Syncopated Real Estate offers an integrated approach to property acquisition and asset disposition. As a South Florida brokerage we facilitate the buying, selling, and leasing of real estate in both residential and commercial markets. A strategic coordination with real estate professionals and funding services allows for innovative solutions. The boutique brokerage approach caters to the individual goals of buyers and sellers. This is accomplished through listening to market rhythms and having the dedication to discover value. The ability to connect with resources such as family offices, legal services, accounting professionals, and private funding groups, facilitates smooth transactions. This method achieves success while developing long term business relationships.
Sterling Bay just bought a Wynwood site for $18.9 million with plans to build an ambitious 10-story, mixed-use development.
The Chicago-based investment firm purchased the 500,000-square-feet property at 537-557 Northwest 26th Street and 530-550 Northwest 27th Street for $37.80 per square foot.
Sterling Bay received approval from the Wynwood Design Review Committee for the project, called 545wyn, in April. Plans include 298,000-square-feet of modern Class A office space and 26,000-square-feet of retail space.
The building will also include 420 parking spaces and a 18,000-square-feet tenant amenity floor, conference rooms, a wellness center and private tenant and open-air balconies.
The project is designed by the San Francisco-based architecture firm Gensler. It is expected to break ground by the first quarter of 2019.
CBRE is the exclusive office leasing partner for 545wyn, according to a release.
In Chicago’s West Loop, Sterling Bay has developed the global headquarters for McDonald’s. It also has plans to develop a $5 billion, 70-acre mega project in Chicago called Lincoln Yards.
A number of new projects are planned or have been recently constructed in Wynwood. Los Angeles-based CIM Group and One Real Estate Investment are planning to build a 12-story mixed-use project at 2201 North Miami Avenue.
And earlier this month, Quadrum Global bought a 30,000-square-foot property at 2217 and 2233 Northwest Miami Court, which could bring Wynwood its first hotel.
Goldman Properties also just completed the first parking garage in Wynwood at 301 Northwest 26th Street.
Real estate investment firm Asana Partners just bought the recently completed Warehouse District in West Palm Beach for $18.5 million, according to sources.
Johnstone Capital Partners, led by Edmund Hunter Beebe, redeveloped and sold the project, which consists of about 88,000 square feet of new commercial and retail space along Elizabeth Avenue, wedged between I-95 and Parker Avenue. Beebe is also a managing principal of Healthcare Real Estate Capital.
Johnstone Capital, a Palm Beach-based real estate investment firm, paid $5.7 million to assemble the six warehouses between 2015 and 2016, property records show. William Earl, vice president of Johnstone Capital, said the warehouse were “underutilized” when the firm bought them.
Warehouse District sold nearly fully leased to tenants that include the 14,000-square-foot food hall Grandview Public Market, VXIT, Palm Beach Squash Club, Steam Horse Brewing and the Japanese, British and German motorcycle retailer called Burn Up.
HFF’s Eric Williams, Manny de Zarraga, Danny Finkle and Luis Castillo represented both sides of the deal.
Built between 1925 and 1968, the warehouses sit on about 6 acres of land just south of the city’s downtown and near the Norton Museum of Art and the Henry Morrison Flagler Museum. Each building is connected by a pedestrian walkway which features a rail spur that was previously used by the former warehouse operators.
North Carolina-based Asana Partners acquires and redevelops retail properties in the United States and has a portfolio worth about $3 billion, according to its website. Over the summer, it paid $68.75 million for a seven-building, 61,400-square-foot retail portfolio in Miami Beach’s Sunset Harbour neighborhood.
Over the last 20 years, a neighborhood on Chicago’s near North Side once home to a notorious public housing complex has seen the greatest increase of residents earning more than $200,000 of any area in the U.S.
An analysis of U.S. Census data by consulting firm Webster Pacifics showed the Cabrini Green area of Chicago and a portion of the north suburb of Glenview now ranks in the top 10 in Census tracts with the greatest increase in high earners, according to Bloomberg.
Census tracts in New York came in at No. 9 and 10, while Washington, D.C., suburbs had four tracts in the top 10.
