(434)
Cash, cash equivalents and restricted cash, beginning of period218743
Cash, cash equivalents and restricted cash, end of period$ 126$ 309
Supplemental Disclosure of Cash Flow Information
Interest payments (including securitization interest of $3 and $1 respectively)$ 39$ 58
Income tax payments, net12
Table 4a
ANYWHERE REAL ESTATE INC.
2023 vs. 2022 KEY DRIVERS
Three Months Ended March 31,
20232022% Change
Anywhere Brands - Franchise Group (a)
Closed homesale sides150,491217,764(31) %
Average homesale price$ 437,964$ 449,250(3) %
Average homesale broker commission rate2.46 %2.43 % 3 bps
Net royalty per side$ 392$ 413(5) %
Anywhere Advisors - Owned Brokerage Group
Closed homesale sides53,79771,371(25) %
Average homesale price$ 663,223$ 706,282(6) %
Average homesale broker commission rate2.41 %2.39 % 2 bps
Gross commission income per side$ 16,776$ 17,475(4) %
Anywhere Integrated Services - Title Group
Purchase title and closing units21,74930,867(30) %
Refinance title and closing units2,1988,068(73) %
Average fee per closing unit$ 3,129$ 3,0333 %
_______________
(a) Includes all franchisees except for Owned Brokerage Group.
Table 4b
ANYWHERE REAL ESTATE INC.
2022 KEY DRIVERS
Quarter EndedYear Ended
March 31,
2022
June 30,
2022
September 30,
2022
December 31,
2022
December 31,
2022
Anywhere Brands - Franchise Group (a)
Closed homesale sides217,764263,600243,494186,219911,077
Average homesale price$ 449,250$ 475,361$ 449,313$ 439,671$ 454,864
Average homesale broker commission rate2.43 %2.43 %2.43 %2.44 %2.43 %
Net royalty per side$ 413$ 450$ 422$ 406$ 425
Anywhere Advisors - Owned Brokerage Group
Closed homesale sides71,37196,02986,02264,178317,600
Average homesale price$ 706,282$ 735,013$ 681,387$ 660,702$ 699,016
Average homesale broker commission rate2.39 %2.41 %2.40 %2.40 %2.40 %
Gross commission income per side$ 17,475$ 18,297$ 17,070$ 16,592$ 17,435
Anywhere Integrated Services - Title Group
Purchase title and closing units30,86741,48335,04525,660133,055
Refinance title and closing units8,0684,7123,3392,35118,470
Average fee per closing unit$ 3,033$ 3,264$ 3,127$ 3,137$ 3,146
_______________
(a) Includes all franchisees except for Owned Brokerage Group.
Table 5
ANYWHERE REAL ESTATE INC.
NON-GAAP RECONCILIATION - OPERATING EBITDA
THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(In millions)
Set forth in the table below is a reconciliation of Net (loss) income attributable to Anywhere to Operating EBITDA as defined in Table 9 for the three-month periods ended March 31, 2023 and 2022:
Three Months Ended March 31,
20232022
Net (loss) income attributable to Anywhere$ (138)$ 23
Income tax (benefit) expense(46)12
(Loss) income before income taxes(184)35
Add: Depreciation and amortization5051
Interest expense, net3818
Restructuring costs, net (a)254
Impairments (b)4
Former parent legacy cost, net (c)16
Loss on the early extinguishment of debt (c)92
Gain on the sale of businesses, investments or other assets, net (d)(1)(131)
Operating EBITDA$ (52)$ 69
The following table reflects Revenue, Operating EBITDA and Operating EBITDA margin by reportable segments:
Revenues (e)$
Change
%

