Douglas Elliman Profits Falls; Brokerage will reduce office space

Howard Lorber by Douglas Elliman (Getty, iStock)

In his second earnings report after being split from a tobacco company, Douglas Elliman tackled a stark reality: running a profitable brokerage is hard.

Net income fell more than 50% to $6.5 million in the first quarter from $14 million a year earlier.

Consolidated operating income was $7.9 million, compared to $14.2 million a year ago. Just a quarter earlier it was $20.1 million.

But not all of Elliman’s numbers were down. Consolidated revenues reached $308.9 million, an increase of 13% or $36.1 million over the prior year period. This is due in part to Elliman’s real estate brokerage segment which reached a gross transaction value of approximately $11.7 billion, compared to $10.1 billion in the first quarter of 2021.

Over the past year, the average home price in company-managed sales was $1.62 million, indicating the expensive housing markets in which it operates.

New York City remains Elliman’s largest market with $17.3 billion in gross transaction value over the past 12 months. South Florida was not far behind with $14.7 billion.

The housing market has been hot for most of the pandemic, thanks to low inventory and mortgage rates, accelerated moving plans, the search for more space and second homes, among other factors.

However, there are signs that rising mortgage rates and rising home listings will end the real estate gold rush. Active listings were down 12.2% year over year in April, but that was the the smallest such drop since December 2019, according to

Chairman and CEO Howard Lorber, however, said the prospect of more expensive mortgages will further motivate Americans to buy homes.

“What I’ve seen in the past over the years is that when rates start to go up, it gets people into the market faster because they don’t want to be pushed out of the market,” Lorber said. on a call with investors. .

The brokerage continues to diversify into new markets, such as Dallas, where it recently hired 60 agents. Yet when asked about office space, Lorber had an answer that probably wouldn’t amuse his business counterparts.

“As the leases start to come due, we will consolidate and save substantial money on rent over the next few years,” Lorber said.

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