The Corcoran Group, Inc. Business Information, Profile, and History

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History of The Corcoran Group, Inc.

The Corcoran Group, Inc. is the leading luxury real estate firm in New York City. It has 11 offices and is one of the three largest residential brokerages in New York City. The company sold $4.2 billion worth of real estate in 2002. It had about 600 brokers and 200 support personnel. Clients have included some of the most famous personalities to pass through New York. NRT Inc. acquired the Corcoran Group in September 2001 for a reported $70 million. Corcoran continued to operate independently of NRT's other brands (Coldwell Banker, Century 21, and ERA) due to its position in the unique and insular New York City market. High-profile founder Barbara Corcoran remained onboard as chairperson.

Origins

Barbara Corcoran was born in Edgewater, New Jersey, to a printing press manager and his wife. The second of ten children, she took her mother's practical management savvy--the kids all had to share one bathtub--as an early and enduring inspiration. Corcoran had a lackluster career in high school, due to dyslexia. She held a total of 22 jobs before landing in the real estate business.

While attending St. Thomas Aquinas College, Corcoran worked slinging hash at a New Jersey diner. In her autobiography, Corcoran credits her mother with giving her the marketing insight needed to compete with a buxom rival waitress. "Put ribbons in your pigtails," she was told. This kind of marketing flair would serve Corcoran well in her new life as a real estate powerhouse. "I think the image, in our business, certainly comes first," she told CNNfn in 2003.

After working for the Giffuni Brothers real estate company for a few months, Corcoran started her own real estate business in 1973 with $1,000 borrowed from her boyfriend, Ray Simone, who received a 51 percent interest in the venture. Corcoran had met Simone, a divorced father of three, at the Fort Hood, New Jersey diner where she worked. Corcoran's first office, she told the New York Times, was a Manhattan apartment (East 86th Street) shared with two roommates. Within a couple of months she was able to lease separate office space and hire a few rental agents.

After three years, the live-in boyfriend dumped Corcoran to marry her secretary, which naturally led to an eventual split-up of the business. Corcoran was just 23 when she went solo two years later. "You will never succeed without me," said the boyfriend. "It was the biggest insult I've ever received," said Corcoran in the New York Times. "But now I realize he did me a big favor because his comment spurred me to work harder."

Corcoran's business grew rapidly during the mid-1970s as apartment ownership displaced renting in upscale New York apartments. The company's approach, according to its literature, was to focus on specific neighborhoods in Manhattan and Brooklyn.

Reporting Trends in 1981

The Corcoran Report, a handbook of market trends, was created in 1981. This biannual survey would become widely quoted in the statistic-hungry media and established Barbara Corcoran as a residential expert. "It was probably the single best thing I ever did," she later told Business Week Online.

Barbara Corcoran worked as a sales manager for New York developers Vincent and Tony Albanese for a year after the stock market crash of 1987 wiped out the real estate market. As the market began to slow down, Corcoran and other Manhattan brokers began informally sharing listings, while stopping short of establishing a formal Multiple Listing Service (MLS) like those found in most areas of the country.

Embracing Technology in the 1990s

The Corcoran Group handled $400 million worth of transactions in 1992. As the business and its paperwork grew, Corcoran became an early advocate of the paperless office, ceremonially burning its massive books of listings in 1984. The firm preferred to store and share floor plans and other documentation online as soon as the technology became available in the mid-1990s. Corcoran's Gallery office on the Upper West Side was a showcase of interactive real estate merchandising. Corcoran acquired rental company Town Properties, Inc. in the spring of 1995. Town Properties, which had just seven employees before the buy, was renamed Corcoran Group Rentals Inc. and its staff increased to 40.

The company launched a web site, corcoran.com, in 1995. Sales of the unit reached $85 million in 1998, producing a profit of $1.5 million. (Corcoran's total transactions amounted to about $2 billion a year.) By 2000, corcoran.com had listings from independent affiliates in 128 cities in 45 countries. Though the site was reckoned to have generated at least a deal a day, it ultimately failed to live up to expectations. After a short-lived spinoff in January 2000, the online unit was quietly reincorporated into the Corcoran Group.

