New York’s Douglas Elliman Brokerage to Spin Off as Public Firm
(Bloomberg) -- Douglas Elliman Real Estate, one of the New York region’s largest residential brokerages, is seeking to become a publicly traded company.
Its parent, Vector Group, will file paperwork Tuesday with the Securities and Exchange Commission to spin off the brokerage as a standalone company, Vector Chief Executive Officer Howard M. Lorber said. If approved, the shares would trade on the New York Stock Exchange under the ticker DOUG.
The spinoff -- at a time when home-sale revenues are soaring -- would free Elliman from Vector’s cigarette business, clearing a path for socially conscious investors who want access to real estate opportunities.
“Tobacco has good, consistent cash flow, but there are still certain funds and institutions that won’t invest in it,” Lorber said in an interview. “This opens up the capital markets directly for our real estate business.”
Having access to capital markets will help with strategic growth, giving Elliman leverage to offer stock options as a way of attracting employees, and acquiring other brokerages in cities where it wants to expand.
“It will be easier to put a deal together,” said Lorber, who will be CEO and chairman of the new public company, Douglas Elliman Inc.
The brokerage has sights on expanding in markets including San Francisco, Chicago, Scottsdale, Arizona, and both coasts of Florida, said Scott Durkin, CEO of Douglas Elliman Real Estate. Durkin will be CEO of the new company’s brokerage entity, to be known as Douglas Elliman Realty.
Douglas Elliman Inc. would comprise the brokerage and all the ancillary -- and revenue-generating -- real estate services that feed it, such as mortgage lending and home staging, according to Durkin. The company also will seek to invest in technology that assists homebuyers and owners, he said.
“Real estate is now the most talked-about piece and part of everyone’s life post-pandemic,” Durkin said. “We can rise on our own, and I believe our value is much greater than when under the umbrella of a parent company.”
Elliman’s biggest presence is in the New York metropolitan area, with listings across the city, Long Island, Westchester County, Connecticut and the Hamptons. It’s the sixth-largest brokerage in the U.S.
Completion of the spinoff is subject to approval by Vector Group’s board. The shares could be trading by the end of the year, Lorber said.
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