Rounding out the top 10 were the area surrounding Marsh Landing, a gated community in Ponte Vedra Beach near Jacksonville, Florida, and a neighborhood in Houston. Ten areas of Houston made the top 100 Census tracts on the list.
Nationally, nearly 7 percent of American households earn at least $200,000, the highest percentage in the Census Bureau’s American Community Survey.
The area around Cabrini Green in Chicago saw the concentration of high earners soar from zero to 39 percent since 2000, not long after the city began tearing down the complex and promoting redevelopment in the area. The Glen planned community in north suburban Glenview came in at No. 7 on the Webster Pacifics list.
The neighborhood with the country’s wealthiest residents is in Fisher Island in Miami, where the average income is $1 million higher than the second-wealthiest ZIP code, in the heart of Silicon Valley. [Bloomberg] — John O’Brien
Commercial real estate investors are looking at the difference between long-term interest rates and property yields and are seeing a sign the current market cycle is sputtering out.
That spread between rates and yields have reached their narrowest margin in more than a decade. For some market pros, that is enough to predict the real estate market is heading for a downturn, according to the Wall Street Journal.
Because investors often borrow in large amounts to buy commercial properties, higher borrowing costs means slimmer margins and less profit.
In the past, when the spread between costs and interest rates tighten, it is often followed by a decline in property prices.
The last time yields were this close to interest rates was in 2007, which preceded a 35 percent drop in commercial property prices nationwide because of the financial crisis.
In the third quarter of this year, the average rate borrowers paid on loans packaged into commercial mortgage-backed securities was 5.03 percent. That compares to the same period last year, when it was at 4.52 percent, the Journal reported.
Average yields, however, have remained the same during the same time period.
Some lenders are also stepping back from commercial real estate. Wells Fargo is one of them. The bank decreased its exposure to the sector to $110 billion this year, down more than 5 percent from two years ago. [WSJ] — Keith Larsen
Tom Elghanayan and his wife Madeline Hult Elghanayan paid $8.1 million for a home in Palm Beach, property records show.
The Elghanayan family is worth more than $2 billion as of 2015, according to Forbes. The family owns Rockrose and TF Cornerstone, both based in New York. Brothers Tom and Fred Elghanayan spun off from Rockrose and created TF Cornerstone in 2009. Their firm is developing a portion of Amazon’s second headquarters in Long Island City. Tom, whose full name is K. Thomas Elghanayan, purchased a nearly 98 percent interest in the 6,880-square-foot non-waterfront home at 235 Dunbar Road, with Madeline controlling a minority portion.
Records show 235 Dunbar LLC, led by attorney Maura Ziska, sold the house. The sellers are Palm Beach real estate investor Barbara Stovall Smith and her financier husband, Randall Smith, according to the Palm Beach Daily News. The home last sold for $6.18 million in 2013.
The property, which was built in 1936, includes a guest home and pool.
In November, TF Cornerstone signed a contract to buy a $300 million development site near Amazon’s planned Long Island City headquarters days before the e-commerce company made its official announcement. Tom is chairman of TF Cornerstone and his brother Fred is president.
Madeline Hult Elghanayan is a real estate broker with Douglas Elliman, ranked among The Real Deal’s top 10 new development closers in 2016.
The holiday shopping season is upon us, but from the looks of last week’s condo sales in Miami-Dade, consumers shied away from buying luxury condos.
The county recorded 122 closings for a total of $46.7 million, down from the previous week’s 143 closings for a total of $71.9 million. Condos last week sold for an average price of $374,812 or about $310 per square foot.
The priciest deal was at Miami Beach’s Edition Residences. After almost two years on the market, unit 1101 sold for $5 million or about $1,814 per square foot. Anna Sherrill represented the seller, and Juan Alvarez brought the buyer. Hotelier Ian Schrager co-developed the Edition, which was completed in 2015 after redeveloping the former Seville Hotel at 2901 Collins Avenue.
