Before Keller Williams NYC was roiled by a management crisis, layoffs and agent defections, the franchise was pocketing million-dollar profits each year.
Keller Williams NYC — founded by Ilan Bracha and Haim Binstock in 2011 — generated around $1 million in profits each year since 2014, according to archived issues of OutFront magazine, the Texas-based franchise brokerage’s quarterly magazine.
Although results varied each quarter, the firm’s Manhattan offices saw a three-year period between 2014 and 2017 where quarterly profits ranged from $117,682 to $315,286, according to the publication.
When New York City’s residential market peaked in 2015, Keller Williams’ Manhattan offices were among the company’s most profitable regions, or market centers, nationwide. During the third quarter of 2015, Keller Williams NYC raked in $311,752 in profits.
The Manhattan offices generated $222,527 in profits during the first quarter of 2017, but did not make the list the following quarter. More recent disclosures weren’t immediately available.
Brokerage margins across the board are notoriously thin, and if anything, traditional firms have seen profits dwindle or even slide into the red.
During the first quarter of this year, Realogy — which owns the Corcoran Group and Citi Habitats — reported a $67 million loss, compared to a $28 million loss in 2017’s first quarter. Douglas Elliman lost $8.1 million during the quarter, compared to a $100,000 profit in 2017’s first quarter.
Keller Williams’ Midtown office — which is run as a separate business from Keller Williams Tribeca — has undergone major staffing changes over the last few months. The firm purged inactive brokers earlier this year and the office underwent a “restructuring” in March, in which seven managers were laid off (two were kept as agents). Scores of brokers left for competing firms and even Keller Williams Realty, a Brooklyn-based franchise. And last week, Josiah Hyatt, the office’s interim leader, left to start his own firm. CEO Lezley Charles was reportedly laid off earlier this year.
Sources said Charles oversaw a massive hiring spree, but despite bulking up, Keller Williams NYC did fewer deals in 2017 than it did in 2016, according to The Real Deal’s annual ranking of top firms. The Manhattan offices of Keller Williams closed $193.1 million in sell-side deals in 2017, down 18 percent year over year.
“While we acknowledge management and other changes have affected areas of our business, including the agent count, strategic decisions were made by our board of directors to remain a profit-share company in a shifting market,” Bracha said in a statement.
Keller Williams’ two Manhattan franchises had 465 agents in May, a 43 percent drop from TRD’s January ranking.
Sources said that in recent months, owners of the Midtown operation have also been considering sub-subleasing part or all of its 29,000-square-foot office at 1155 Sixth Avenue.