Change
Operating
EBITDA
$
Change
%
Change
Operating
EBITDA Margin
Change
202320222023202220232022
Franchise Group$ 207$ 267$ (60)(22) %$ 97$ 138$ (41)(30) %47 %52 %(5)
Owned Brokerage Group9151,264(349)(28)(75)(40)(35)(88)(8)(3)(5)
Title Group (f)72190(118)(62)(17)(3)(14)*(24)(2)(22)
Corporate and Other(63)(86)23(e)(57)(26)(31)*
Total Company$ 1,131$ 1,635$ (504)(31) %$ (52)$ 69$ (121)(175) %(5) %4 %(9)
_______________
* not meaningful
(a) Restructuring charges incurred for the three months ended March 31, 2023 include $6 million at Franchise Group, $14 million at Owned Brokerage Group and $5 million at Corporate and Other. Restructuring charges incurred for the three months ended March 31, 2022 include $1 million at Franchise Group, $2 million at Owned Brokerage Group and $1 million at Corporate and Other.
(b) Impairments primarily relate to non-cash lease asset impairments.
(c) Former parent legacy items and Loss on the early extinguishment of debt are recorded in Corporate and Other. Former parent legacy cost relates to recent developments in a legacy tax matter in the first quarter of 2023.
(d) Gain on the sale of businesses, investments or other assets, net is recorded in Title Group and related to the sale of a portion of the Company's ownership in the Title Insurance Underwriter Joint Venture during the first quarter of 2023 and the sale of the Title Underwriter during the first quarter of 2022.
(e) Revenues include the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by Owned Brokerage Group of $63 million and $86 million during the three months ended March 31, 2023 and 2022, respectively, and are eliminated through the Corporate and Other line.
(f) Title Group includes our title, escrow and settlement services (title agency) businesses, our minority-owned mortgage origination joint venture and our minority-owned Title Insurance Underwriter Joint Venture. The sale of the Title Underwriter late in the first quarter of 2022 resulted in declines of $80 million in underwriter revenue and $6 million in Operating EBITDA in the first quarter of 2023 as compared to the first quarter of 2022, with $1 million of equity in earnings attributable to the Title Insurance Underwriter Joint Venture partially offsetting the decline in earnings. The Operating EBITDA contribution from our mortgage origination joint venture improved $6 million from $8 million of losses for the three-month period ended March 31, 2022 to $2 million of losses for the three-month period ended March 31, 2023.
Table 6a
ANYWHERE REAL ESTATE INC.
SELECTED 2023 FINANCIAL DATA
(In millions)
Three Months Ended
March 31, 2023
Net revenues (a)
Franchise Group$ 207
Owned Brokerage Group915
Title Group72
Corporate and Other(63)
Total Company$ 1,131
Operating EBITDA
Franchise Group$ 97
Owned Brokerage Group(75)
Title Group(17)
Corporate and Other(57)
Total Company$ (52)
Non-GAAP Reconciliation - Operating EBITDA
Total Company Operating EBITDA$ (52)
Less: Depreciation and amortization50
Interest expense, net38
Income tax benefit(46)
Restructuring costs, net (b)25
Impairments (c)4
Former parent legacy cost, net (d)16
Gain on the sale of businesses, investments or other assets, net (e)(1)
Net loss attributable to Anywhere$ (138)
_______________
(a) Transactions between segments are eliminated in consolidation. Revenues for Franchise Group include intercompany royalties and marketing fees paid by Owned Brokerage Group of $63 million for the three months ended March 31, 2023. Such amounts are eliminated through the Corporate and Other line.
(b) Includes restructuring charges broken down by business unit as follows:
Three Months Ended
March 31, 2023
Franchise Group$ 6
Owned Brokerage Group14
Corporate and Other5
Total Company$ 25
(c) Impairments primarily relate to non-cash lease asset impairments.
(d) Former parent legacy cost is recorded in Corporate and Other and relates to recent developments in a legacy tax matter.
(e) Gain on the sale of businesses, investments or other assets, net is recorded in Title Group and related to the sale of a portion of the Company's ownership in the Title Insurance Underwriter Joint Venture.