The second most expensive condo sale was the $1.96 million sale of unit 208-35 at Bleau Fontaine Condominiums. The unit sold for $1,960 per square foot. Marcela Quinones-Avila represented the seller, and Lizbeth Beauchamp brought the buyer.
Edition Residences, Miami Beach | #1101 | 667 days on market | $5M | $1,814 psf | Listing agent: Anna Sherrill | Buyer’s agent: Juan Alvarez
Tiffany at Bal Harbour, Bal Harbour | #1405 | 92 days on market | $850k | $421 psf | Listing agent: Teodoro Palmieri | Buyer’s agent: Lydia Eskenazi
Most days on market
Edition Residences, Miami Beach | #1101 | 667 days on market | $5M | $1,814 psf | Listing agent: Anna Sherrill | Buyer’s agent: Juan Alvarez
Fewest days on market
Aventura Marina Condo, Aventura | #UPH15 | 26 days on market | $1.015M | $340 psf | Listing agent: Adriana Planchart | Buyer’s agent: Dmitry Baranov
A Fort Lauderdale-based short-term rental operator allegedly scammed $20,000 from a Harvard professor who is a leading scholar on African American studies, according to court documents in a recently concluded civil case.
Henry Lee Gates Jr., director of the Hutchins Center for African and African American Research at Harvard University, won a default judgment to recoup his money against Jonathan Campau and Luxuri Management, a company that markets South Florida homes for short-term rentals.
Michael Schlesinger, a Miami-based attorney representing Gates, said Campau promised to rent his client a luxurious house in Hollywood that turned out to be a dump when the professor and his family arrived for their vacation in late December 2017.
“It was a bait and switch,” Schlesinger said.” It is a horrible situation for a person to shell out a lot of money for a house that was nowhere near what was advertised.”
Campau did not respond to emails and phone messages seeking comment. According to the Broward County Circuit Court docket, Campau never responded to the lawsuit when it was filed in July. Five months later, the default judgment was entered against him and his company.
According to the complaint, a Gates relative was looking for a luxurious vacation home on Airbnb when she came across a listing posted by Campau. It was a waterfront property listed as a “Spanish Paradise,” but Gates didn’t like it.
When Gates rejected that home, Campau showed the relative a Youtube video of another property he was allegedly marketing, the complaint states. The clip advertised the property as a “brand new, waterfront custom-designed, masterpiece in Hollywood golf estates. Every little detail completed to perfection,” according to the lawsuit. The rental also came with a personal chef who would cook one meal per day for the family.
Gates agreed to rent the house, but did not do so via Airbnb. Instead, he signed a short-term rental agreement with Luxuri Management on Nov. 27, 2017. The Harvard professor paid $20,000 to rent the property from Dec. 22, 2017 to the New Year.
When Gates and his family arrived at the house, they immediately encountered a host of problems with the property, the lawsuit states. For instance, the only pool lounge chair was completely destroyed and unusable, while other poolside furniture was rundown, dirty and stained. Gates alleges he had to rent three lounge chairs because Campau refused to replace the furniture or offer any meaningful solution. The Jacuzzi didn’t work either, according to the suit.
Inside the house, a portable air conditioner in one of the bedrooms was broken and the room was unbearably hot, making it impossible for anyone to sleep there, the lawsuit states. “Upon arrival at the property, the trash can in the kitchen was filthy and infested with insects,” the complaint alleges, adding that Campau wanted an additional $5,000 for the chef service after initially stating it was included in the $20,000.
By Dec. 23, 2017, just one day after Gates’ arrival, Campau admitted to the defects and offered to refund the full $20,000 if the family left the property, the lawsuit states. Gates found new accommodations and left on Christmas Eve. He did not receive the refund.
“Additionally, it was discovered that Campau falsely and deceptively held himself out as the property owner and as a result he had no legal right to contract with plaintiff,” the lawsuit states, adding that a realtor who really had the listing confirmed Campau didn’t own the home.
Schlesinger said South Florida has a growing cottage industry of individuals swindling out-of-towners with false advertising about short-term rentals. “What consumers are being shown and told on these websites is not accurate,” he said. “This is a fad to use home-sharing websites to commit fraud and theft.”
