Property Grunt

Tuesday, March 13, 2007

4 Horsemen leaving

The Real Estate broke the story that the 4 Horsemen were departing. Then Curbed delivered a double whammy with news that it appears that about 15 brokers are including the 4 Horsemen.

I have information that indicates that at least one of the 4 is striking out on their own. And she's a real material girl.

Overall, these developments confirmed some unconfirmed chatter that I heard in the past couple of months concerning BHS. According to what I heard on the wire there was a change of command in the Tribeca and Village office. Prior to that change, the Village office was undergoing renovations and expanding the space and the Tribeca office was undergoing a very successful baptism under fire in the Tribeca market. However, according to the wire there was still a significant number of seats that needed to be filled. And an empty seat is an unprofitable seat. So I would not be surprised that the oligarchs of BHS issued an ultimatum to bring in new blood. Overall, I think this is a win-win for all parties involved.

Pam Liebman

This is a woman who has had to fill the enormous shoes of one the most famous brokers. Everyday she goes to work is a reminder of her predecessor. Now adding to the pressure cooker is some of her best brokers jumping ship. However I don't think Ms. Liebman is dropping a load in her pants over this. In fact I think she is relieved that this drama is now over.

In the world of real estate sales, the closer is the king. That means they can pretty much demand anything they want and do what they want. I have been a witness to some very nasty behavior from brokers and they were able to get away with it because of the money they brought into the company. I also know some brokers who are lavished with more ad space and the authorization to form a team because of the money they bring in.

Pam Liebman was quoted saying

"Sometimes issues come up that make it better for the brokers and the company to part ways," Corcoran CEO Pam Liebman told The Real Estate on Monday afternoon. "In this case, that's the path we chose to take." (Ms. Liebman was using the royal we.) "They're good brokers, we wish them well."

Translation: Money. Basically she had a group of Richard "Ricky" Romas who were either demanding more money or more resources or maybe it was the other way around where Corcoran was making demands that cut into the 4 Horesmen's development deals as suggested by one commentor. On top of that there was probably a lot of egos clashing.

Don't get me wrong. I don't think any less of these brokers or Pam. Let's face it. When you bring in $200 million in sales and have high profile celebrity buyers working with you, you are going to have a very strong sense of yourself. And when you are Pam Liebman who was selected to be the heir of the one the biggest real estate firms in Manhattan by the legend who created it, you are not going to bring a knife to gunfight, you are going to bring to a M249 Squad Automatic Weapon, a full platoon of the Crimson Guard and lay waste to everything in your path.

What these brokers did by leaving was clean house without having Pam doing the dirty work. Now Pam is free to replenish her ranks with a new roster of brokers. In other words she's George Steinbrenner and Corcoran is the Yankees. Within her own company there are tons of brokers who probably felt they were in the shadow of the 4 Horsemen and with them gone, this is an opportunity for them to shine. There is also probably a slew of brokers from other companies banging down the door to have the Corcoran name.

And let's not forget Corocoran's own farm team Citi-Habitats. They have proven to be quite a scrappy company despite the fact they work with less resources than the average Corcoran broker and are often viewed by some brokers as the McDonald's of real estate. Let's not forget how profitable McDonald's is.

In fact I would not be surprised that Citi-Habitats returns to the days when Andrew Heiberger sold the company. Corcoran did a lot of cherry picking at Citi-Habitats during that period and it is possible that Pam goes back to harvest to a the Citi-Habitats orchard. I wouldn't be surprised to see Pam Liebman having dinner withUrban Digs .

The new kids on the BHS block.

These brokers will cruise and schmooze with talk of why they left Corcoran and why BHS is such a better company and what a great opportunity it is. When they pitch to potential buyers and sellers they will crow about how BHS has a better marketing division and how the BHS listings database is so much more superior to taxi. This new sheen is something they will wear proudly because the buzz of their leaving is going to attract a lot of attention which is what a broker wants.

I once heard a mortgage broker refer to Brown Harris Stevens brokers as "looking half dead." which I think she was referring to their demographic. I thought this was amusing coming from her since the only reason why she had wrinkle free skin was due to the gatling gun full of botox blasted into her face.

There are some who view Corcoran brokers as being young and firm in comparison to Brown Harris Stevens. Therefore these new Corcoran brokers will have an advantage over their indigenous colleagues. DON'T YOU BELIEVE IT!

First of all, Brown Harris Stevens has been around a lot longer than Corcoran and that itself says a ton about the company. If you think these Brown Harris Stevens brokers will simply lay down to the conquering heroes of Corcoran, you are dead wrong. There is a multitude of BHS brokers who have a higher closing rate than the new guns coming in, so don't make the mistake of perceiving them as a Shelly

And some of them maybe farther in their years, but they have no qualms of ripping off Heather Mills' prosthetic leg and beating you with it in order to get an exclusive.

In the beginning, I predict that there will be some tension in these offices particularly with seating arrangements. Most likely some of these Corcoran brokers will be placing their muscular asses in the seats of the desks that were formerly occupied by BHS brokers creating a displacement of sorts. "Who moved my cheese?" will be the question of the day.

All this change and tension will result in a galvanization of the BHS. Why? Because everyone has something to prove. The new blood have to prove that they are substance and not just hype. They did not get to this position by riding on the coattails of the Corcoran machine and that they can succeed in a different environment. Brown Harris Stevens brokers will be jerked out of their comfort zone because now the enemy is within their camp. They have to prove to themselves and others that they are relevant in what they do and they can succeed. Especially those who have lost their stature and have no choice but to fight tooth and nail to regain it. In other words, the oligarchs of BHS have lit a proverbial fire under the asses of all their brokers.

What if the Rolling Stones and N'Sync merged forces for a concert tour? Would it be good or bad? I don't know but it sure as hell would sell a lot of tickets. It appears this is the formula that BHS is following. Let's see what happens in a year.