Table 6b
ANYWHERE REAL ESTATE INC.
SELECTED 2022 FINANCIAL DATA
(In millions)
Three Months EndedYear Ended
March 31,June 30,September 30,December 31,December 31,
20222022202220222022
Net revenues (a)
Franchise Group$ 267$ 339$ 306$ 233$ 1,145
Owned Brokerage Group1,2641,7751,4861,0815,606
Title Group19014411383530
Corporate and Other(86)(116)(97)(74)(373)
Total Company$ 1,635$ 2,142$ 1,808$ 1,323$ 6,908
Operating EBITDA
Franchise Group$ 138$ 204$ 202$ 126$ 670
Owned Brokerage Group(40)11(1)(56)(86)
Title Group(3)219(18)9
Corporate and Other(26)(34)(44)(40)(144)
Total Company$ 69$ 202$ 166$ 12$ 449
Non-GAAP Reconciliation - Operating EBITDA
Total Company Operating EBITDA$ 69$ 202$ 166$ 12$ 449
Less: Depreciation and amortization51555355214
Interest expense, net18283037113
Income tax expense (benefit) 12328(120)(68)
Restructuring costs, net (b)4316932
Impairments (c)3480483
Former parent legacy cost, net (d)11
Loss on the early extinguishment of debt (d)92496
Gain on the sale of businesses, investments or other
assets, net (e)
(131)(4)(135)
Net income (loss) attributable to Anywhere$ 23$ 88$ 55$ (453)$ (287)
_______________
(a) Transactions between segments are eliminated in consolidation. Revenues for Franchise Group include intercompany royalties and marketing fees paid by Owned Brokerage Group of $86 million, $116 million, $97 million and $74 million for the three months ended March 31, 2022, June 30, 2022, September 30, 2022 and December 31, 2022, respectively. Such amounts are eliminated through the Corporate and Other line.
(b) Includes restructuring charges (reversals) broken down by business unit as follows:
Three Months EndedYear Ended
March 31,June 30,September 30,December 31,December 31,
20222022202220222022
Franchise Group$ 1$ 1$ 2$ (3)$ 1
Owned Brokerage Group218819
Corporate and Other116412
Total Company$ 4$ 3$ 16$ 9$ 32
(c) Non-cash impairments for the three months ended September 30, 2022 primarily relate to lease asset and software impairments. Non-cash impairments for the three months ended December 31, 2022 include an impairment of goodwill at the Owned Brokerage Group reporting unit of $280 million, an impairment of goodwill at the Franchise Group segment of $114 million related to the Cartus/Leads Group reporting unit, an impairment of franchise trademarks of $76 million and $10 million of other impairment charges related to lease asset, investment and software impairments.
(d) Former parent legacy items and Loss on the early extinguishment of debt are recorded in Corporate and Other.
(e) Gain on the sale of businesses, investments or other assets, net is recorded in Title Group related to the sale of the Title Underwriter during the first quarter of 2022 and the sale of a portion of the Company's ownership in the Title Insurance Underwriter Joint Venture during the second quarter of 2022.
Table 6c
ANYWHERE REAL ESTATE INC.
2022 CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three Months EndedYear Ended
March 31,June 30,September 30,December 31,December 31,
20222022202220222022
Revenues
Gross commission income$ 1,247$ 1,757$ 1,469$ 1,065$ 5,538
Service revenue246217189141793
Franchise fees9912511479417
Other43433638160
Net revenues1,6352,1421,8081,3236,908
Expenses
Commission and other agent-related costs9881,4021,1708554,415
Operating4063563202951,377
Marketing64725957252
General and administrative981079291388
Former parent legacy cost, net11
Restructuring costs, net4316932
Impairments3480483
Depreciation and amortization51555355214
Interest expense, net18283037113
Loss on the early extinguishment of debt92496
