Douglas Elliman is boosting its coffers by $50 million.
The loan comes from asset manager Kennedy Lewis and is aimed at funding “strategic growth and expansion,” the company announced in a press release on Tuesday.
The funds will add to Elliman’s cash stores, which totaled $92 million at the close of the second quarter. The firm had no debt prior to taking on the loan.
Elliman has been in cost-cutting mode since high mortgage rates and sparse inventory continued to stall the residential market last year. While the loan is earmarked for growth, a spokesperson for the company said it’s not indicative of a shift in the firm’s strategy.
“We are always long and short term focused on growth and expansion — while also being focused on running our business with enhanced operational efficiency and productivity,” the spokesperson said in a statement.
Under the terms, Elliman has until July 2, 2029 to pay back the loan with annual interest rates varying from 7 percent to 8 percent depending on whether the company pays in cash, due each year, or in kind, due twice a year.
The investment comes with a seat on the company’s board of directors, which will be filled by Kennedy Lewis co-managing partner David Chene. Elliman is also appointing Patrick Bartels Jr., an independent director with Redan Advisors. The two will replace Ronald Kramer and Lynn Mestel.
The announcement follows a period of financial pressure for the company, including seven consecutive quarterly losses and an eight-figure deal to settle antitrust lawsuits over broker commissions. Elliman finished the first quarter of 2024 with a $42 million net loss and revenue below its year-ago total.
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But early estimations for the second quarter indicate that Elliman could have a rebound in store. Before auditing, the company expects its gross transaction value to land somewhere between $10.25 billion and $11.25 billion.
That estimation is significantly higher than the $7.1 billion the company reported in the first quarter, which is typically a slower sales season compared to the second quarter. Elliman posted a gross transaction value just under $10 billion in the second quarter of last year.
The loan announcement doesn’t appear to have impacted the company’s share price, which hasn’t cracked $2 since March. The firm’s share price was $1.08 as of 12:00 p.m. Tuesday.