UPDATED, Dec. 18, 4 p.m.: 2018 proved to be an especially big year for hotel sales in South Florida with $2.8 billion in deal volume. That’s an increase of more than 340 percent from last year, according to Colliers International South Florida.
Of course, South Florida’s hotel industry was helped by the fact that no major hurricane or storm hit the region in 2018, as compared to the previous year when Hurricane Irma caused damage to existing hotels and forced closures.
Hotel sales are also increasing thanks to a boost in large institutional and private equity money flowing into the area. Warren Weiser of Colliers said he also expects more real estate investment trusts to consider investing in South Florida’s hotel market in 2019.
Overall, he said, demand for the asset class will continue to grow. “As long as long-term rates don’t skyrocket then the (hotel) sales will remain very strong,” said Weiser.
Brookfield buys Hilton Fort Lauderdale Marina for $171M
Perhaps no deal signified the big money push into South Florida more than Brookfield Asset Management’s $170.6 million purchase of the Hilton Fort Lauderdale Marina.
The Blackstone Group sold the hotel to Brookfield subsidiary Thayer Lodging Group for about $290,000 per key. The 9-acre property fronts the Intracoastal Waterway and includes a 33-slip marina.
Brookfield, one of the world’s largest asset managers with more than $285 billion in assets, also owns the Diplomat Resort & Spa in Hollywood.
Lon Tabatchnick and Starwood Capital Group sell Margaritaville Hollywood Beach Resort for $190M
Parrotheads are apparently flocking to Broward County.
In April, Denver-based KSL Capital Partners paid $190 million, or about $544,000 per key, for the Margaritaville Hollywood Beach Resort. Lon Tabatchnick and Starwood Capital Group sold the Jimmy Buffett-themed resort, a 349-room, 17-story hotel with eight restaurants and bars, an 11,000-square-foot spa, oceanside pools, a wave ride and 30,000 square feet of convention facilities.
Tabatchnick completed the $175 million development on 5 city-owned acres at Johnson Street and A1A in 2015.
AVR Realty buys Boca Raton Marriott for $69M
AVR Realty Co. paid $69.3 million for the Boca Raton Marriott at Boca Center in January, as Boca Raton continues its transformation into a corporate headquarters for tech companies.
New York-based Carey Watermark Investors sold the 256-key, 12-story hotel at 5150 Town Center Circle for about $271,000 per room.
AVR Realty, an investment and development company led by Allan V. Rose, also owns the Marriott Courtyard Convention Center Hotel in downtown Miami and apartment complexes in Davie and Pembroke Pines, according to its website.
Carey Watermark paid nearly $58 million for the Marriott in 2014.
Spanish investment group buys the Hall South Beach for $58M
In the most expensive hotel deal in Miami Beach since 2016, Spain-based Grup Peralada purchased the Hall South Beach hotel for $58.2 million.
Rockwood Capital sold the 163-key hotel at 1500 Collins Avenue to Grup Peralada for about $357,000 per room.
Grup Peralada is owned by the Suqué-Mateu family and has hotels, casino, wine and other businesses under its umbrella.
Rockwood, with offices in New York and Los Angeles, paid $34.5 million for the historic 123-room Haddon Hall and the adjacent 45-unit Camden Apartments in Miami Beach in 2013, according to data from Real Capital Analytics. The investment firm renovated the 1.4-acre property and re-opened it all as a hotel in 2015.
Fort Lauderdale Marriott Pompano Beach Resort & Spa trades for $45M
A company tied to New York-based Pan Am Equities paid $45.15 million for the Fort Lauderdale Marriott Pompano Beach Resort & Spa.
The 184,000-square-foot, 219-key hotel at 1200 North Ocean Boulevard includes about 8,000 square feet of meeting space and sits on nearly three acres of beachfront land.
An affiliate of the Carlyle Group and Urgo Hotels sold the hotel for about $206,00 per room. Carlyle and Urgo paid $8.55 million for the site in 2010 and completed the hotel in 2013, according to property records. It was the first new hotel to be built in the area since 2002.
