Douglas Elliman Realty saw its revenue continue to grow in the first quarter of 2022, the company reported on Tuesday in its first earnings report of the year.
The brokerage saw its revenues increase 13.2 percent compared to the same quarter last year, to $308.9 million, in a surge of growth spurred mainly by the luxury market, according to the company.
“Douglas Elliman’s strong momentum continued in the first quarter of 2022,” Howard Lorber, chairman and CEO of Douglas Elliman said in a statement. “We are extremely proud of the success we are achieving and we believe we are well-positioned to capitalize on opportunities in the U.S. residential real estate market to continue driving value for all stakeholders.”
The company reported a consolidated operating income of $7.9 million, and a net income of $6.5 million, or $0.8 per diluted share, compared to a net income of $14 million or $0.18 per diluted share the year earlier.
Its adjusted EBITDA was at $12.7 million compared to $16.4 million the year prior, reflecting stand-alone public company expenses following the company’s debut on the New York Stock Exchange as DOUG after spinning off from its parent company Vector Group, the brokerage said in a statement.
The real estate company made the move to trade as an independent entity because its parent group also owns the tobacco company Liggett Group, which some investors were reluctant to back due to the harm caused by cigarettes.
Through its brokerages, Douglas Elliman recorded a gross transaction volume of approximately $11.7 billion, compared to $10.1 billion during the first quarter of 2021. Over the 12-month period ending March 31, its brokerages achieved $52.8 billion in gross transaction volume, the company said.
Its average price per transaction was at $1.62 million far higher than the industry average due to its concentration on luxury and in expensive markets like New York City.
The company maintained a balance sheet of $203.7 million of cash and cash equivalents as of March 31, it said.
During a conference call with investors on Tuesday, Lorber said the company had continued to benefit from the low-supply high-demand housing market.
“We saw an ongoing trend of strong demand for residential homes combined with low inventory which continues to result in significant price appreciation, particularly across our luxury markets,” he said. “These dynamics have propelled an increase in our revenues.”
Lorber said the company was yet to be adversely affected by rising mortgage rates, thanks to its focus on the luxury market.
“Our business has not been affected by higher mortgage rates and we believe this is the result of our focus on our luxury markets where a higher percentage of transactions occur in cash,” he said.
Lorber said the company felt confident that buyers would remain in the market even as rates rose for fear of getting locked out by even higher rates in the future.
“What I’ve seen in the past over the years is that as rates start going up, that brings people into the market quicker because they don’t want to be priced out of the market,” he said. “People need and want housing and therefore they’re going to do everything possible to do it as quick as possible, because the way it looks now with inflation and supply problems to build new houses and rising interest rates, there’s no better time probably than right now.”