Corcoran Sells Out to Giant Group NRT; Will Barbara Stay?

On Friday, Sept. 21, in a second-floor suite of the Pierre Hotel, at a company-wide meeting of the Corcoran Group, chairwoman Barbara Corcoran scrapped the agenda-introducing a new advertising campaign-and instead addressed rumors that the company was being sold.

“She didn’t give us any detail about who the buyer was, but she said the company was in negotiation,” said one broker at the meeting.

The following Monday, Ms. Corcoran, 51, telephoned her assistant from her lawyer’s office to dictate an e-mail to her 600 brokers confirming that a deal was done. The Corcoran Group, one of Manhattan’s three largest brokerage firms, was being sold to National Realty Trust Inc., the largest private real-estate holding company in the country. NRT is jointly owned by Cendant and Apollo Management. The price was estimated at about $65 million by industry sources, though a few suspected that it was significantly lower.

Ms. Corcoran, who has repeatedly denied that the company was for sale, said the deal had been in the works for almost a year. She said her company would remain intact, with herself as chairwoman and her appointed officers and managers still in place. However, many in the real-estate industry are skeptical that two such firms-a headstrong, personalized company like the Corcoran Group and a generic company like NRT, with 38,000 employees-could merge without any feathers being ruffled. Ms. Corcoran has a reputation for spoiling her brokers, stealing top performers from rivals with large signing bonuses, paying for multiple assistants and private cars, bringing a massage therapist into the office once a week and keeping the kitchen well-stocked. But now the company has shareholders to consider; Cendant is a public company.

The day after the deal was announced, when Ms. Corcoran got around to unveiling the company’s new ad campaign, one critical thing was missing: her. Ms. Corcoran’s figure, usually swathed in a red suit and topped by a blonde pixie cut, has been the company’s trademark. But on Sept. 25, marketing director Anita Perrone held a meeting in Corcoran’s Soho office announcing that the new campaign would not feature Ms. Corcoran’s mug. “She’s only going to be in 50 percent of our advertising,” said Corcoran chief operating officer Scott Durkin, who denied that the change had anything to do with the sale. “We couldn’t figure out what to do next; we could only figure out how to pose [her] so many ways.”

A Corcoran broker who attended the presentation said, “It’s going to be more like what bigger companies do. The theme will be decadent real estate, and the ads will be variations on that theme.” (One was a box of chocolates shaped like apartment towers.) “They said she will still be the spokesperson of the company, but they wanted to put us in another light.”

Ms. Corcoran has been trying to put the company in another light for several years, without much success. She searched for venture capital to go public, but failed; she hired away Robbie Browne from competitor Douglas Elliman to start an international branch, but he stayed only a brief period, until it became clear that Corcoran did not have the resources; and she tried to spin off her Web-site company, corcoran.com, but finally reincorporated it.

Buyers have approached her every five years or so since she started the company in 1973, said Ms. Corcoran, but she hadn’t taken them seriously. Lately, she appeared to be waiting for the market to peak and her company’s worth to maximize. “Brokerage firms don’t have a lot of interested people when they want to sell, and it’s always held our values down,” Ms. Corcoran said in an interview a few months ago. “They’ve never traded at large multiples.”

In 1999, the Insignia Financial Group paid $65 million for Manhattan brokerage Douglas Elliman. Very few interviewed thought that Ms. Corcoran would have gotten any more than that. The market continued to rise in 2000, and this spring there was talk that the Corcoran Group was for sale for $75 million, but real-estate prices have started to drop slightly since then.

“About nine or 10 months ago, we were approached by three companies all at once,” said Ms. Corcoran. “For whatever reason, everybody suddenly seemed interested in having a large presence in New York. We talked to a number of companies to get the lay of the land.”

Ms. Corcoran chose NRT because she felt they would give her the most freedom in running the company and that they were as committed to growth as she is. “They seemed to be of the mind to give us enormous latitude, and that became our interest in talking to them further,” she said. “Now we have a greater ability to expand and deeper pockets, and we are very strong in the local market, so we can knit our fabric into the companies they own. They have 38,000 brokers, so that is a tremendous amount of referral business nationwide.”

NRT has been trying unsuccessfully to break into the New York City market for years, having contacted several brokerages in Manhattan, including Bellmarc and Douglas Elliman, both of whom were not interested. “We would have loved to do this transaction four years ago,” said Bob Becker, president and chief executive of NRT, “but the timing was right now.”

For years, the Manhattan market has remained elusive to nationwide realty companies. “New York is a huge market, and therefore it is a different kind of market,” said Mr. Becker, whose company’s realtors represent the largest market shares in San Francisco, Boston, Dallas and Atlanta as well as in other cities. “Just the makeup of the different kinds of property make it more complex than any other place. There is a lot of knowledge you have to have in a city like this. It is not an easy place.” With that in mind, said Mr. Becker, the Corcoran name is an asset and will be retained.

Paul Purcell, chief operating officer of Douglas Elliman, which is owned by a major commercial real-estate firm, said that the deal “certainly puts my company, which is a public company, on a more even playing field with [Corcoran]. Public companies have responsibilities to shareholders.” He said he thought some things would have to change at Corcoran. “I think it is fair to say she hasn’t paid attention to the bottom line, and when you are a privately held company, you can do whatever you want to do. It’s wonderful to get free sodas and free food, sure, but is it intelligent for your shareholders?”

Added another real-estate executive: “She’s not going to be able to do what she has done in terms of cutting those outrageous deals.” Earlier this year, Ms. Corcoran lured a top broker from Brown Harris Stevens with four assistants, a car and driver and a $200,000 fee.

But at the same time, Ms. Corcoran herself is not cut from the excesses of the Upper East Side. Born in Edgewater, N.J., to a Catholic family, the second-oldest of 10 children, she went to St. Thomas Aquinas College as “a charity-D student,” she told a magazine. A few months before graduation, while waitressing at the Fort Lee Diner, she met and started dating Ray Simone, a divorced man eight years her senior. Two years later, Mr. Simone gave her $1,000 to start a real-estate company out of the East 86th Street apartment she shared with two roommates; he took 51 percent ownership. Three years later, after Ms. Corcoran had moved in with Mr. Simone and his three children, he left her to marry her assistant. It took her two years to get him to agree to sell her his share. When they split up the assets, he told her, “You will never succeed without me,” Ms. Corcoran told The New York Times in August.

After one failed marriage, Ms. Corcoran was wed to Bill Higgins 12 years ago. They have a son, Tommy, who was conceived with the aid of one of Ms. Corcoran’s sisters’eggs. She chose Florence, because-as Ms. Corcoran told a magazine-”Florence has the best brains, the best personality and the best body.” Earlier this year, Ms. Corcoran bought a three-bedroom, 2,700-square-foot apartment in a co-op building at 1192 Park Avenue for $3.5 million.

Ms. Corcoran and NRT have plans beyond this deal. NRT is looking to buy more companies in the metropolitan area. “We will be aggressively looking for other quality companies [in Manhattan],” said Mr. Becker. “We are looking to grow our New York operation.”

And Ms. Corcoran is said to be still searching for a ghostwriter for her autobiography. Right now, the first line might be: “I don’t sign the check anymore, which is more fun.”