The top 5 South Florida hotel sales in 2018
|1||Hilton Fort Lauderdale Marina||1881 Southeast 17th Street||Broward||382,709||$170.7M||Thayer Lodging||Blackstone|
|2||Margaritaville Hollywood Beach Resort||1111 North Ocean Drive||Broward||666,326||$97.9M||KSL Capital Partners||Starwood Capital JV The Lojeta Group|
|3||Boca Raton Marriott at Boca Center||5150 Town Center Circle||Palm Beach||176,506||$69.3M||AVR Realty Co.||Carey Watermark Investors|
|4||Hall South Beach||1500 Collins Avenue||Miami-Dade||72,554||$58.2M||Grup Peralada||Rockwood Capital|
|5||Fort Lauderdale Marriott Pompano Beach Resort & Spa||1200 North Ocean Boulevard||Broward||67,099||$45.15M||Pan Am Equities||Urgo Hotels JV Caylyle Group|
Source: TRD analysis of brokerage data provided by Colliers International, news clips and market reports.
An earlier version of this story incorrectly identified the annual increase in hotel sales volume.
A company tied to the principals of Miami-based TSG Group is proposing a Cambria hotel in Miami’s Overtown neighborhood.
Central District Miami Redevelopment Group V LLC, led by TSG’s Camilo Lopez and Jorge Escobar, is going before the Miami Urban Development Review Board on Wednesday seeking approvals for a 12-story, 192-key hotel at 1313, 1321, 1331 and 1335 Northwest Ninth Avenue and 851 Northwest 13th Street. The developer is seeking handful of waivers from the board, including a reduction in the required parking of up to 30 percent.
The Cambria brand is owned by Choice Hotels International, a publicly traded hospitality company based in Rockville, Maryland. Other Choice Hotels brands include WoodSpring Suites, Sleep Inn and Clarion.
The developer paid $3.15 million for the five-parcel assemblage in 2016. An affiliate of ESJ Capital Partners sold the lots to the TSG entity. Next door to the assemblage is Parkview Apartments, an eight-story, 40-unit apartment building under construction, records show.
According to the Cambria hotel proposal, the developer is planning to build a 172,729-square-foot building with 631 square feet of office space, about 7,400 square feet of open space, 105 parking spaces and bicycle parking. The hotel will also feature meeting space, a restaurant and a rooftop pool deck. Corwil Architects is designing the project.
The hotel is also across the street from a Springhill Suites by Marriott hotel, near the Health District. It’s about half a mile away from Miami Beckham United’s assemblage, where David Beckham and his partners previously planned to build their Major League Soccer stadium.
TSG, formerly The Solution Group, also owns land in the Miami Design District and along the Miami River. Escobar, a former global market head of HSBC in Chile, bought 50 percent of the company in 2016.
Bel Invest Group is also going before the Urban Development Review Board on Wednesday for Wynwood Quarter, a six-building project in Wynwood that includes a 143-unit condo building that Diesel is planning to brand. The first building is being designed by Zyscovich Architects.
“It’s an easy entry business and therefore an easy exit business,” Mike Pappas, CEO and president of The Keyes Company/Illustrated Properties told TRD, articulating an intrinsic truth about the residential brokerage business that veterans of the industry know all too well.
Brokers largely credit the industry’s characteristically high rate of turnover to the constant influx of new professionals into the field. But experienced agents, too, contribute to the high rates of comings and goings, hopscotching from one brokerage to another as they search for higher commissions or a change in culture. And a recent spate of brokerage acquisitions by larger firms may also have contributed to a higher churn, with some agents opting out when their company comes under new ownership.
“Miami, in particular, has always been very active with agent movement,” said Beth Butler, Compass’ general manager of Florida. “Agents are smart, they’re savvy, always looking for a good deal.”
