It’s the kind of July night brides pray for, perfectly balmy with a slight wind. Outside Sagaponack’s Wolffer Estate, valets in crisp white jackets whisk away SUVs and offer glasses of chilled champagne. While negotiating the massive stone staircase, more than a few guests wonder what they could get for the German-style mansion. At least $50 million, whispers one. It would hardly be surprising if themanic broker in the yellow Dolce & Gabbana Capri pants showing off her new magnetic business cards had slapped them on any and every metallic surface.
“This is now the hot spot for weddings,” says Alan Rogers, chairman of Douglas Elliman, standing on the back terrace overlooking 55 acres of vineyard. “And this is a wedding.”
The marriage being celebrated joins the fortunes of Elliman, the venerable Manhattan real-estate firm, and Prudential, the Long Island residential giant run by powerhouse Dorothy “Dottie” Herman. Last spring, Herman snagged Elliman for $71.75 million with her partner, entrepreneur Howard (Nathan’s hot dogs) Lorber. And they’re not finished playing, either: Lorber’s got $150 million more earmarked for expansion.
“Everyone told me I was crazy, buying during the war,” says Herman, who at 50 vaguely resembles a tougher, taller Goldie Hawn with a flawless French manicure. “They were saying there was going to be another terrorist attack.”
Four months later, Herman’s ruling over a $6.5 billion empire and throwing quite a party—real crab!—for brokers from the megafirm’s 51 offices. Among other things, it’s certainly an upgrade from previous Elliman parties, held in Rogers’s Southampton backyard. Four years ago, caterers were feeding 250; since the nuptials, the combined head count tops 2,000, which makes the firm New York’s biggest.
“I had my sights on doing New York for the last eight years,” says Herman, in a white sundress and a deep salon tan. Though she says she loves the East End for its natural beauty, the brassy blonde with a pronounced mid-Island accent has no time for the beach. With daily workouts at 5:30 a.m., she does lunch only if she has a meeting at a restaurant, and fields up to 800 e-mails a day. Her cell phone never stops ringing, though most of her calls are directed to her assistant, RuthAnn Fay, who rarely leaves her side and sports a matching manicure.
“I told people from the day I opened in the Hamptons, I will be in New York City,” says Herman, who broke into the East End in 1997. Now she has six Hamptons offices and branches on the North Fork. “Well before I had Douglas Elliman, I had my Website say ‘from Montauk to Manhattan.’ ”
Even her competitors can’t deny she’s got a catchy, synergistic slogan. “It’s a nice ticket to have,” Corcoran CEO Pam Liebman admits perhaps a little too quickly.
A few years ago, before Barbara Corcoran cracked open the stodgy, discreet real-estate industry by transforming her firm into the industry’s answer to Starbucks, Liebman and Herman would have been unlikely picks to run the city’s two biggest brokerages. Neither is from Manhattan, much less Park Avenue. Liebman lives in New Jersey, and Herman has two homes on Long Island, and she recently rented a furnished apartment in Central Park South’s Essex House. Two decades ago, they might have made it as condo brokers, but they would never have been ruling over fiercely competitive firms jockeying to be the industry’s Goliath. Back then, it was a boys’ club, and the firms were more boarding schools than corporations.
“Douglas Elliman would roll over in his grave if he knew his company had become Costco so quickly,” says a member of the Old Guard. “He was the first great real-estate man.”
Herman’s not the new face of real estate, but she’s the official changing of the guard. It is no longer enough to be bred on Park Avenue—or work for someone who was—to sell $10 million–plus apartments. These days, a high-end buyer cares more about the quality of the digital photos on a firm’s Website than about whether the broker is toting a Kelly bag. The fabled Gold Coast—the obscenely expensive and exclusive stretch of real estate on Fifth and Park Avenues—has been colonized by outsiders like Herman and Liebman who twenty years ago probably wouldn’t have passed the co-op board at 820 Fifth.
“It’s much more democratic now,” says Brown Harris Stevens (BHS) broker Michele Conte, who specializes in marketing new condos. “The elite groups of brokers have been diluted. The profile has changed.”
“The industry is consolidating,” says Herman. “New York City is one of the last holdouts. It’s happening because the cost of doing business has drastically increased: It’s the technology, and top agents demanding much greater splits. Ten or fifteen years ago, they all got 50 percent. Now good agents require a larger percentage of dollars. Consumers expect a lot more advertising. Smaller companies end up getting bought out by bigger companies; they can’t survive and provide the services.”
The big firms, emboldened, are poaching listings and brokers from the Old Guard—as well as from each other. Take Edward Lee Cave, who owns an eponymous firm with 25 brokers and lunches at Doubles, the private club in the Sherry Netherland (where, incidentally, Lorber has a pied-à-terre). Last year, he started talks with BHS to forge a partnership; even if he remains independent, Cave will have to work hard to hold on to his top-producing brokers. He’s already lost one of his stars, Linda Stein—whose clients have included Sting and Steven Spielberg—to Elliman.
“It’s not as personal as Cave,” says Stein about Elliman. “There are people from all walks of life. Cave was like a family. There was real ethics and trust. You didn’t have to be afraid of your colleagues.”
The new paradigm is not widows or empty-nesters taking on real estate as a second or third career but young, ambitious college grads. With women like Herman at the helm, real estate is being run like a business. And the boys’ club is getting swallowed by corporate America, a place where firms have softball teams and massages at the office. It might as well be Silicon Valley circa 1999.
Barbara Corcoran was the radical. Ever since she began plastering her face on billboards three years ago, the industry has been infiltrated by the entrepreneurial New Guard, backed by corporate cash. Two years ago, Corcoran sold her company to NRT, Inc., the largest private real-estate-holding company in the country, for $70 million, but she remains Corcoran’s chairwoman.
“Dottie is driving Barbara crazy,” says a Corcoran executive. “She’s already tired of hearing about her as the new Barbara Corcoran.”