Explainer: Elliman’s Abrupt Transition of Power, New CEO

Howard Lorber’s decades-long reign at Douglas Elliman ended abruptly on Tuesday when the firm announced he was retiring from his role as CEO and chairman — effective immediately.

The 76-year-old executive is exiting the company as it battles a perfect storm of financial woes, pressure from shareholders and reports that its leaders were aware of allegations that two of its former top brokers, brothers Tal and Oren Alexander, drugged and sexually assaulted women during their tenure at the brokerage.

The sudden transition marks the end of an era for Elliman, which has been led by Lorber for more than 20 years. It’s the most significant leadership shakeup at the firm since Dottie Herman, who bought the firm with Lorber in 2003, stepped down three years ago, after selling her stake for $40 million in 2018. Lorber’s contract ran through the end of the year.

The firm declined to disclose the reason for Lorber’s sudden retirement, though it ruled out any clash in a Securities and Exchange Commission filing. The former chairman was mentioned in an invitation to an event with the company’s new development marketing arm in New York on Wednesday, which was emailed to agents on Oct. 17.

Elliman notified the SEC and issued a press release about Lorber’s retirement at 5 p.m. on Tuesday and sent an email to agents and employees about half an hour later. The firm did not include a statement from Lorber in either the release or internal email.

“To the talented Douglas Elliman community, I am excited to get to know each and every one of you as we together continue executing on our strategic vision, building on our industry-leading position, and maximizing long-term shareholder value,” Liebowitz said in a statement included in the email.

“I am confident that Douglas Elliman’s brightest days are ahead.”

Elliman’s next chapter

The company has been quiet about celebrating the legacy of its longtime leader, limiting its statement to acknowledging its “deepest appreciation” to Lorber for his “years of dedication and hard work.”

Elliman spent the majority of its announcement highlighting background information on Liebowitz, who has served on the board since the firm spun off from Vector Group in 2021. It’s unclear when Liebowitz was tapped to be the next generation of Elliman’s leadership. A spokesperson for the firm declined to comment on the timeline.

Liebowitz, who like Lorber is based in South Florida, has flown under the radar in real estate circles, though he has partnered with developer Russell Galbut. He purchased half of the Mondrian Hotel in Miami’s South Beach from Galbut in 2019 and is redeveloping the property. A year later, the two raised $115 million through a special-purpose acquisitions company.

His corporate leadership roles include serving as the CEO and chairman of printing ink company Nocopi Technologies and leading insurance advisory firm Harbor Group until its acquisition last year.

In his new role, Liebowitz is tasked with steering the company back into the black after two years of cost-cutting and failing to turn a profit or break even.

In his statement, Liebowitz called Elliman’s new era one of “growth and diversification,” pointing to what he described as “a strong balance sheet” and “robust pipeline” of new development projects.

His characterization painted a rosy picture of a firm struggling to rebound since the market downturn in late 2022.

Mounting scrutiny and a streak of losses

Elliman’s stock price has plummeted since its debut, dipping as low as $1. Its market capitalization is now around $150 million, just a fraction of its $900 million valuation three years ago. The firm also took out a $50 million loan with asset manager Kennedy Lewis, which if converted into equity, would significantly dilute ownership.

The firm’s losses pushed one shareholder, Brad Tirpak, to issue a letter calling for Elliman to begin a search for a new CEO. The investor took aim at the chairman’s compensation, which totaled around $4.7 million.

Tirpak criticized Lorber for collecting the full portion of his bonus tied to diversity, equity and inclusion as lawsuits surfaced against the Alexanders, who launched their career at Elliman before leaving to start their own brokerage, accusing them of raping and sexually assaulting women in New York.

The New York Times reported that Lorber was aware of at least one incident where Tal and Oren allegedly drugged an agent, though Elliman denied the story was ever tied to the Alexanders and said no formal complaint was filed.

Shareholders ultimately backed Lorber’s seat on the board and his pay package at the firm’s annual investor meeting in August.

Liebowitz was among the firm’s leaders who bought shares in Elliman earlier this summer, as the company’s stock price tumbled. In July, he bought nearly 200,000 shares priced at $1.18 each, according to Simply Wall St. The stock rose 10.8 percent Wednesday to $1.59 per share.

In total, the executive owns roughly 500,000 shares in the company, representing less than a 1 percent ownership stake.

Lorber owns more than a 7 percent stake in the company, including 6.5 million shares. According to an SEC filing, the former chairman had nearly $5 million worth of unvested shares, which will now be canceled.