Jacob Sudhoff and Scott Durkin (Credit: Sudhoff Companies, Emily Assiran, iStock)
Douglas Elliman is launching in Texas.
The brokerage announced Tuesday a joint venture with Sudhoff Companies, a real estate marketing and sales company based in Houston that specializes in new development.
Elliman’s new office in Houston will be staffed by 50 brokers, said Scott Durkin, the brokerage’s president and chief operating officer. The firm plans to expand its resale division early next year — and eventually move into Dallas and Austin.
“Houston is a lot like Palm Beach, a lot like Beverly Hills, Los Angeles and parts of Long Island,” Durkin said. “The buyer is a buyer that we knew we wanted to be part of their lives, but we didn’t know the right people, yet, and now we have found the right person and company that has our DNA and speaks our language.”
The joint venture — almost a year in the making — will see Sudoff operations folded into the Elliman brand. Jacob Sudhoff, president of his namesake firm, will serve as chief executive officer of Douglas Elliman, Texas.
Durkin said part of the draw was Sudhoff’s involvement in new construction and “vertical living.”
The firm will represent approximately $500 million in current new development, including Houston’s newest luxury condominium, the Hawthorne, and command an estimated 85 percent market share in Houston’s new development market for condominiums, according to Durkin.
He said the expansion was a natural next step because Texas was a feeder market to other states, and a number of the firm’s existing clients came from Houston.
“Houston is not a market where people are leaving; it’s a market where people are coming into,” he said.
In New York, Elliman is a huge player. With 1,999 agents and $8.99 billion in closed sales, it is the biggest brokerage in the city, according to The Real Deal’s latest ranking.
Although it is a dominant force in new development, Chairman Howard Lorber acknowledged the sector’s constraints in New York City during an August 7 earnings call. Vector Group — Elliman’s parent company — is not investing in new condo projects here because Lorber said high land costs make it nearly impossible to pencil out a profit. It’s made new development plays elsewhere in recent years, including the acquisition of independent Boston-based firm Otis & Ahearn in 2017.
Generally, Elliman expands in new markets through the acquisition of firms, such as its buy of Teles in Beverly Hills. Overnight, the deal made Elliman one of the largest residential players on the West Coast.
Elliman is not the only New York firm to recently expand into Texas. In 2018, Compass rented 24,000 square feet of office space in Dallas to house its newest regional headquarters, after announcing a partnership with Dallas-based Collective Residential earlier in the year. The brokerage also has agents in Austin and Houston.