Other income, net(131)(7)(2)(140)
Total expenses1,5902,0161,7421,8837,231
Income (loss) before income taxes, equity in losses and
noncontrolling interests
4512666(560)(323)
Income tax expense (benefit)12328(120)(68)
Equity in losses of unconsolidated entities10421228
Net income (loss)239056(452)(283)
Less: Net income attributable to noncontrolling interests(2)(1)(1)(4)
Net income (loss) attributable to Anywhere$ 23$ 88$ 55$ (453)$ (287)
Earnings (loss) per share attributable to Anywhere shareholders:
Basic earnings (loss) per share$ 0.20$ 0.76$ 0.49$ (4.14)$ (2.52)
Diluted earnings (loss) per share$ 0.19$ 0.75$ 0.48$ (4.14)$ (2.52)
Weighted average common and common equivalent shares of Anywhere outstanding:
Basic117.1116.5112.2109.5113.8
Diluted120.4117.8113.5109.5113.8
Table 7
ANYWHERE REAL ESTATE INC.
NON-GAAP RECONCILIATION - FREE CASH FLOW
THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(In millions)
A reconciliation of net (loss) income attributable to Anywhere to Free Cash Flow as defined in Table 9 is set forth in the following table:
Three Months Ended March 31,
20232022
Net (loss) income attributable to Anywhere$ (138)$ 23
Income tax (benefit) expense(46)12
Income tax payments(1)(2)
Interest expense, net3818
Cash interest payments(39)(58)
Depreciation and amortization5051
Capital expenditures(18)(29)
Restructuring costs and former parent legacy items, net of payments29
Impairments4
Loss on the early extinguishment of debt92
Gain on the sale of businesses, investments or other assets, net(1)(131)
Working capital adjustments17(203)
Relocation receivables (assets), net of securitization obligations(15)(48)
Free Cash Flow$ (120)$ (275)
A reconciliation of net cash used in operating activities to Free Cash Flow is set forth in the following table:
Three Months Ended March 31,
20232022
Net cash used in operating activities$ (113)$ (233)
Property and equipment additions(18)(29)
Net change in securitization obligations11(13)
Effect of exchange rates on cash, cash equivalents and restricted cash
Free Cash Flow$ (120)$ (275)
Net cash (used in) provided by investing activities$ (5)$ 36
Net cash provided by (used in) financing activities$ 26$ (237)
Table 8a
NON-GAAP RECONCILIATION - SENIOR SECURED LEVERAGE RATIO
FOR THE FOUR-QUARTER PERIOD ENDED MARCH 31, 2023
(In millions)
The senior secured leverage ratio is tested quarterly pursuant to the terms of the senior secured credit facilities*. For the trailing four-quarter period ended March 31, 2023, Anywhere Real Estate Group LLC ("Anywhere Group") was required to maintain a senior secured leverage ratio not to exceed 4.75 to 1.00. The senior secured leverage ratio is measured by dividing Anywhere Group's total senior secured net debt by the trailing four-quarter EBITDA calculated on a Pro Forma Basis, as those terms are defined in the Senior Secured Credit Agreement. Total senior secured net debt does not include our unsecured indebtedness, including the Unsecured Notes* and Exchangeable Senior Notes*, or the securitization obligations. EBITDA calculated on a Pro Forma Basis, as defined in the Senior Secured Credit Agreement, includes the bank adjustments set forth below. The Company was in compliance with the senior secured leverage ratio covenant at March 31, 2023 with a ratio of 1.00x to 1.00.
A reconciliation of net loss attributable to Anywhere Group to EBITDA calculated on a Pro Forma Basis, as those terms are defined in the Senior Secured Credit Agreement, for the four-quarter period ended March 31, 2023 is set forth in the following table:

