Elliman’s New Era Begins With $27M Loss In Third Quarter

Douglas Elliman’s new CEO and chairman is charting a path forward for the company after the end of executive Howard Lorber’s decades-long reign.

Michael Liebowitz took over from the 76-year-old executive after his abrupt retirement last month and promised a new era with a fresh slate of leaders at the helm.

“It is a new day at Douglas Elliman,” Liebowitz told The Real Deal in his third week on the job. “It’s a departure from the past and a new generation of leadership.”

The firm started its next chapter by announcing rocky results, logging its ninth straight quarterly loss. Elliman reported a net loss of $27 million in the third quarter, significantly more than the $4.9 million it lost in the same period last year and the $1.7 million loss in the second quarter.

Last quarter’s loss included a $20 million non-cash charge tied to the $50 million convertible loan it received from asset manager Kennedy Lewis earlier this year. The firm’s stock price rose more than 70 percent between the loan’s execution in July and the end of the quarter.

Elliman’s share price was just under $2 in the hour after the call.

Liebowitz laid out his priorities for the company during its third-quarter earnings call on Thursday. Among the new additions is a plan to diversify revenue streams and expand its property management business into Florida.

Liebowitz said the firm created an acquisitions unit tasked with identifying ancillary business opportunities, including title, escrow, staging and insurance brokerage.

“Diversifying this business model is one of our primary goals,” Liebowitz said. “We all understand the real estate business has a lumpy nature to it, and diversifying the business and doing acquisitions and organically starting and growing businesses that sit around the agent will greatly enhance our agent base.”

Liebowitz’s goals mark a departure from the previous regime, which drew criticism from analysts for failing to provide stockholders with a plan to bring the firm back into the black beyond cost cuts.

The firm ramped up its expense reduction campaign last year as high mortgage rates and low inventory stalled home sales. Its cuts so far have targeted corporate sponsorships, office leases and staff, with the firm laying off 100 employees last year.

Elliman is continuing to cut costs, including an $11.9 million annual reduction in its brokerage segment’s operating expenses. The company reported cash stores of $151 million at the end of the third quarter.

Elliman posted revenues of $266 million, up from $252 million in the third quarter of 2023. It lost $1.4 million in adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — compared to a loss of $3 million in the same period last year.

Lorber suddenly stepped down last month after 20 years atop the company. Elliman initially said it was Lorber’s decision to step down, but the Wall Street Journal reported days later he was pushed out by the board after an internal investigation into the company’s culture.

The company announced a week after Lorber’s departure that Scott Durkin, the CEO of the firm’s brokerage segment, was terminated. Richard Ferrari, the head of the firm’s New York and Northeast operations, took over Durkin’s post.

Elliman hired an executive recruiting firm to find a replacement for its former chief technology officer David Ballard, who exited the firm on Oct. 30.

Liebowitz forecasted relief for the industry with the end of the election and Donald Trump returning to the White House.

“We’re getting to a part of the cycle that, with the election being over, there’s going to be significantly more activity,” Liebowitz said.

He said he expected the incoming president to put pressure on the Fed to lower rates and reduce regulations to boost development.

“You’ve got a real estate guy in the White House that is probably going to make regulation significantly easier, which makes building permits significantly easier to get, which just spurs activity.”