The Corcoran Group and parent NRT Inc. are feeling very at home in the Hamptons and in Palm Beach, two burgeoning real estate markets for high-end homes.
On March 16, The Corcoran Group announced its acquisition of Dayton/Halstead LLC, a real estate powerhouse in the Hamptons and neighboring communities in Long Island’s East End for nearly a century.
The Corcoran Group’s first foray into the Hamptons came in October, when it picked up the 10 offices of Easthamptons-based Cook Pony Farm Real Estate. In the same stroke, Corcoran announced the acquisition of Paulette Koch Real Estate in Palm Beach, Fla.
NRT’s February acquisition of Sotheby’s International Realty brought under the NRT umbrella 15 new offices, including three in the Hamptons area and one Palm Beach-area office that was among Sotheby’s largest producers.
The Corcoran Group now has 23 offices and more than 1,100 sales associates concentrated in Manhattan, Brooklyn, the Hamptons and outlying areas, and Palm Beach. Sotheby’s, a rival in Corcoran’s major markets, will continue to compete with Corcoran as a sister company owned by NRT.
NRT, a subsidiary of Cendant Corp., the largest U.S. residential real estate brokerage company, acquired The Corcoran Group in September 2001. The group has maintained its name and a loud voice under its parent company.
Don’t rule out further acquisitions by The Corcoran Group in its core market areas.
“We would still be interested in other companies if they were the right fit. We always have a good strong appetite,” said Pamela Liebman, president and CEO at Corcoran. Though Liebman said she can’t offer specifics on future or pending acquisition plans, she added, “Keep your eyes open.”
The Hamptons and Palm Beach areas were a perfect fit for Corcoran because a number of Manhattan-area Corcoran customers and clients also buy, sell or rent homes on the east end of Long Island or in the Palm Beach area.
“There is an extraordinary amount of people who winter in Palm Beach and summer in the Hamptons,” Liebman said. “There is a lot of back and forth.”
This synergy of these regions is no secret. One New York-based publishing company, Cottages and Gardens Publications, offers separate magazines targeting the Hamptons area and the Palm Beach area.
Corcoran has exceeded its own expectations in the Palm Beach area, Liebman said.
“There is lots of activity, not only in big homes. It is a very, very strong condominium market. There are lots of buyers, which always makes for an upswing in prices. With the second-home market so strong, it is just a natural place to want to go.”
The Hamptons area, too, is a bustling market with soaring home prices.
“Properties (sell) very quickly, as long as they’re priced reasonably,” she said. In the last month more than half the deals in which Corcoran participated sold at asking price or above asking price. This aggressive group of buyers also has an eye trained for investment opportunities, Liebman said.
Outlying areas of the Hamptons, including the areas of North Fork and Shelter Island, which previously did not enjoy the same real estate boom, are now feeling the frenzy, too. Also, vacation homes that previously were used only during the summer months are now finding much greater year-round use.
“Now people are coming out sooner and leaving later,” she said.
Terra Holdings, parent of Manhattan-based residential brokerage and management company Brown Harris Stevens, also has made a grab at the Hamptons real estate market. In January, Terra Holdings acquired Dunemere Associates, which now operates under the Brown Harris Stevens name. Dunemere had five offices and more than 100 brokers.
Brown Harris Stevens also a big player in Palm Beach.
“The potential for other Terra Holdings mergers continues to exist as the company stays focused on strengthening its presence in the luxury market on the East Coast,” the company said in a statement.
Prudential, not to be left out of this recent rush, acquired North Fork-focused Mattituck Realty.
Members of the Hamptons and North Fork Realtors Association note that the market has always been robust, with a particular surge in real estate prices in the past several years. Home prices have increased 25 percent to 50 percent in the past few years, in some cases.
“The market is as strong as it has ever been. The market is phenomenal. Record prices are being set, and there is no indication that it’s going to slow down,” Lawrence “Chip” Porter, association president, said.
Patricia Chierchie, executive officer of the association, said the North Fork has seen particular growth and development, with large chain stores swarming into the region. The association has about 465 members, and The Corcoran Group is not currently a member.
Andrew G. Barbar, president of the Realtors Association of the Palm Beaches, said the Palm Beach real estate market is fueled by economic growth, population growth and low interest rates, among other factors.
“Prices will continue to rise as long as the interest rates stay where they’re at,” he said.
Average prices have increased more than 20 percent in the past year. This rapid growth is due in part to the large number of new homes built in the past five or six years that are coming up for resale for the first time, he said. Parallel with the growth in the real estate market, the association has seen its membership expand from about 5,500 Realtors in 2001 to its present total of about 7,000 members.
Land value has inflated to the point that new homes tend not to sell for less than $400,000, Barbar said. The character of the communities in the area has changed as corporations have moved into the area, bringing new jobs and a more permanent group of residents.
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