Four-Quarter Period Ended
March 31, 2023
Net loss attributable to Anywhere Group (a)$ (448)
Bank covenant adjustments:
Income tax benefit(126)
Depreciation and amortization213
Interest expense, net133
Restructuring costs, net53
Impairments487
Former parent legacy cost, net17
Loss on the early extinguishment of debt4
Gain on asset dispositions, net(11)
Pro forma effect of business optimization initiatives (b)72
Non-cash stock compensation expense, other non-cash charges and extraordinary, nonrecurring
or unusual charges (c)
114
Pro forma effect of acquisitions and new franchisees (d)8
Incremental securitization interest costs (e)10
EBITDA as defined by the Senior Secured Credit Agreement*$ 526
Total senior secured net debt (f)$ 525
Senior secured leverage ratio* 1.00 x
_______________
(a) Net loss attributable to Anywhere Group consists of: (i) income of $88 million for the second quarter of 2022, (ii) income of $55 million for the third quarter of 2022, (iii) loss of $453 million for the fourth quarter of 2022 and (iv) loss of $138 million for the first quarter of 2023.
(b) Represents the four-quarter pro forma effect of business optimization initiatives as if these initiatives had occurred at the beginning of the trailing twelve-month period.
(c) Represents non-cash long term incentive compensation charges, other non-cash charges and extraordinary, nonrecurring or unusual litigation charges.
(d) Represents the estimated impact of acquisitions and franchise sales activity, net of brokerages that exited our franchise system, as if these changes had occurred at the beginning of the trailing twelve-month period. Franchisee sales activity is comprised of new franchise agreements as well as growth through acquisitions and independent sales agent recruitment by existing franchisees with our assistance. We have made a number of assumptions in calculating such estimates and there can be no assurance that we would have generated the projected levels of Operating EBITDA had we owned the acquired entities or entered into the franchise contracts as of the beginning of the trailing twelve-month period.
(e) Incremental borrowing costs incurred as a result of the securitization facilities refinancing for the four-quarter period ended March 31, 2023.
(f) Represents total borrowings secured by a first priority lien on our assets of $599 million under the Revolving Credit Facility and Term Loan A Facility plus $23 million of finance lease obligations less $97 million of readily available cash as of March 31, 2023. Pursuant to the terms of our senior secured credit facilities, total senior secured net debt does not include our securitization obligations or unsecured indebtedness, including the Unsecured Notes and Exchangeable Senior Notes.
* Our senior secured credit facilities include the facilities under our Amended and Restated Credit Agreement dated as of March 5, 2013, as amended from time to time (the "Senior Secured Credit Agreement"), and the Term Loan A Agreement dated as of October 23, 2015 (the "Term Loan A Agreement"), as amended from time to time. Our Unsecured Notes include our 5.75% Senior Notes due 2029 and 5.25% Senior Notes due 2030. Exchangeable Senior Notes refers to our 0.25% Exchangeable Senior Notes due 2026.
Table 8b
NET DEBT LEVERAGE RATIO
FOR THE FOUR-QUARTER PERIOD ENDED MARCH 31, 2023
(In millions)
Net corporate debt (excluding securitizations) divided by EBITDA calculated on a Pro Forma Basis, as those terms are defined in the Senior Secured Credit Agreement, for the four-quarter period ended March 31, 2023 (referred to as net debt leverage ratio) is set forth in the following table:
As of March 31, 2023
Revolving Credit Facility$ 380
Extended Term Loan A219
5.75% Senior Notes900
5.25% Senior Notes1,000
0.25% Exchangeable Senior Notes403
Finance lease obligations23
Corporate Debt (excluding securitizations)2,925
Less: Cash and cash equivalents122
Net Corporate Debt (excluding securitizations)$ 2,803
EBITDA as defined by the Senior Secured Credit Agreement (a)$ 526
Net Debt Leverage Ratio (b) 5.3 x
_______________
(a) See Table 8a for a reconciliation of Net loss attributable to Anywhere Group to EBITDA as defined by the Senior Secured Credit Agreement.
(b) Net Debt Leverage Ratio is substantially similar to Consolidated Leverage Ratio (as defined under the indentures governing the Unsecured Notes), except that under the indentures governing the 5.75% Senior Notes and 5.25% Senior Notes when the Consolidated Leverage Ratio is measured at March 31 of any given year, the calculation includes a positive $200 million seasonality adjustment to cash and cash equivalents.
Table 9
Non-GAAP Definitions

