Big Dealer Michael Shvo Bolts Elliman; For Start-Up

On

Oct. 18, Michael Shvo, the top-grossing broker for Prudential Douglas Elliman

who recorded more than 400 transactions topping $300 million in sales in 2003,

announced his resignation from the real-estate giant. His name has been removed

from Douglas Elliman’s Web site and his office number disconnected.

Immediately,

rumors swirled through corridors of the highest echelons of Manhattan’s

tight-knit—and hyper-competitive—real-estate world.

Mr.

Shvo’s announcement comes as he is leaving the 2,000-broker firm to launch his

own company, the Shvo Group, which will employ his current 27-person staff and

wade into the upper strata of Manhattan real estate. Moreover, he plans to

offer consulting services to developers on new construction—an increasingly profitable

area for brokers.

“I

had a phenomenal year, and have been involved in many new developments. I feel

there is a place in the market for a new player. A much younger player. Someone

who is connected with the buyer,” Mr. Shvo told The Observer. “I wanted to branch out on my own.”

Mr. Shvo said he had been contemplating the decision for

the past several months, and retains an amicable relationship with his former

employer following his departure.

“I

think in light of everything, people need to do what they need to do. I have a

good relationship with Michael, and wish him the best of luck,” Douglas Elliman

chief executive Dottie Herman said.

At the upper strata of Manhattan real estate, where $10

million deals are common, Mr. Shvo’s departure caps several weeks of

speculation and rumor-milling. One high-placed industry source, who spoke to The Observer on condition of anonymity,

said Mr. Shvo left the firm due to a complaint filed by the Corcoran Group to

the Real Estate Board of New York in the spring, claiming ethics violations on

the part of Mr. Shvo.

“His actions were detrimental to a new development

project in Tribeca,” the source said.

Steven

Spinola, the president of REBNY, declined to comment on complaints filed by a

REBNY member or a ruling by the organization on potential complaints.

“We

don’t comment on complaints. What we do has to do with our own internal

policing of our members. We get complaints and we deal with them,” Mr. Spinola

said.

When

reached for comment, Corcoran’s president and C.E.O. Pamela Liebman declined to

comment on Corcoran’s REBNY filing, but said: “I believe every broker has a

responsibility to buyers, sellers and fellow brokers to maintain ethical

standards and principles that allow this business to function smoothly in the

best interests of all parties. We in the industry rely on REBNY to enforce

these policies and apply them equally.”

Both Mr. Shvo and Ms. Herman batted away talk of a

forced departure.

“There

was a complaint. But it has nothing to do with Michael’s decision,” Ms. Herman

said.

“Douglas

Elliman never asked me to leave. One thing has nothing to do with the other.

This decision is something I’ve been working on for the past year,” Mr. Shvo

said. “This announcement is not a new thing. It has nothing to do with REBNY.

Last year, I was the top producing broker in New York, and there are always

going to be rumors, and people are always going to talk.

“It’s

jealousy,” Mr. Shvo continued. “I couldn’t have been doing the business I’ve

been doing, the hundreds of millions of transactions, if I didn’t have great

relationships with people in the brokerage community. This is not a business

where you play by yourself.”

With

the launch of the Shvo Group, the Tel Aviv–born former stock broker seeks to

replicate his meteoric rise at Elliman, which included netting more than 400

transactions last year, including 30 condos in the Time Warner Center, along

with marketing listings like the $19.99 million Sky Studio at 704 Broadway, the

triplex loft owned by Israeli investor Jonathan Leitersdorf that served as the

backdrop for an episode of Sex and the

City, as well as Jerry Seinfeld’s wedding.

In

August 2004, Donald Trump told the Jerusalem daily Haaretz: “Shvo is an amazing agent. He is young, energetic and

very smart.”

Still,

some industry insiders say part of Mr. Shvo’s hard-driving style that served

him well in closing big-ticket sales also fermented friction with other

brokers.

“[Michael]

is very smart. He sees a global perspective, but he’s volatile,” one

Elliman broker said.

“Michael

is an extremely smart man; sometimes his desire for growth and desire to

succeed almost escapes him. He was his own worst enemy sometimes,” said Paul

Purcell, the former president of Douglas Elliman who now runs his own

relocation and consulting firm, Braddock and Purcell.

At

Elliman, Mr. Shvo operated virtually as a unique entity within the company,

managing a staff of more than 20, which will now join him at the Shvo Group.

Some industry watchers wonder how the Shvo Group will fare without the

marketing apparatus and infrastructure that giants like Corcoran and Elliman

bring to the marketplace.

“We

spent millions of dollars each year to communicate the Douglas Elliman name.

It’s incredibly hard to compete with power houses like Corcoran and Douglas

Elliman. That’s why brokers stay with firms,” Mr. Purcell said. “Being a broker

is the best secret in the world if you want to be a small business owner. The

large firms pay for legal advice. They provide your marketing. And they pay for

your H.R. costs. Michael will now get to experience firsthand what it’s like

running a company.”

Which is exactly what Mr. Shvo wants.

“I’ve been operating as the Shvo Group for a few years

now,” he said. “I decided it was time to branch out on my own. There are lot of

great things to be done in real estate.”