“I am not trying to be the next Barbara Corcoran,” Herman counters sternly.
“It’s not a bad comparison,” says Corcoran, ever the self-promoter and politician. “She’s self-made, and she’s a great competitor. She succeeded in coming into New York City from the suburbs when everyone else has failed.”
Corcoran even sent an inscribed copy of her book to Herman’s welcome-to-Manhattan party—in lieu of attending—in May at an Elliman manager’s Upper East Side apartment. Herman was 45 minutes late to the party, which didn’t make the best impression on women who are particularly prickly about punctuality. And looking for a reason to hate her.
“A couple of people thought that was very rude,” one guest says before adding, somewhat begrudgingly, “but she was very over-the-top, very friendly.”
To the members of the Old Guard, over-the-top friendliness and rudeness are to be avoided in equal measure. They pride themselves on secrecy, service, and experience. Alice Mason, who owns a firm with eighteen brokers, once lured clients with her A-list dinner parties, attended by everyone from Marilyn Monroe to Jimmy Carter. Now she’s cut back her signature evenings to just once a year—but swears she’d no more sell out to a big corporation than move out of her legendary rental. “My firm will be in business at least the rest of my life,” says Mason, who founded the company over 40 years ago and runs it with her daughter, Dominique Richard. “I would think we will always have very special clients. What we do is quite different from what the big firms do.”
The new-look brokers say, however, that they won’t be doing it for long. “I don’t think Edward Cave and Alice Mason will survive,” Liebman says without any hesitation. “Real estate is not about chatting at a dinner party anymore. It’s a big business, and you’re talking about big numbers.”
This year, Corcoran poached four of Mason’s top brokers, including Deborah Grubman (“Lizzie’s stepmother”), who recently sold Tommy Mottola’s townhouse for just under $20 million. Grubman denies that she jumped ship for a hefty bonus, saying she joined Corcoran for its effective marketing and advertising assets: “Someone in advertising can set a page for me better than I can do it.” She recently scored a hot exclusive with a high-tech presentation, which “at a small firm would have been difficult.” Now that Corcoran’s fancy Website features her exclusives, friends at dinner parties, self-proclaimed “real-estate junkies,” say, “ ‘Deborah, you have a new exclusive! It looks fabulous!’ That didn’t used to happen.”
Grubman says that in her thirteen years of working with Mason, she learned the business the old-fashioned way: studying the tenants and history of every top building and keeping the insider information in card files. “It was very effective,” says Grubman, “but the mentality was a more twentieth-century way of doing business.”
“Dottie is driving Barbara Corcoran crazy,” says a Corcoran executive. “She’s tired of hearing about her as the next Barbara Corcoran.” “I am not trying to be the next Barbara Corcoran,” says Herman.
“It doesn’t matter,” Mason says about the defections. “Whoever was with me in 1960 is not with me now. Nobody stays in a firm anymore in this age. They don’t even stay in a marriage.”
Herman and Lorber are just as confident as their Corcoran counterparts that the small firms will be swallowed by the giants, and are already plotting to acquire a few—though they wouldn’t name any targets. “I think if you look at trends, if you go to the West Coast, long-term brokers have sold out,” says Herman. “They don’t have any new brokers,” adds Lorber. “They don’t have the advertising and marketing budgets we have. And most of them are smart enough to sell their company before it becomes worthless, so they’ll try to make a deal with us, or with someone like us, to become part of something so it does survive.”
“Our industry has changed substantially in the last year and a half,” says Elliman vice-president Steven James, who’s back with the firm after a brief jump to Corcoran. “We’ve brought in a much more educated, younger group right out of college. They realize there’s no retirement, there’s no downsizing. You can take home millions of dollars.”
“A high-end real-estate agent is more important than an investment banker,” says Corcoran COO Scott Durkin. “The size of the portfolio is much bigger, and the return on the investment is much greater. A top broker takes home $1 million to $3.5 million a year.” This year alone, Corcoran averaged twenty new brokers a month, 40 percent men and 60 percent women. The average age was the mid-thirties, and they came from banking, retail, failed dot-coms, and advertising. “Five years ago, it was more female and more third careers,” says Liebman.
Since Herman bought Elliman, she’s also been poaching star brokers from smaller firms. Her most recent hire was Sachiko Goodman, from Sumitomo (21 brokers), who earned more than $2 million in commissions last year and has sold condos to the likes of Howard Stern. She also has an Upper West Side penthouse decorated with an Andy Warhol silkscreen of herself and a $30 million–plus estate in Greenwich, Connecticut. “Elliman has a great support system that I never had,” she says. Top broker Roberta Title jumped from Gumley Haft Kleier (25 brokers). She’s impressed that she no longer has to stuff her own envelopes and deal with clients complaining about a bare-bones Website.
But the Old Guard is not about to go quietly. “Someone at 960 Fifth Avenue isn’t going to call a stranger to sell their apartment,” says the director of Stribling’s private brokerage, Kirk Henckels, who often wears bow ties and is married to socialite Fernanda Kellogg, about the home of Edgar Bronfman Sr. and Gustavo Cisneros. “Let the big boys battle for the market share. We do what we do, and we like to think we do it better than anyone else and provide a higher level of service.”
“Do Harry Winston and Laurence Graff worry about Woolworth’s?” asks A. Laurance Kaiser IV, president of the twenty-broker firm Key Ventures Realty, who grew up on Park Avenue and has sold apartments to the likes of John D. Rockefeller III.
“I wouldn’t say that’s a good analogy,” says Herman about the Woolworth’s comparison, sounding slightly annoyed. “Douglas Elliman is a brand name,” adds Lorber—and he has a good point.
In 1911, Douglas Elliman founded the firm in a basement store at 421 Madison Avenue, back when uptown was still considered “the country.” He lived at 485 Park Avenue, apartment 1A, which was actually the second floor. Elliman is most famous for persuading the city’s elite to move from their dusty townhouses to luxury co-ops. His first major project was 998 Fifth Avenue, a towering twelve-story fortress built by McKim, Mead & White—complete with wine rooms and jewelry safes. In an influential coup, Elliman lured Elihu Root, a Nobel Prize–winning statesman, to rent there for $25,000 a year. Guggenheims and Astors soon followed. Now apartments in the building sell for more than $15 million to people like financier Steve Rattner of the Quadrangle Group and socialite Ann Slater. Elliman died in 1972, and the company changed hands several times. In 1999, Insignia Financial Group, led by Andrew Farkas (son of the retired chairman of the Alexanders retail chain), paid $65 million for the firm, then sold it to Herman and Lorber, who are nothing like any of its previous owners.
Elliman brokers welcomed their driven new leader, who they say is more personally invested in the firm than Farkas was.
“The only thing the company was missing was vision and a heart,” says Elliman’s top broker, Dolly Lenz. “The people who owned it before were too short-term. You know Dottie’s going to own this conceivably forever.”
A few days after the firm’s annual party, Herman fired Elliman CEO Jeff Wharton and moved into his sprawling office, with 180-degree views from walls of windows, at Elliman’s headquarters at 575 Madison Avenue. But she’s not getting too comfortable, since she’s close to signing a deal to move to a swanker office nearby.
“I’m sure it was traumatic to him, but what the company needed was a Dottie,” says Lorber, whose screen saver flashes photos of show dogs, including his beloved prize-winning cocker spaniel. “I think what the company needs is a real hands-on person who is a broker.”