Adjusted net income (loss) is defined by us as net income (loss) before: (a) mark-to-market interest rate swap adjustments, whose fair value is subject to movements in LIBOR and the forward yield curve and therefore were subject to significant fluctuations (remaining interest rate swaps expired in November 2022); (b) former parent legacy items, which pertain to liabilities of the former parent for matters prior to mid-2006 and are non-operational in nature; (c) restructuring charges as a result of initiatives currently in progress; (d) impairments; (e) the (gain) loss on the early extinguishment of debt that results from refinancing and deleveraging debt initiatives; (f) the (gain) loss on the sale of businesses, investments or other assets and (g) the tax effect of the foregoing adjustments. We present Adjusted net income (loss) because we believe this measure is useful as a supplemental measure in evaluating the performance of our operating businesses and provide greater transparency into our operating results.
Operating EBITDA is defined by us as net income (loss) before depreciation and amortization, interest expense, net (other than relocation services interest for securitization assets and securitization obligations), income taxes, and other items that are not core to the operating activities of the Company such as restructuring charges, former parent legacy items, gains or losses on the early extinguishment of debt, impairments, gains or losses on discontinued operations and gains or losses on the sale of businesses, investments or other assets. Operating EBITDA is our primary non-GAAP measure.
We present Operating EBITDA because we believe it is useful as a supplemental measure in evaluating the performance of our operating businesses and provides greater transparency into our results of operations. Our management, including our chief operating decision maker, uses Operating EBITDA as a factor in evaluating the performance of our business. Operating EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations data prepared in accordance with GAAP.
We believe Operating EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting net interest expense), taxation, the age and book depreciation of facilities (affecting relative depreciation expense) and the amortization of intangibles, as well as other items that are not core to the operating activities of the Company such as restructuring charges, gains or losses on the early extinguishment of debt, former parent legacy items, impairments, gains or losses on discontinued operations and gains or losses on the sale of businesses, investments or other assets, which may vary for different companies for reasons unrelated to operating performance. We further believe that Operating EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an Operating EBITDA measure when reporting their results.
Operating EBITDA has limitations as an analytical tool, and you should not consider Operating EBITDA either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations are:
  • this measure does not reflect changes in, or cash required for, our working capital needs;
  • this measure does not reflect our interest expense (except for interest related to our securitization obligations), or the cash requirements necessary to service interest or principal payments on our debt;
  • this measure does not reflect our income tax expense or the cash requirements to pay our taxes;
  • this measure does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often require replacement in the future, and this measure does not reflect any cash requirements for such replacements; and
  • other companies may calculate this measure differently so they may not be comparable.
Free Cash Flow is defined as net income (loss) attributable to Anywhere before income tax expense (benefit), income tax payments, interest expense, net, cash interest payments, depreciation and amortization, capital expenditures, restructuring costs and former parent legacy costs (benefits), net of payments, impairments, (gain) loss on the sale of businesses, investments or other assets, (gain) loss on the early extinguishment of debt, working capital adjustments and relocation receivables (assets), net of change in securitization obligations. We use Free Cash Flow in our internal evaluation of operating effectiveness and decisions regarding the allocation of resources, as well as measuring the Company's ability to generate cash. Since Free Cash Flow can be viewed as both a performance measure and a cash flow measure, the Company has provided a reconciliation to both net income attributable to Anywhere and net cash provided by operating activities. Free Cash Flow is not defined by GAAP and should not be considered in isolation or as an alternative to net income (loss), net cash provided by (used in) operating, investing and financing activities or other financial data prepared in accordance with GAAP or as an indicator of the Company's operating performance or liquidity. Free Cash Flow may differ from similarly titled measures presented by other companies.
SOURCE Anywhere Real Estate Inc.
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David Goldsmith

