Douglas Elliman Gets Even Bigger

By
Real Estate Agent

Douglas Elliman doesn’t have the appearance of a real estate company that needs to grow much larger. The behemoth of residential brokerage firms is already the third largest in the whole of the USA, employing over seven thousand people within and outside of its 113 offices nationwide. They’re one of the biggest power players in the whole industry.

Despite that, they felt like they had a missing patch of territory within Florida, and they've moved to acquire it. You can find Douglas Elliman offices in Palm Beach, Fort Lauderdale, Aventura, Jupiter, Wellington, South Beach, Delray Beach, and Miami already. You will shortly be able to add St. Petersburg to that highly desirable collection of territories.

On February 5th, the company
announced that it had agreed on a deal to acquire the well-respected St. Petersberg real estate company Strickland Property Group. The precise financial terms of the agreement have not been disclosed, but must have been considerable considering the profile of Strickland within the area. Owned by Bonnie Strickland since the company was formed, the merger sees Strickland sign away the fruits of her life's work to Douglas Elliman, so it's fair to assume that they've paid for her retirement, although she's staying on within the company for the foreseeable future. 

Howard M. Lorber, the chairman of the company, was quick to pay tribute to Bonnie and her ‘remarkable team', going on to say that Douglas Elliman had considered a number of potential acquisitions within the St. Petersburg area, but that the Strickland Property Group had quickly been identified as the best and most logical option. The property market in St. Petersburg has remained steady and constant in the face of uncertain economic conditions, and in acquiring Strickland, Douglas Elliman also inherit a team of agents with unique knowledge of the area. The wording of the statement announcing the deal strongly suggests that the existing staff will be kept on, which is always pleasing to hear when mergers occur.

Tampa Bay has been maturing and emerging as a desired location for both young professionals and retirees throughout the past decade, with excellent healthcare, education, and cultural facilities within its borders. The area was apparently the missing piece of the puzzle for Douglas Elliman, and they'll be happy to have found it and secured their piece of land.

In doing so, the brokerage has assembled what looks like a winning line in Florida. To borrow a comparison from the world of gambling, the more matching symbols you have on your reels, the higher the payout when a winning line comes in. That’s the strategy when you’re playing
online slot games, and the same is true when covering geographic areas in real estate. Ensure you have enough visibility and territory covered, and you have more chance of customers finding you. With so many offices in the Florida area now, and every major market in the state catered for, Douglas Elliman has all their matching symbols lined up, and now they can sit back and wait for the jackpot to roll in.

The decision to focus on Florida may have been inspired - at least in part - by recent tax reform bills that have affected many real estate brokers in the New York area. The unpopular reforms have impacted the maximum deductions against tax that can be applied for property, local and state tax. By contrast, real estate in Florida costs less, and isn't subject to any state income tax at all. That not only makes conditions for real estate businesses better, but it also makes the state more financially attractive to workers. Anyone looking to relocate from New York for financial reasons in recent months is likely to have at least given Florida serious consideration. Where people are moving, there's money to be made for real estate brokers, and that's what Douglas Elliman are looking to pick up.

Bonnie Strickland has been involved in real estate for many years, but only took the step of forming the Strickland Property Group in 2015. With her contacts and experience, she was able to hit the ground running, and the firm's trading record in its few years of operations has been impressive. In total, the company has been responsible for the sale of more than $350m worth of property, with a healthy average price-per-sale of $810,000. That means not only do Douglas Elliman have the advantage of planting their feet in a fresh territory, they also inherit a potentially lucrative book of clients.

Including Bonnie Strickland herself, the Strickland Property Group comprises of seventeen members of staff, and historically have focused their activity on highly-prized waterfront properties. Of the 52 properties that were listed for sale in the Snell Isle area of St. Petersberg last year, the Strickland Property Group sold 19 of them. Within those sales was one huge individual deal for a $4.7m mansion.

Bonnie Strickland's new title within the acquired company is ‘executive director of luxury sales,' and she remains in charge of the team she assembled, which for the time being will still run under the Strickland Property Group name, as Douglas Elliman has opted to keep it on as a trading style.

With the deal complete, Douglas Elliman has more than one thousand associates within the state of Florida, and have reached truly gargantuan proportions. Lorber has suggested that they could still yet look to be expanding further, but don't have any immediate further purchases on the horizon at this time. Keen to dispel suggestions that the broker is looking to create a monopoly and drive other brokerages out of business, he said that they have no desire to become the only player active in the market, and they'll only do deals when it makes sense to them both in terms of the finances and the ‘cultural fit' of any potential purchase with Douglas Elliman.

Their position as the third-largest brokerage in the USA isn't under immediate threat from anyone else, but they have some way to go before they can challenge for second place. That currently belongs to the Warren Buffet-owned Berkshire Hathaway Home Services, which boasts over 1,300 offices and employs nearly 50,000 people. It will still take the work of many years for Douglas Elliman to reach that level, and that's assuming they even want to do so.

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