Realogy weathers challenging Q2, vows to fight rivals rampant agent poaching CEO Richard Smith talks action plan to retain top producers
Pam Liebman and Richard Smith
Even the Goliath of real estate companies isn’t immune to agent poaching.
In reporting a “challenging” second quarter, Realogy Holdings — the New Jersey-based conglomerate that owns the Corcoran Group, Sotheby’s International Realty, Citi Habitats and other brokerages —cited softness in the high-end market and vicious competition for top-producing agents.
And while chairman, CEO and president Rich上海千花社区 ard Smith didn’t drop any names during a second-quarter earnings call Thursday, analysts reading between the lines know he was talking about Compass , the three-year-old New York City startup that’s in the middle of a fundraising push that could value it at $1.3 billion.
Last year, Corcoran s Soho manager Gene Martinez jumped to Compass as did Patrick Brennan, a senior managing director of Corcoran’s Park Slope office, who recruited several other Brooklyn agents to the brokerage.
“The market is always competitive for agents,” Smith s新上海贵族宝贝论坛 aid, while noting the “trend has recently become more pronounced, as new entrants to the industry as well as assorted well-established firms use short-term economic incentives to build market share.”
Amid that changing landscape, Smith said Realogy is fighting back.
“We intend to be aggressive in retaining our top-producing agents and sales associates,” he said. While he was short on actual details, he said Realogy has developed a solid “action plan” to retain and recruit agents, the benefits of which he said will be seen in the next 12 to 18 months.
The hope, Smith said, is that inves上海千花网 ting in agent recruitment and retention would bring in more revenue as the high-end market recovers.
Overall, Realogy reported revenue of $1.66 billion during the second quarter, up 1 percent from 2015’s second quarter thanks largely to a 3 percent increase in transactions across the company. Net income was $92 million for the quarter, down from $97 million in Q2 2015. Earnings before interest, taxes, depreciation and amortization (EBITDA) was $275 million, up 4 percent.
But even as sales were up across the company, Realogy’s NRT division which owns and operates Corcoran, Sotheby’s and Citi struggled. It posted a 1 percent drop in transaction volume and 2 percent drop in average sale price. And NRT’s revenue for the second quarter, $1.268 billion, dropped $21 million compared to the same period in 2015, thanks to slower sales in the $2.5 million-plus category.
During the second quarter, sales above $2.5 million represented 16 percent of NRT’s volume, down from 19 percent in 2015’s second quarter. “High-value property sales are still occurring, but in smaller numbers,” Smith said.
Some 60 percent of NRT’s revenue comes from key markets including New York, Florida and California, with the New York tri-state area accounting for 24 percent of NRT revenue, executives said on[……]
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