All Powerful Moderator
Staff member
https://therealdeal.com/

Corcoran rules over Lower Manhattan​

Resi brokerage claimed nearly half of all deal volume

The Corcoran Group edged out Douglas Elliman to take the top spot in The Real Deal’s recent citywide brokerage ranking, but the story was different in Lower Manhattan.
The firm accounted for 45 percent of all deal volume in the neighborhoods of Manhattan’s southern tip, for a total of more than $755 million — over three times the volume of runner-up Compass, which booked just about $234 million.

To measure brokerages’ success in selling homes in Lower Manhattan, TRD drilled down into the dataset of 58,000 deals from 2022 from our rankings based on Manhattan, Brooklyn and Queens to focus on activity in Battery Park City, the Financial District, Civic Center, Two Bridges and Chinatown.
Corcoran’s chart-topping strength in new-development marketing gave the firm a clear edge in Lower Manhattan, where more than half of its 350 deals were sponsor sales at developments like LCOR’s 25 Broad Street and Lightstone Group’s 130 William Street in the Financial District and Extell’s One Manhattan Square in Two Bridges. As with total volume and deal count, no other brokerage came close.

Compass, which came in a distant second with about $234 million in volume across just 148 deals, had only 10 sponsor sales in its dealbook. Third-ranked Douglas Elliman, which booked nearly $167 million in volume across 104 deals, had 16 sponsor sales — the most of any firm other than Corcoran.

The 991 on-market deals closed in Lower Manhattan last year totaled nearly $1.7 billion. Of those, the majority — 508 sales for over $890 million — were in the Financial District, where decades of office-to-resi conversions have transformed the business district into a bustling neighborhood.
Battery Park City had 286 sales totaling just over $419 million, and there were 130 deals in Two Bridges (worth $238 million) — all but 28 of which were in Gary Barnett’s One Manhattan Square. Civic Center and Chinatown accounted for less than 7 percent of Lower Manhattan's deal count.
 

David Goldsmith

All Powerful Moderator
Staff member

Elliman dominates NYC brokerages in Midtown​

Firm closed 27% of all deals there last year by volume

Douglas Elliman came in a close second in The Real Deal’s recent citywide brokerage ranking, but the firm was the clear winner in Midtown, scooping 27 percent of sales volume there in 2022.
Howard Lorber’s firm closed 537 deals last year in the area stretching roughly from 60th Street to 30th Street from river to river, totallng $1.36 billion in volume. Its nearest rival, The Corcoran Group, did just 332 deals there for a total volume of about $932 million.

To measure brokerages’ success in selling homes in the Midtown area, TRD drilled down into the dataset of 58,000 deals from 2022 from our recent citywide brokerage ranking, looking specifically at sales in the area.
Midtown comprises 12 neighborhoods, ranging from Times Square North and the Plaza District — home to Billionaires Row — to tiny Fifth Mad straddling the shopping strip for seven blocks from 46th Street up to 53rd Street. The other neighborhoods included are the Garment District, Penn Plaza, Turtle Bay, Grand Central, Times Square, Hell’s Kitchen, Sixth Avenue, Park Avenue and Sutton Place.

Compass ranked a distant third in Midtown with just $489 million in volume across 354 deals, followed by Brown Harris Stevens with 230 deals totaling $325 million. Sotheby’s International Realty rounded out the top five with $131 million across 80 deals.
They didn’t break the top five, but the next two firms in the ranking are remarkable as well. Ryan Serhant’s eponymous firm took the No. 6 spot with $79 million in volume across 23 deals, yielding an average price of $3.45 million — the highest of any firm that did a significant number of deals in Midtown.

The only firm with a higher average price was No. 7-ranked Official — a company founded just last June by former Douglas Elliman stars Oren and Tal Alexander and backed by white-label brokerage Side. The fledgling firm made Midtown’s top 10 on the back of just three deals, including two massive Plaza District sales: a $25.5 million deal at 111 West 57th Street and a $11.5 million deal at 157 West 57th Street.

Unsurprisingly, Times Square North and the Plaza District — the neighborhoods encompassing Billionaires’ Row — accounted for the highest volumes in the Midtown area with $1.19 billion and $919 million, respectively.
Less than 18 percent of the 2,323 deals closed in Midtown last year were sponsor sales. More than 48 percent were co-ops.
 
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