Vector CEO Howard Lorber (Credit: Getty Images)
Despite an uptick in revenue, Douglas Elliman’s losses widened 28 percent during the first quarter, thanks to New York’s “challenging” sales climate, parent company Vector Group said Tuesday.
The brokerage — the largest in New York City — lost $10.4 million in the quarter, compared to an $8.1 million loss during the same period last year, Vector reported. The firm pulled in $161.9 million in first-quarter revenue, up 1.5 percent from $159.4 million in 2018.
“The New York real estate market has been challenging thus far in ’19,” said CEO Howard Lorber during an earnings call with investors. CFO J. Bryant Kirkland said despite increased revenue during the quarter, slower sales in New York dragged down profitability, as did ongoing expenses related to Elliman’s acquisition of Teles in California in 2017.
In addition to Teles, Elliman has acquired firms in Aspen, South Florida and Boston in the past few years as it has expanded in those markets. During the call, Lorber signaled that Elliman and Vector are on the hunt for additional acquisitions.
“The real estate market is cyclical,” he said. “Vector’s strong liquidity will allow us to invest in opportunistic acquisitions.”
Overall, Vector’s first-quarter revenues dropped slightly to $420.9 million, compared to $429 million last year. Net income during the quarter was $15 million, more than double the $7.2 million over the same period last year.
Vector’s New Valley segment — which has invested in condo projects like 125 Greenwich Street and 76 Eleventh Avenue — pulled in just $2.9 million in income from the sale of condos at 215 Chrystie Street. Lorber said New Valley is expecting additional income from the sale of condos in about six months.
“We’ve taken write-downs on a couple of investments, but all in all, the rest of the portfolio looks good,” he said. He said for a while the market has been down 15 percent — a reality that sellers refused to acknowledge. “They’re finally starting to realize that their pricing is too high and in order to have sales they have to drop their pricing.”
Last week, Realogy — the parent company for Elliman’s rival the Corcoran Group — lost $99 million, a 48 percent year-over-year decline. The company’s revenue slid 9 percent to $1.1 billion.