Residential brokerages fall back to Earth in 2022, and made some momentous moves along the way.
After a decade of ruthless expansion that saw it become the largest brokerage by volume, Compass shifted its focus to profitability, as questions swirled about its financial health.
There were several high-level shakeups across the industry, as brokerages said goodbye to C-Suite executives in an effort to streamline their operations. None were as big as Coldwell Banker CEO Ryan Gorman’s departure from the Anywhere subsidiary, a move that brought Anywhere’s leased and owned brokerages under the supervision of a single executive.
Several brokerages joined forces in an attempt to keep up with the big fish, including Level Group joining Oxford Group, and The Agency acquiring Triplemint.
Berkshire Hathaway Home Services, a major player nationally but a small fish locally, started its play to rise through New York City’s residential brokerage ranks by reintroducing longtime Douglas Elliman executives Steven James and Brad Loe, which Berkhsire poached last year.
Here are the biggest residential brokerage stories of 2022:
The Agency acquires Triplemint for NYC debut
The Agency and Triplemint joined forces in May, after months of speculation that a deal was imminent.
The deal gave The Agency, a Los Angeles based firm, a foothold in New York City, and saw Triplemint founders David Walker and Philip Lang stay on as chief strategic officer and chief business officer at The Agency. The financials of the deal were not disclosed.
Triplemint’s staff of over 75 software engineers, data scientists, marketers and strategists, as well as their 250 agents, joined The Agency’s in-house teams and agent roster of over 1,000.
Triplemint, home to “Million Dollar Listing New York” star Tyler Whitman, had been on a growth spurt in recent years, opening three new offices in the tri-state area last year on the heels of expansions to New Jersey, Westchester County and the Hamptons.
Oxford Property Group and Level Group joining forces
Less than two months after The Agency took over Triplemint, Oxford Property Group and Level Group, two of the largest 100-percent-commission firms in New York City, announced a merger of their own.
The merger, which created Oxford-Spire-Level, brought the number of brokers working under the Oxford umbrella to nearly 1,000, with the vast majority of them operating in the New York City area. Last year, Level Group ranked as The Real Deal’s 22nd largest NYC brokerage by sales volume, and Oxford ranked tied for 24th.
The merger made Oxford-Spire-Level the sixth largest New York firm by headcount, with 814 brokers, according to data collected by The Real Deal.
“We’re actively on the hunt for other companies,” said Larry Link, Level Group co-founder and president.
Link stayed on as president of Oxford-Level-Spire. Link said the merger was first discussed in 2016 but set aside while he and Level Group co-founder Michael Greenberg grew the development side of the company. Greenberg’s death in 2021 was one of several factors that led to the merger happening this year. Another was the calculation that greater scale would equate to greater agent support.
The 100-percent-commission model allows brokers to pay a $495 monthly fee and in exchange keep all of their commissions, or pay $99 per month and pay a 10 percent split with the brokerage.
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Berkshire Hathaway HomeServices wants to be a New York contender
The past year saw the return of two big-name Douglas Elliman executives to the New York City market — but this time with Berkshire Hathaway.
Steven James and Brad Loe jumped to Berkshire in 2021 but had to wait out the year-long non-compete in their Elliman contracts. With that out of the way, Loe and James took the reins of Berkshire Hathaway HomeServices New York Properties with the aim of beefing up the firm’s headcount and sales volume.
By July, the pair had recruited 17 brokers from Elliman, including Cynthia Jacinta Keskinkaya, a broker ranked in Elliman’s top 75 in Manhattan. They weren’t on pace to make their stated recruitment goal of 125 by the end of the year, but aim to have 150-200 brokers by the end of 2023 spread across four offices.
James and Loe said they’re betting that an old-fashioned, shoe-leather approach to recruitment will top a glitzy pitch about technology.
“We’re not looking for vast numbers for numbers’ sake, we want people of quality that want to grow their business and that want to be part of a culture,” James said. “We’re going back to the old method of really working closely with your agent staff and team.”
Compass loses $101M; will no longer offer equity to new agents
The steep losses revealed in Compass’ second quarter earnings were down from the first quarter, but marked big news as the brokerage announced the end of its agent equity program and a cost reduction program.
The call represented a watershed moment for Compass, as it abandoned its aggressive growth strategy and for the first time aimed for profitability as a result of its biggest backer, Softbank, experiencing financial troubles due in-part to WeWork’s collapse.
Compass announced a $320 million cost reduction program during the call and initiated two rounds of layoffs shortly after in which it laid off 800 tech employees, including its chief technology officer. The company said the jobs were no longer needed as a result of Compass completing its $900 million tech platform.
All of this transpired without a CFO, as roughly three months — an unusually long time for a publicly traded firm — passed before Compass announced Kalani Reelitz would take over for Kristen Ankerbrandt, who left in September.
But there are reasons for optimism: Compass’ stock rallied after its third quarter earnings call, during which it revealed more losses but growing market share. And if it can maintain its current revenue while executing the rest of its cost reduction strategy, it’ll hit the black.
Ryan Gorman out as Coldwell Banker CEO
Anywhere earlier this month announced Ryan Gorman’s 18-year tenure with the firm will end after the first quarter of 2023. Anywhere said the decision was made to streamline operations: Gorman oversaw Coldwell Banker, the real estate conglomerate’s owned franchise, while Sue Yannaccone oversaw the firm’s franchised brands. Now, Yannaccone will oversee both, eliminating Gorman’s $3.5 million compensation package.
The circumstances around Gorman’s departure remain unclear, as the executive has been active on the media circuit and is slated to speak at an Inman event in January.
Gorman, who was tapped to head Coldwell Banker in 2020, oversaw 100,000 agents across nearly 3,000 offices worldwide. He also oversaw the acquisition of Frederick Peters’ Warburg Realty, one of the last independent brokerages in the city.