To determine which firms were seeing the most gains and losses of agents, The Real Deal analyzed the rate of agent turnover at South Florida’s top 20 brokerages using a formula determined by the U.S. Department of Labor. The rate is based on the total number of agents who were with the firm in June 2017 but not in October 2018, divided by the firm’s average size over that period. The 20 firms included were determined by dollar volume of sales of homes priced at over $3 million between August 2017 and July 2018, as reported in TRD’s fall 2018 top brokerage ranking. Only brokerages with 30 agents or more were considered.
The results of the analysis show a wide range of turnover figures, from as high as 39 percent to less than 3 percent. But a high rate isn’t necessarily bad and a low rate isn’t necessarily good. A firm’s turnover rate largely depends on its overall philosophy. Some, such as The Keyes Company/Illustrated Properties, prioritize efforts to increase agent rosters, believing that the business’ success largely depends on recruiting new agents as a key to boosting sales volume and revenue.
“There is a direct correlation between the number of associates and market share,” said Pappas. His company ranks as the largest brokerage in South Florida, with nearly 3,000 agents, according to TRD’s analysis.
Others disagree with that approach, believing that the sheer number of agents does not guarantee sales. With a turnover rate of 24.7 percent, Douglas Elliman is less growth-focused, according to Jay Parker, CEO of the Florida brokerage.
“Our focus at Douglas Elliman is not based on growth for growth’s sake,” Parker said, adding that he has no target figure for the number of agents the firm wants to have in South Florida.
As Miami’s resi market enjoys a bump — with the number of third-quarter sales up 11.1 percent from the same time in 2017, according to a recent Douglas Elliman market report — amid a buyer’s market, brokerage leaders discuss what makes their agents stay put and how acquisitions have impacted the rates of resignations, hirings and firings.
The bulk of turnover at resi agencies revolves around those who get into the field and then get out of it just as quickly, most brokerage leaders concurred.
From January 2017 through November of this year, more than 52,000 new professionals got licenses to sell real estate in Florida, according to the Florida Department of Business and Professional Regulation. A total of 272,578 agents held active licenses statewide at the end of fiscal 2017, the department’s most recent figures show.
“There are always people transitioning in and out of our industry,” Ron Shuffield, president and CEO of EWM Realty International said. “They are independent contractors and 100 percent commission, and some people like that and excel at that, and others find it is not exactly what they thought.”
It’s easy to see why the field lures so many newbies every year. Brokerages in South Florida generally offer an 80/20 commission split between the agent and the firm, sources say. That can sometimes rise to 85 or 90 percent or more, depending on an agent’s sales.
Some brokerages, including United Realty Group, offer 100 percent commission and require only a $299 transaction fee per sale. That may explain why the firm added 833 new agents, the most of any brokerage, during the period TRD analyzed. United Realty Group did not respond to requests for comment.
But while commissions may be high in some places, many agents fail to close enough deals to make the career worthwhile, which leads to high turnover in the industry, experts said. According to the National Association of Realtors, among 1.3 million associates nationwide, 8 percent of Realtors did not make any sales last year, and another 19 percent only made between one and five sales.
A franchise of Keller Williams, The Tello Group, had the highest turnover of the firms analyzed, with a rate of 38.8 percent. Natascha Tello said the number largely reflects the industry norm of at least 30 percent attrition each year, which she said may be even higher in Florida. However, the TRD analysis found that only three other brokerages in the top 20 had a rate of 30 percent or more.
“Florida in general is a transient state — a lot of people come and go,” plus entry into the real estate profession is easily attainable, she said.
It’s those who have been in the industry for years who largely remain loyal to a firm, Pappas said. Overall, his firm’s top 10 associates average a tenure of 14 years, and the top 100 associates average more than 10 years with Keyes, he said.
The post-acquisition scramble
A number of acquisitions of smaller firms by bigger entities have effectively made many agents change firms at the very least in name only. Keyes, Compass and One Sotheby’s are among the firms that have made significant acquisitions in recent years, but most of the acquiring brokerages assert that the mergers haven’t made their brokers flee. Only a few of the smaller acquisitions occurred during the period studied in the TRD analysis.
Pappas said of 550 agents who joined Keyes as part of its 2016 merger with Illustrated Properties, only five have left.
