It was going to be a lavish affair: The 600 brokers of the Corcoran Group gathered on top of the ice rink at Rockefeller Center on Sept. 25 for drinks, dinner and dancing to celebrate the sale of the company to NRT Inc., the largest national residential real-estate company. But just as Corcoran chief operating officer Scott Durkin was about to settle on a menu with Barbara Corcoran, the company’s famed founder-and its face-two planes crashed into the World Trade Center and everything changed.
Nobody was living it up in the shadow of Sept. 11, and parties like the one Corcoran had planned have been canceled, postponed or reconfigured as charity fund-raisers in our post-attack, post-boom city. The real-estate market in particular has become a wait-and-see game in a slumping economy knocked further off-track by the attacks. But the sale of Corcoran to NRT-a private company owned by publicly held Cendant Corporation and Apollo Management, which has acquired more than 200 independent real-estate companies since they were formed in 1997-went through on Sept. 24, bringing a major national player into Manhattan’s sometimes treacherous and parochial real-estate market, and adding significantly to the questions about the market’s future.
Having nixed a rowdy celebration, Corcoran informed its employees at a long-scheduled biannual sales meeting at the Pierre Hotel on Sept. 21 that it was in the late stages of negotiations to sell the company. The news had been so highly anticipated that, if the mood had been lighter, Mr. Durkin would have screened a short film he’d produced, titled Rumors , documenting the virulent gossip that had been circulating all summer of a potential Corcoran sale. In it, the heads of competing brokerages were interviewed about all the talk. Mr. Durkin had even prepared two versions of the film with different endings, one of which announced the sale. The deal was final three days later, estimated at between $50 million and $75 million.
Generally, the sale meant that Corcoran, one of the largest residential brokerages in the city, could get a lot bigger. Specifically, it meant that the quirky Manhattan real-estate business was on the verge of becoming big business and would in some ways be changed forever.
It meant that Corcoran and NRT, in the short term, would be buying up competing brokerages and, in the longer term, would aim to dominate the Manhattan residential market. NRT said that it wants to acquire properties in New York City under the Corcoran name, making Corcoran unique under the NRT umbrella, where other companies are merged and affixed with the name of one of its parent company’s franchises-Century 21, ERA and Coldwell Banker. NRT’s president, Bob Becker, said the uniqueness is called for here because the city and its real-estate market are like no other. “The Corcoran Group is not a franchise, and they will continue with their name,” said Mr. Becker, “because that name on that small island is almost a franchise in itself, and our objective is to really just make that company better and give them support.”
In an interview on Oct. 1, Corcoran executives would not elaborate on which companies they have in their sights. They said they were primarily looking for productive brokers. “Our strategy will be making smart acquisitions,” said Pam Liebman, Corcoran’s chief executive. “We have a really strong team between Corcoran and NRT. They know how to make acquisitions, and we know how to run real-estate companies …. We will be looking for companies where we have synergy.”
Corcoran’s competitors said that by joining forces with NRT, Corcoran had lost all its cachet in the city, one of the most exclusive and expensive markets in the world-and jokes were rampant both inside and outside Corcoran that the gold jackets-a Century 21 trademark-would be arriving any day. NRT countered that Ms. Corcoran and Ms. Liebman would now report to NRT president Bob Becker, but that Corcoran had negotiated a deal that called for business as usual at the company. Ms. Liebman said that the merger poises Corcoran to maintain its “highly productive and fun” corporate culture while both dominating the residential real-estate transactions in the city and plugging into NRT’s national network of other brokerages with a dominant presence in a metropolitan area. NRT does more sales than any other residential company in Dallas–Fort Worth, Boston, Chicago, all of California and a number of other areas.
The impact of the announcement on the industry has yet to be realized, but on the same day that the Corcoran sale was announced, the Manhattan Association of Realtors, which represents 39 independent real-estate firms in the city, said that its members would attempt a multiple listing service like those that exist in other metropolitan areas by collectively listing the properties they represented on an Internet side called Realtor.com. (In a strange twist, all NRT companies currently list their properties on Realtor.com.)
The M.A.R.’s move would seem like a defensive one to gird against behemoth Corcoran, which appears to be only getting that much bigger, but an M.A.R. representative said the plan had been in the works before Corcoran announced its sale. Ms. Liebman said there had been no discussion at the company or with NRT about listing Corcoran properties on Realtor.com.