The Internet also allowed some of Corcoran's brokers--one-fourth of them in 1996--to work from home. This saved between $25,000 and $45,000 in office expense per agent per year in the pricey Manhattan area. Corcoran expanded into a neighboring borough by acquiring a half-interest in Brooklyn Landmark Realty Inc. in April 1998. A couple of years later, it opened an office in Harlem, following a hot market.

Towards the end of 1999, Barbara Corcoran joined Pamela Liebman, president of Corcoran Group Marketing, in acquiring a 3 percent equity stake in a new 12-story, 37-unit condominium development in Chelsea. Corcoran Group was the sole agent for the property. Liebman was named Corcoran Group chief executive in the summer of 2000. She had joined the company in 1986.

December 1999 was a big month. A new corporate identity scheme was introduced, and the company leased new office space in an 1857-vintage building at 490 Broadway. In the same month, Corcoran created a healthcare property division led by former Douglas Elliman agent Paul Wexler.

Corcoran joined two other Manhattan brokers, Douglas Elliman and the Halstead Property Company, in July 2000 in creating a new Internet service sharing all their listings. Manhattan had until that time lacked any kind of shared listing service, and a Corcoran executive described the move as preemptive. Insignia Financial Group had acquired Elliman for $65 million in 1999. The next year, Barbara Corcoran received three simultaneous offers to buy her company, she told the New York Observer. In 2001, National Realty Trust Inc. (later named NRT Inc.), which had been trying to enter the New York market for several years, acquired the Corcoran Group in a deal reported to be worth $70 million.

Motherhood was part of what ultimately motivated Barbara Corcoran to sell, reported Inc. She had given birth to a son, Thomas, in 1994 at the age of 45. (Corcoran had married Bill Higgins in 1989.) She also told the press that a national affiliation was important to the firm's growth.

Part of NRT in 2001

NRT Inc., a subsidiary of Cendant Corporation, also owned the Coldwell Banker, Century 21, and ERA real estate agencies, and usually merged its acquisitions into one of these brands via its 22 operating companies. (NRT had made 200 acquisitions since it was formed in 1997.) However, the Corcoran Group would remain independent, due to its special place in the unique and insular New York market, where it was the second largest independent residential real estate company. It would, in fact, be used to acquire other New York firms.

Corcoran remained with the group as chairwoman. There was some speculation as to the longevity of the unique perks to which she treated her brokers, such as free weekly massages and a well-stocked pantry. Top performers got multiple assistants and private cars. The deal was finalized shortly after the September 11 terrorist attacks which shook the New York economy. The number of Manhattan apartments for sale, and particularly, those for rent, spiked dramatically after the catastrophe, reported the International Herald Tribune.

The Corcoran Group was already in the midst of expansion when it was acquired by NRT. It was adding another 4,500 square feet to its 24,000 square feet of office space at its Manhattan headquarters, and was hiring scores of new brokers and opening new offices in its steadily growing territory around New York City. The collapse of the Internet bubble had made real estate more attractive to investors. Low mortgage rates and a shortage of supply buoyed hopes of a rising residential market. By the spring of 2002, the price of a Manhattan coop had reached a short-lived peak of more than $1 million. The Corcoran Group sold $4.2 billion worth of property in 2002. The next year, founder Barbara Corcoran published a book, Use What You've Got (And Other Business Lessons I Learned from My Mom), which ascribed her success to her mother's practical wisdom.

Principal Divisions: Corcoran Wexler Healthcare Properties; Development Division; Group Marketing; Relocation Service.

Principal Competitors: Brown Harris Stevens; Insignia Douglas Elliman, LLC.

Chronology

• Key Dates:
• 1973: Barbara Corcoran launches real estate business with a $1,000 loan.
• 1978: Corcoran sets out again after splitting with partner.
• 1981: The Corcoran Report begins covering New York City real estate trends.
• 1995: Corcoran.com is launched; rental unit is acquired.
• 1998: Brooklyn Landmark Realty is acquired.
• 2000: Corcoran opens Harlem office, shares listings with two other New York City brokers.
• 2001: NRT Inc. buys Corcoran for a reported $70 million.
• 2003: Barbara Corcoran publishes Use What You've Got (And Other Business Lessons I Learned from My Mom).