Independent real estate firms in New York are responding to increasing consolidation in the residential sector, according to a May 9 announcement. Industry leaders discussed the implications of recent mergers and acquisitions at The Real Deal’s New York Forum, following Compass’ acquisition of Corcoran’s parent company, Anywhere Real Estate.
The issue is significant as smaller firms try to maintain their position while larger companies grow through mergers. Concerns were raised about how this trend could limit opportunities for agents and reduce diversity among brokerages.
During a public discussion, Brown Harris Stevens CEO Bess Freedman addressed Corcoran president and CEO Pam Liebman regarding the effects of being part of a larger corporation. Freedman said, “If you want to work at Brown Harris Stevens, we believe in marketing your properties to everybody.” She also urged Compass leadership to open its private listings network: “She should encourage Compass, Rob [Reffkin], to make sure that they take down the wall for the private listings network and share those listings with everybody.”
Freedman further commented on agent experience within large organizations: “Sometimes when it gets too big — and that works for some people — but agents can get lost in the sauce,” she said. “You want to be able to talk to your manager or see what’s happening and talk to your colleagues.”
Jed Garfield, managing partner at Leslie J. Garfield, highlighted his firm’s approach amid industry changes: “Consolidation creates a vacuum, and that vacuum is exactly where we’re operating,” Garfield said. “When firms get bigger, the client experience can get thinner. We’ve built 50 years of business on the opposite model.”
Other brokerages are seeking partnerships with larger networks while maintaining independence. Dezireh Eyn, CEO and co-founder of Platinum Properties—recently rebranded as Platinum Forbes Global Properties—said last month: “One of, if not our biggest strengths has been the fact that we’re small and nimble, and I just don’t think it’s possible to be that way when you’re a massive firm… We pivot on a dime because we can do that.”
In addition to industry shifts among brokerages, policy developments are affecting real estate practices in New York City. Governor Kathy Hochul has proposed an annual pied-à-terre tax on second homes valued at $5 million or more as part of her $268 million state budget proposal. While her office projects $500 million in revenue from this tax each year, an analysis by New York City’s comptroller estimates actual revenue may range between $340 million and $380 million.
Meanwhile, notable transactions continue despite these changes; this week saw a penthouse sale at Madison Realty Capital’s 16 Fifth Avenue close for $32.5 million—a reduction from its previous asking price.
