Corcoran Group to buy Citi Habitats

[krulltime]

Corcoran Group to buy Citi Habitats


by Jeanhee Kim
June 22, 2004

Corcoran Group agreed to buy Citi Habitats, the largest residential rental brokerage in New York City, Corcoran said in a statement on Tuesday.

In the deal, whose terms were not disclosed, Corcoran also acquires Citi Habitats' affiliated companies, such as SoLOFTS, a loft and fine home sales unit. This makes Corcoran the largest residential real estate brokerage in the city, with $6.55 billion of combined 2003 sales from all its divisions, compared to sales of $6.48 billion for rival Prudential Douglas Elliman Real Estate, said Pamela Liebman, president and chief executive officer for the Corcoran Group. Corcoran has acquired four real estate brokerages within the last year, including two in the Hamptons and one in Palm Beach, Florida.

"Overnight we have become the largest full-service real estate company in New York," said Ms. Liebman. "With this acquisition we can start building lifelong relationships with our customers."

In 2003, Citi Habitats completed over 11,000 rental transactions, with combined sales and rental volume of more than $900 million. Its 17 offices in Manhattan will now operate under the name "Citi Habitats, a Division of the Corcoran Group." SoLOFTS' three offices in Manhattan and Brooklyn will be renamed The Corcoran Group. The newly expanded Corcoran Group will now have 2,100 sales associates and employees in 29 New York City offices, 13 Long Island and Shelter Island offices, and one office in Palm Beach.

Ms. Liebman will continue to oversee all company operations in New York City, the Hamptons and Palm Beach. Andrew Heiberger, president, founder and CEO of Citi Habitats, will continue as president of the Citi Habitats division of the Corcoran Group.

In September 2001, the Corcoran Group itself was acquired by NRT, the residential real estate division of the Cendant Group, a New York-based conglomerate. The deal was reportedly worth $70 million.


Copyright 2004, Crain Communications, Inc

[krulltime]

Corcoran Buys Citi Habitats

June 22, 2004


Andrew Heiberger and Pam Liebman join forces

In a merger of two giants, The Corcoran Group announced today that it is buying Citi Habitats.

Citi Habitats’ 17 offices in Manhattan will now operate as Citi Habitats, a Division of The Corcoran Group.

Corcoran also acquired SóLOFTS, Citi Habitats’ affiliated loft and fine home sales unit, which has two offices in Manhattan and one office in Brooklyn and will do business as The Corcoran Group.

Pamela Liebman, president and chief executive officer for The Corcoran Group, will continue in her role overseeing all company operations in New York City, the Hamptons and Palm Beach.

Andrew Heiberger, president, founder and CEO of Citi Habitats, will continue as president of Citi Habitats, a Division of The Corcoran Group.

"The Corcoran Group is committed to building lifelong relationships with our clients. With this acquisition, we can start building those relationships from the moment a client begins his or her life in New York," said Liebman

"As their housing needs mature so will our relationship, whether they are renting their first apartment, buying their first New York City co-op, a secondary home in Palm Beach or a summer house in the Hamptons," Liebman said.

"After 10 years of growing this company from two agents to more than 800 licensed professionals and staff, I consider this union with The Corcoran Group to be our best growth initiative yet," said Heiberger. "We are instantly gaining exposure in two new markets for us -- the Hamptons and Palm Beach."

In 2003, Citi Habitats’ agents completed over 11,000 rental transactions, with a combined sales and rental closed volume of more than $900 million, Corcoran said. Citi Habitats operates 20 rental and sales offices, including three offices as SóLOFTS and more than 15 on-site offices in residential projects in the New York metropolitan area.

With the announcement, The Corcoran Group now has more than 2,100 sales associates and employees operating in 29 offices in New York City, 13 offices in the Hamptons, Shelter Island and the North Fork on Long Island, N.Y., and one office in Palm Beach, Fla. In 2003, the combined organization accounted for $6.5 billion in total closed volume, the company said.


Copyright 2003-2004 The Real Deal.

[Kris]

June 23, 2004

Corcoran Buys Largest Broker for Rentals in Manhattan

By DENNIS HEVESI

The Corcoran Group, one of the city's largest residential real estate sales firms, announced yesterday that it had purchased Citi Habitats, Manhattan's largest apartment rental company.

In announcing the deal, the leaders of the companies would not disclose the acquisition price.

"The acquisition of Citi Habitats is a perfect fit for us," said Pamela Liebman, the chief executive of the Corcoran Group. "We've always been thought of as a leading sales company in New York, but we've never had a strong rental presence.

"We can now help somebody right when they get out of college to find a rental," Ms. Liebman continued. "When they get married, we'll sell them a one-bedroom; after the kids come, a big family apartment. And when they get older, we'll help them winter in Palm Beach."

