Manhattan firms upbeat about Cendant split.

Manhattan's Cendant-owned firms this week followed the party line on plans to split the vast conglomerate into four separate companies.

"This is very positive news," said Corcoran CEO Pare Liebman, of the announcement that Cendant's board of directors had agreed to separate the company into four independent, publicly traded entities focusing on real estate, travel distribution, hospitality and vehicle rental.

Corcoran is among the family of companies that make up NRT, the residential real estate arm of Cendant. It also includes Century 21, Coldwell Banker, ERA, Sotheby's International Realty and The Sunshine Group.

The same statement was issued by both Corcoran and Sotheby's:

"Being part of a major organization that focuses purely on real estate will strengthen our ability to serve our clients, who can expect to continue to work with the same company representative as they do today," said the statement.

"This new company at its inception begins with a financially strong balance sheet and the same leading national position that we have always enjoyed--a real estate powerhouse without a true peer in the real estate services sector."

NRT Incorporated is the largest residential real estate brokerage company in the United States and also has locations in the United Kingdom. With more than 1,000 offices and 62,000 sales associates operating in over 35 major metropolitan areas, NRT posted a real estate industry record of $204 billion in closed sales volume in 2004.

Cendant chairman and CEO, Henry R. Silverman, said the board of directors felt that unlocking the four, focused arms of the company was the best way to unlock the full value of all of Cendant's businesses for the benefit of shareholders.

"We believe that this is the right thing to do, for the right reasons and at the right time," said Silverman.

"All of our businesses have done well, yet despite Cendant's consistently strong operating and financial performance in recent years, the market has not fully recognized the value of the company.

"We have now concluded that it is in the best interests of our shareholders to establish pure-play enterprises, as we and our advisors believe the sum of the parts has a value in excess of our current share price."

Despite the firm's positive line and upbeat forecasts from market analysts, Cendant's share value took at hit following the news, falling nearly five percent upon news of the split and the company itself cut earnings forecasts.

David Michonski, CEO Coldwell Banker Hunt & Kennedy--an independently owned and operated firm which is not part of Cendant--is among the skeptics who said the move echoes those of other large conglomerates including Sears Roebuck and Prudential.

"The more things change, the more they stay the same," said Michonski.

Michonski believes the move may be a precursor to Cendant positioning itself should Washington give the go-ahead to banks becoming involved in real estate brokerage.

"Cendant is the largest real estate broker in the world. They have an asset there they might want to sell to a bank some day and, if they were to sell off their real estate division given the current structure, it would be an asset sale and could involve very large taxes. If they split it up and own stock in it, it's a long term capital gain."

The four new Cendant firms will be given new names and the Cendant name will be retired.

Richard A. Smith, the longtime head of Cendant's real estate services, will continue to run the division with Silverman serving as non-executive chairman.