Compass, which had a 14.5 percent turnover rate during the period TRD analyzed, is known to be aggressive in acquiring boutique brokerages, as well as in its recruiting efforts. In the past two years, the firm has acquired four local brokerages, which added a total of 120 agents to its roster. Butler said that all but five of the 29 agents who left during that time frame were either asked to leave due to low productivity or because they failed to pay dues or left the business.
But sometimes amid an acquisition, agents opt to leave rather than join the new, larger brokerage, brokers said.
“There is no guarantee that [brokers from the firm being acquired] are coming over,” said Phil Gutman, president of Brown Harris Stevens Miami, which had a 15 percent turnover rate over the period analyzed. “You have to have a meeting to sell them on why they should come over with you.”
At TRD’s Miami Showcase & Forum in October, Compass CEO Robert Reffkin characterized his approach to recruitment by saying he’s like a “door knocker agent” who is “happy to pitch myself 10 times.”
Rather than hire agents who are new to the industry, Compass focuses on those with experience. The firm’s local “growth team” reaches out to connect with agents at other firms and also handles inbound inquiries.
“When we started, we did a lot more outreach,” Butler said. Now, agents reach out to Compass because they know an agent or hear about the firm’s growth, so only about 20 percent of new hires are from outreach efforts, she said.
Compass is far from the only firm looking to get the best and brightest to come over from other firms. At the Signature Real Estate Companies, based in Boca Raton, recruiting new agents is serious business.
Ben Schachter, broker and president of the firm, said it brings on 10 to 30 agents per month. About 70 percent join Signature from other brokerages, while 30 percent are new to the industry and newly licensed. The firm only extends an offer to about 48 percent of the candidates it interviews, and of those, about 87 percent join the firm, he said.
“We look for people who have a tremendously raging fire to be successful,” Schachter said.
Signature, which was formed 12-and-a-half years ago and now has nearly 800 agents, has a professional recruiter on staff who pursues agents on a target list based on tenure, volume of sales and geographic location. Yet most agents come as referrals from other agents, who earn 5 percent of the gross production the new agent brings in for the first 12 months, Schachter said.
Separating the wheat from the chaff
Of course, there are also instances where brokers aren’t cutting the mustard and must be shown the door. Douglas Elliman may also terminate agents if they do not meet the firm’s $3 million production standard each year, although there are exceptions, Parker said.
“We don’t want dead weight on our roster. For us, it’s not now many agents do we have, it’s how much business are we producing,” he said.
At Signature, agent performance is assessed every 90 days, including how many listings agents have generated and their professional development in terms of additional training and education.
“I fire as much as 20 percent of our workforce every single year because they are not producing,” Schachter said. During the time period TRD analyzed, Signature had a turnover of about 24 percent, and Schachter figures that of 170 agents who left, probably 100 to 125 were terminated during that time frame.
“If you want to hang your license and be left alone, we are not for you,” said Schachter.
And there are plenty of simpler reasons for departures: Some seasoned agents decide they don’t want the full-time job, or choose to relocate yet want to retain their licenses. Firms such as Douglas Elliman allow them to move into a separate but affiliated business as referral agents.
“We allow them to hold a license but they don’t have to pay insurance or dues,” said Parker. “They’re not actively selling real estate, but they can earn a referral fee, so we transfer them to our referral network.”
Parker estimates that about 60 agents transferred to that network during the 16-month period TRD analyzed, contributing to the firm’s 24.7 percent turnover rate during that time. In the analysis, brokers who transferred to a referral network counted as departures.
Regardless of industry hiring and firing practices, experts in the field expect the high degree of turnover to continue. At Compass, with offices stretching beyond South Florida to the west coast of Florida, Jacksonville and Orlando, Butler figures the firm will have at least 1,000 agents in the state by the end of 2019. Most of that growth will likely be through hiring individual agents and teams rather than acquiring brokerages, she said.
“All these new firms are certainly going to shake things up, and it’s already a market where people move very consistently,” Butler said. “It should continue to be an active recruiting environment.”