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.”