In assessing the sale, Henry Wollman, director of the Steven L. Newman Real Estate Institute at Baruch College, agreed that Citi Habitats "appeals to a younger crowd, not so much families, and it seems Corcoran sees the need to establish itself in that market."

Andrew Heiberger, who founded Citi Habitats a decade ago, will remain president of the division. "I really believe there's great synergy between the two firms, very little overlap," he said.

The Corcoran Group is a subsidiary of NRT Incorporated, a national real estate company owned by the Cendant Corporation, a publicly traded company on the New York Stock Exchange.

"I'm very excited about the NRT business model," Mr. Heiberger said, "because they purchase the No. 1's in various markets and allow them to remain intact and function as they did before."

Corcoran was bought by Cendant in September 2001 from its founder, Barbara Corcoran, for $70 million. Ms. Corcoran, who started the company from the kitchen of her East Side apartment in 1973, did not return calls to her office or cellphone.

Ms. Liebman said that three years ago, Corcoran brokered $2.2 billion in sales. "We have since grown to $5.2 billion, just in Manhattan," she said.

Mr. Heiberger said Citi Habitats did more than $1 billion in business in 2003.

The addition of Citi Habitats' 800 agents and 20 offices in Manhattan will bring the Corcoran Group to 1,700 agents in 43 offices, including its locations in the Hamptons and Palm Beach, Fla.

Copyright 2004 The New York Times Company

[krulltime]

Corcoran and Citi Habitats: How the Deal Happened


June 24, 2004

The merger that brought together Corcoran, one of the two largest residential real estate companies in Manhattan, and Citi Habitats, the largest rental company, had been a few months in the works.

Corcoran CEO Pam Liebman explained the genesis of the deal during a conference call yesterday along with Citi Habitats CEO Andrew Heiberger and NRT executives.

All parties declined to provide a sales price for the deal.

"This all started a couple of months ago, when Andrew and I met for a breakfast at The Regency Hotel," said Liebman.

Heiberger said he "wasn’t shopping the company around" at the time, but had already been approached by two other major residential brokerages in Manhattan, which he declined to name.

He said he decided to merge with Corcoran because "they’ve always been the most innovative and have always taken the high road. They are clearly the most reputable."

Citi Habitats, a powerhouse in rentals, branched out into sales around three years ago. And while Heiberger said the sales division was "doing quite well," he said the merger with Corcoran "accelerates our business plan by five to seven years."

Liebman said Corcoran, which doesn’t have a formal rental division, is "not known for its rental strength," a weakness the merger will fix.

The other grand idea behind the deal is that "we are trying to create customers for life," said Liebman. Young renters, who use Citi Habitats, will be tomorrow’s buyers, and will be referred on to Corcoran when they are ready to buy, according to the companies’ strategy.

Liebman also said Corcoran is interested in growing Citi Habitats’ concierge business and moving service business.

As far as the name changes involved in the deal, Liebman said it makes sense that SoLOFTS, an affiliate of Citi Habitats, will now do business as The Corcoran Group because it is primarily involved in sales.

Citi Habitats will keep its name. "Citi Habitats is the largest rental brand in the city and it would have been silly to do away with the name," Liebman said.

The respective websites of the two companies will be linked, but the specifics haven’t been worked out yet.

Managers from both companies haven’t met up yet because of the secrecy surrounding the deal, Heiberger said, but how the sites will mesh "will be figured out in short order."

The merger, which will bring together more than 1,300 agents in Manhattan alone (not to mention Corcoran’s agents in the Hamptons and Palm Beach), isn’t the first time a deal between the two companies has been floated.

Heiberger told The Real Deal last July that he had approached Corcoran about working together in 1998, and that they had rejected his offer.

"I spoke with them at one point [in 1998] about doing something together possibly," Heiberger had said. "Their view was that sales are very sophisticated and they don’t want to muddy their reputation with a dirty rental. I’m not saying they said those exact words. But that was the overall gist of the meeting."

Corcoran didn’t confirm the meeting taking place at the time, but if it did happen that way, the company’s sentiments have clearly changed.


Copyright 2003-2004 The Real Deal.

[krulltime]

"I spoke with them at one point [in 1998] about doing something together possibly," Heiberger had said. "Their view was that sales are very sophisticated and they don’t want to muddy their reputation with a dirty rental. I’m not saying they said those exact words. But that was the overall gist of the meeting."

Ouch...such a reputation that is. :roll:

[TonyO]

This is pretty big news, the biggest of sales joining the biggest of rentals. It will be interesting to see how this affects broker's fees on both sides.