Then, on Oct. 3, one of Corcoran’s biggest competitors-Douglas Elliman, which is owned by Insignia Financial Group, a national real-estate and investment firm-was scheduled to announce, at a company-wide breakfast meeting at the Marriott Marquis Hotel, that it was revamping its national image and appointing a new president. The company is changing its name to Insignia Douglas Elliman, and also changing its logo accordingly. Paul Purcell, a former managing director and chief operating officer, is being named the president of Insignia Douglas Elliman. Alan Rogers, the current chairman and chief executive, will be on Insignia’s global board of directors.
Mr. Purcell said that the changes had more to do with the rapidly evolving real-estate market than with the fact that its main competitor, the Corcoran Group, had just been bought. In 2000, Douglas Elliman, with 900 brokers, handled $2.84 billion in real-estate deals, Corcoran, with its over 500 brokers, handled $2.2 billion in deals, and Brown Harris Stevens, with 150 brokers, handled $2.1 billion in deals. Brown Harris has since acquired the Halstead Property Company, which had 250 brokers.
“Insignia acquired us over two years ago, and we believed at that time that it was important in New York to protect the brand name of Douglas Elliman,” said Mr. Purcell. “But over the past seven months we have been looking at a way to remarket the firm. You walk around town and see Insignia on everything, it’s about time we tapped into that name.”
Mr. Purcell also said that the name change has been in the works for seven months, but said that the announcement was bumped up three weeks after Corcoran announced that it had been sold. “Read into that what you want,” he said. The meeting will also include an announcement about a new advertising campaign, new insurance benefits, disability benefits and financial-planning services for brokers.
Corcoran also said that it had plenty of plans for growth already in the works when it was sold. In the last 12 months, the company has hired 28 new brokers at its Carnegie Hill office, 28 in Greenwich Village, 22 in Brooklyn Heights and eight at its Upper West Side offices on Broadway; it is also expanding its office space in the Village and on the Upper West Side. At its corporate headquarters at 660 Madison Avenue, the company-which currently occupies 24,000 square feet on the 11th floor-is about to sign a lease for an additional 4,500 square feet on the 12th floor (with a large terrace overlooking the avenue) that will accommodate an additional 30 brokers-which will bring the total number to almost 630. Thinking nationally, Corcoran plans to launch a new ad campaign in national magazines and on local telephone booths on Oct. 18 that is about company branding. It was designed by Mad Dogs and Englishman and shot by the art director and photographer who did the current Evian ” L’original ” campaign. The first ad is a box full of chocolates shaped like apartment buildings, on a purple background. In the lower right corner it says “The Corcoran Group, Exceptional Real Estate.”
The only immediate changes at the company’s Madison Avenue headquarters, said Ms. Liebman, are a couple more perks. In a morning meeting on Oct. 1, over the regular catered Monday breakfast of lox and bagels, Ms. Liebman said she’d announced to employees that they were eligible to enroll in NRT’s plush health plan-it has dental and eye coverage, whereas Corcoran’s does not-and a 401(k) matching program. Since the announcement of Corcoran’s sale, she said, “We’ve had a lot of calls from other brokers wanting to come in for interviews.”
According to Mr. Durkin and Ms. Liebman, retaining the way Corcoran operates-including the perks-was a condition of the deal. And while few companies purchased by NRT have had as expansive a work environment, most people who watch NRT agree that, as long as the companies it buys continue to perform well, Mr. Becker is unlikely to interfere. “I know that she does a lot of things that are unusual with the food and the massages and whatever it is,” said Mr. Becker, referring to a couple of Corcoran’s perks. “It works. It’s a different and more fun way of going about it, but the results that she has produced are phenomenal …. We’re looking to learn from her.”
Another new perk is the fact that NRT has recently committed $100 million over the next three years to capital expenditure, mostly technological development, among its 22 brokerages nationwide. Ms. Liebman, however, said she considered their Web site very advanced and not in need of immediate improvement.
“Eating people up,” Ms. Liebman said, won’t be immediate either. “We’re not there yet; don’t expect an announcement tomorrow,” she said. But they have starting considering certain companies.
If you believe the heads of some of these smaller brokerages, they are resistant to being bought by Corcoran or NRT. “We are not in any negotiations,” said Joanne Kennedy, who owns Coldwell Banker Hunt Kennedy, with 120 brokers.
“Everybody knows I love running my firm,” said Elizabeth Stribling, founder and president of Stribling & Associates, which also has about 120 brokers. “We feel we’ve got a very strong, solid upscale niche market that offers a customized service, the likes of which is disappearing more and more.”
