Douglas Elliman sold $6.6 billion worth of real estate during the third quarter and pulled in revenue of $186 million during the same period. But due to rising new development costs, the profit of its parent company Vector Group took a hit.
Elliman’s revenue in the third quarter was 21 percent higher than the $154 million the firm earned for the same period last year, chair Howard Lorber, who is also CEO of Vector, said during Vector’s earnings call Tuesday.
“The New York City market remains robust, particularly as it relates to residential real estate,” he said. During the third quarter, 52 percent of Elliman’s listings sold at or above the asking price, and the brokerage has a “very good backlog” of new development sales, he added.
Vector’s revenue in the third quarter were $450 million, a 7.1 year-over-year increase. But its profit fell nearly 19 percent year-over-year to $12.2 million, and its expenses rose 26 percent year-over-year to $121 million.
“The new development business is a business that requires lots of money up front,” said Lorber, who acknowledged that profits so far this year fell short of his expectations. “The winter was bad, the jobs are behind, there will be very few closings this year and the rest of the closings will be in the first and second quarter of 2016,” he said. “The big profits should start coming in [during] the first half of 2016.”
Besides owning Elliman, Vector has invested over $200 million in 14 development projects through its New Valley subsidiary, including Fisher Brothers and Witkoff Group’s 111 Murray Street and Michael Shvo and Bizzi + Partners’ 125 Greenwich Street.