BHS marks 125th year under bright new leadership.
But since its acquisition in 1995 by the dynamic partnership comprised of Kent M. Swig, William Lie and Arthur W. Zeckendorf, and David A. Burris, BHS has experienced record-breaking sales and dramatic growth, and has again regained and solidified its stature as one of the country's premiere real estate firms.
Upon taking ownership, Swig, Burris, and the Zeckendorfs began to implement immediate changes throughout the company, restructuring and expanding all of the firm's divisions and adding several new service lines. The firm also struck an affiliation with Christie's Great Estates to be their exclusive Manhattan affiliate; has expanded into three states through the acquisitions of additional companies; and has grown to include over 350 professional brokers.
BHS remains one of the only full-service companies serving both the residential and commercial markets in New York City, and has also increased its combined commercial and residential management to more than 175 buildings,.with a market value of over $6 billion, including some of Manhattan's most distinguished addresses. Revenues have grown by more than 100 percent, and sales for 1996 and then again in 1997, exceeded sales of any year in the firm's venerable 125-year history.
Upon taking ownership of Brown Harris Stevens (BHS), Swig, Burris, and the Zeckendorfs consolidated their extensive real estate backgrounds into a highly focussed, professional property service and selling force, and began to implement immediate changes throughout the company.
They restructured all of the firm's divisions, and added several new service lines including appraisals, insurance, construction management, residential rentals and corporate relocation. The firm also struck an affiliation with Christie's Great Estates to be their exclusive Manhattan affiliate, giving BHS access to 145 Christie's affiliates nationwide and offices in 37 countries. The product of these changes was immediately evident.
Committed to growing BHS and recognizing that the future success of real estate depends heavily on technological advancement, the new owners have installed one of the real estate industry's most sophisticated accounting software systems and insurance certificate tracking systems; a central purchasing department to take advantage of negotiating bulk rate discounts for all purchases made in the management portfolio (which has yielded savings between 20 and 450 percent per item); and have invested over $1 million to date to install the most advanced technology - specifically its proprietary computer listing system called RealPlus. This system allows its brokers to key in more than 300 different residential property features requested by their clients, find all the available matches in under a minute, and fax or e-mail the results to the customer. This information also includes property photos, floorplans, and the availability for clients to view a computer video 3-D walk-through of any apartment or home.
The ownership team has also made strong efforts to expand their commercial division, which in 1995 had only two brokers, and now comprises more than 30 brokers located in Manhattan and Long Island. Further illustrating ownership's ability to transform what they touch into success, is their flagship 770 Lexington Avenue building. At the time of purchase by an investment group led by Swig and Burris in July 1995, the building was only 45 percent occupied. Within only eight months, Swig and Burris increased the annual income of the building by 102 percent, and with bulk buying and reworking the operation, expenses went down by 31 percent. The building is now 100 percent leased.
The principals have also played a collective role as owners/developers for other prominent Manhattan projects and buildings, such as the development of 515 Park Avenue, a new 43-story super luxury condominium at Park and 60th Street; 48 Wall Street, a 310,000 square-foot commercial building being converted into luxury residential apartments; and 401 East 89th Street, a 198-unit residential building that was purchased out of bankruptcy.
Additionally, Swig is developing a new 51-story, 625,000 square-foot building in downtown San Francisco that will contain 509 apartments and will be the largest residential building west of Chicago.
Looking to expand their reach and brand name on a national basis, the principals of BHS have recently formed a joint venture with NorthStar Capital Investment Corp., forming SBZZ NorthStar Holdings, with the goal of acquiring residential brokerage firms that deal in the luxury segment of the marketplace throughout the United States. Their aggressive expansion plan was immediately put into practice with the acquisition of three key real estate companies in New York, Palm Beach and Orlando within a six-month period. These acquisitions included Feathered Nest, Manhattan's largest residential rental firm at 80 brokers, thus solidifying Brown Harris Stevens domination of Manhattan's residential market place; William Hutton Associates in Palm Beach, Florida; and The Real Estate Center of Winter Park, Florida, respectively. Two additional firms are under contract and will be purchased in the near future.
"Affiliate networks are the wave of the future, and these transactions ensure that BHS will have a major role to play in the evolution and future of the residential real estate services industry throughout the country," said BHS Principals Kent M. Swig and Arthur W. Zeckendorf. Firms acquired by the joint venture entity may operate under a license agreement with Brown Harris Stevens, and will either use the Brown Harris Stevens name or retain their own names and be described as affiliates of Brown Harris Stevens.
In addition, Swig, Burris and the Zeckendorfs have expanded BHS' East Side brokerage office to over 90 brokers from the 58 brokers that were present when they purchased the firm in 1995, and have opened two new Manhattan offices, one on the West Side at 2112 Broadway and one Downtown at Two Fifth Avenue, bringing the total number of residential brokers to over 140. BHS sold more than $750 million of apartments in 1997.
The Commercial Services Division has added three additional offices, two located on Long Island: one in Garden City in Nassau County and one in Commack in Suffolk County; and the third in San Francisco that operates under the name of BHS Whittney Cressman, which is a joint venture between Brown Harris Stevens of New York and Whitney Cressman of San Francisco.
NorthStar Capital Investment Corp. was established to continue the opportunistic real estate-related investment activities of David T. Hamamoto, formerly co-head and a partner at Whitehall Funds at Goldman, Sachs & Co., and W. Edward Scheetz, formerly a partner at Apollo Real Estate Advisors. Since its capitalization in December 1997, NorthStar Capital Investment Corp. has committed an excess of $1 billion in more than 25 transactions.
The fiercely competitive world of real estate demands constant change, and foreseeing and adapting to those demands can mean the difference between success and failure. As is apparent, during the past three years, Brown Harris Stevens has witnessed substantial changes in all aspects of its residential and commercial practices, and it is these innovative changes which have directly contributed to the company's tremendous success.
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|Title Annotation:||real estate firm Brown Harris Stevens|
|Publication:||Real Estate Weekly|
|Date:||Oct 21, 1998|
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