“Those of us that are smaller firms, much as we admire [Corcoran], we don’t want to be part of the Corcoran Group,” said Fred Peters, president of Ashforth Warburg, with about 75 brokers. “That’s certainly true of me.”
Michelle Kleier, president of Gumley Haft Kleier, said she’d been approached by a few people over the years about selling her small boutique shop with 36 brokers. “We’re a small company, and we want to keep it that way. I don’t like big conglomerates.”
On the other hand, Neil Binder, co-owner of Bellmarc Realty, with over 200 brokers, is not so sure that some firms can’t be bought for the right price. “It’s all a matter of how much they feel they would want to plunk down,” Mr. Binder said. “Anybody who comes to me with a number that sounds aggressive, I’ve looked at in the past, and had enough love for this company that I felt the number wasn’t worth it to me.”
But, added Mr. Binder: “There’s always a threshold point where every firm that’s run responsibly [will sell].”
UPPER WEST SIDE
600 West 111th Street
Two-bedroom, two-bath, 1,500-square-foot co-op.
Asking: $850,000. Selling: $900,000.
Maintenance: $1,097; 35 percent tax-deductible.
Time on the market: one week.
GRADUATES OF WESTCHESTER A couple with four grown kids-the last is finishing college-picked Columbia University as the landmark they wanted to be near when moving into the city. Petra Scholder of Benjamin James Associates found them this “classic five” apartment on Broadway after they’d lost out on other properties. They found the neighborhood-and its bookstores and cafés-less hectic than others a little south. “There’s a lot going on and it’s very much on the upswing, and not quite as frenetic as lower neighborhoods,” said Ms. Scholder. And the buyers still wanted quite a bit of space. “She was giving up a very large home” in Westchester, said the broker of the wife. With nine-foot-high ceilings, oak-stripped window frames and doors and herringbone-patterned oak floors, as well as two newly refurbished bathrooms, the apartment brought several offers. “It went to the highest best” bid, explained Ms. Scholder. “There is a lot of interest in larger apartments on the Upper West Side”-a rare commodity, she explained. The determined couple won out, and the deal was final on Sept. 6.
UPPER EAST SIDE
1075 Park Avenue
Three-bed, three-bath, 2,400-square-foot co-op.
Asking: $2.595 million. Selling: $2.4 million.
Charges: $2,600; 35 percent tax-deductible.
Time on the market: 10 days.
IT’S ALL ABOUT WHO YOUR KID KNOWS The sellers of this eight-room apartment in excellent condition at Park Avenue and 88th Street were transferred for work to Florida several months before the attack on the World Trace Center. After finding a new home in Florida, they put this place on the market with Michelle Kleir, the president of Gumley Haft Kleir, who also happens to be the mother of one of their eldest son’s best friends. Ms. Kleir said she showed the apartment about a dozen times over the course of one week before finding a buyer in a family living in a smaller rental apartment in the neighborhood. In fact, their son had gone to elementary school with the sellers’ youngest son, and they remembered the place from a play date. The apartment has a new granite kitchen and a combination den and guest room that was made out of part of the dining room and a maid’s room. The building went up in 1923 and has a doorman and concierge.
431 Fourth Street
Three-story, 3,300-square-foot townhouse.
Asking: $1.5 million. Selling: $1.275 million.
Time on the market: three weeks.
TIMES MAN’STOWNHOUSE On Sept. 11, The New York Times announced that Roger Cohen, 46, would be taking over for Andrew Rosenthal as the paper’s foreign editor. Two weeks before, Mr. Cohen had closed on a deal to buy this 20-foot-wide, 50-foot-deep townhouse between Sixth and Seventh avenues. Mr. Cohen has worked at The Wall Street Journal and Reuters and was most recently stationed in Germany, where he was the chief Berlin correspondent for The Times . He was also The Times ‘ Balkan bureau chief during the Bosnian war, and he has written two books, Hearts Grown Brutal: Sagas of Sarajevo and In the Eye of the Storm , a biography of Gen. H. Norman Schwarzkopf. The sellers of this apartment, a couple with a teenage daughter, are also writers, although of a different sort. “They are writers for daytime TV-soap operas,” said listing broker Billy Stephen, senior vice president of the Corcoran Group. The sellers are moving to a condo on the Upper East Side in order to be closer to their daughter’s new private school. The townhouse has one working fireplace and two ornamental fireplaces, a landscaped garden, sliding doors and a detailed center staircase.