The Corcoran Group is casting a wider new development net.
The residential brokerage — already a top dog in the business thanks to subsidiary Corcoran Sunshine Marketing Group — is actively going after smaller condominium projects that will be marketed by its agents.
Historically, the firm has maintained a siloed approach, keeping its resale and new development businesses almost completely separate and, through Corcoran Sunshine, employing dedicated on-site sales teams.
But in an attempt to retain agents who want to work on new developments, Corcoran has tapped John Felicetti, a Corcoran Sunshine executive, as its first vice president of new development. In that role, Felicetti (Corcoran Sunshine’s former director of marketing and public relations) will help Corcoran agents with pitching, pricing and marketing new projects. Corcoran agents will now be able to “fully capitalize on the opportunities new development presents for growing their business,” CEO Pam Liebman said in a statement.
To be clear, Corcoran isn’t scrapping an approach that’s made it the top marketer of new condos in the city. Felicetti said he’s focused on projects with 20 units or fewer that may not warrant the heft of Corcoran Sunshine, which comes at a premium.
“The bigger projects have gone to Corcoran Sunshine because it has the resources,” said Felicetti, who said Corcoran’s already signed a 10-unit project at 253 Tompkins Street in Bedford-Stuyvesant. “I believe this will help Corcoran agents get more new development business.”
In a statement, Corcoran Sunshine president Kelly Kennedy Mack said smaller projects represent an “incredible growth opportunity.”
In Manhattan alone, the pipeline of new condo inventory is massive. Some 7,900 new units are expected to hit the market in 2019, according to appraisal firm Miller Samuel, compared to an average of 3,000 to 4,000 over the past few years.
But new development sales dropped nearly 22 percent to 360 during the third quarter of 2018, according to Miller Samuel.
Founder Jonathan Miller chalked up Corcoran’s evolving model as a reaction to the market. “There’s such pressure in new development to bring lower-priced or more modest priced product to market,” he said. “There’s a strong demand for that, it’s just hard to put that type of development together.”
Corcoran’s approach to new developments to date has been an outlier among firms with more fluid lines between their resale and new development arms. Douglas Elliman Development Marketing, for example, frequently taps prominent resale agents like Fredrik Eklund, Raphael De Niro and others to generate buzz for projects.
Terra Holdings — the parent company of Brown Harris Stevens and Halstead Property — also allows resale agents to participate in new developments, and goes after big and small projects alike. “Our philosophy is, we want everyone to have the same experience, which is why we’ve always done it as one entity,” said Stephen Kliegerman, president of Terra Development Marketing.
Still, Liebman has long defended Corcoran’s strategy by pointing to its results. The firm ranked No. 1 on The Real Deal’s most recent ranking of new development firms with more than $9 billion in sales between June 2014 and May 2017. Douglas Elliman was No. 2 with $5.9 billion in sales during the same time.
Over the past few years, Corcoran has lost agents to other firms like Elliman and Compass that promised more exposure to new development.
In 2014, partly in response to feedback from agents who wanted new development work, Corcoran appointed Gordon Hoppe, a longtime Corcoran Sunshine executive, to head new development sales at both Corcoran and Corcoran Sunshine. But the job was immense, and Corcoran Sunshine commanded most of his attention.
Felicetti said he will report both to Hoppe and Bill Cunningham, Corcoran’s president of sales. “Today’s little developer is potentially tomorrow’s mega-developer,” he said. “Having Corcoran get in on the ground floor with these people is so important. So as the firms mature, we can mature them up through the company.”