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Douglas Elliman Inc. reported income of $266.3 million and a web lack of $27.2 million throughout a third-quarter earnings name with traders on Thursday to cap off 1 / 4 wherein the brokerage enacted sweeping management adjustments amidst elevated stress from its board.
Income through the third quarter of 2024 was $266.3 million, up from $251.5 million the earlier 12 months. Income throughout Q2 2024 was $285.8 million.
The corporate noticed a web lack of $27.2 million or $0.33 per diluted frequent share, up from $4.9 million throughout Q3 2023. In the course of the second quarter of 2024, its web loss was simply $1.7 million. Douglas Elliman attributed this partly to a $20.2 million no-cash cost for adjustments in honest worth of derivatives embedded inside convertible debt, which was associated to a $50 million progress funding that Kennedy Lewis made into the agency in July, and which accounting requirements required the corporate to transform into debt.
“I’m honored to have been named chairman and CEO of Douglas Elliman” Michael Liebowitz, the corporate’s chairman and chief government officer, mentioned throughout an investor name Thursday morning, including that he was excited for “a new era.”
“We’re expanding our company culture of connectivity and entrepreneurialism and executing a clear plan to grow and diversify the business to deliver long-term value to all stakeholders,” Liebowitz added in a press release. “As part of this, we’ve created a strategic M&A and business development unit to explore complementary acquisitions in ancillary businesses — such as title, escrow, staging, insurance brokerage and property management — while remaining opportunistic in our core brokerage business. In fact, we’re already in discussions to expand our property management business into Florida. We’re also analyzing all investments to ensure they hit our ROI targets. By doing this, we will build Douglas Elliman into a profitable growth engine for the benefit of our stockholders, agents, staff and clients.”
Liebowitz’s assertion about diversification and searching for further income streams addressed nervousness that some traders had skilled in recent times, as the corporate noticed a string of losses.
“Our brand, in my view, is one of the most recognizable in luxury real estate,” he added.
Bryant Kirkland, the corporate’s chief monetary officer, mentioned in a press release that the corporate had “delivered strong revenue growth this quarter and year-to-date.”
“We continue to lead the industry in reported average sales price per transaction, reflecting the strength of our luxury markets, our best-in-class agents, and the gradual stabilization of home purchasing activity,” Kirkland continued. “With fresh perspectives, a strong balance sheet and an entrepreneurial spirit, we are positioning Douglas Elliman for long-term success as the real estate market recovers.”
In the course of the three months ending Sept. 30, 2024, Douglas Elliman Realty closed gross transaction worth of roughly $9.8 billion, up from $9.3 billion the earlier 12 months.
The corporate’s money and money equivalents have been $151.4 million as of Sept. 30, 2024.
“The best days at Douglas Elliman are truly ahead of us,” Liebowitz added.
In the course of the firm’s earnings name, Liebowitz famous that with Donald Trump about to take a second time period within the White Home come January, that they anticipate an enchancment available in the market subsequent 12 months, and certain decrease rates of interest.
“You’ve got a real estate guy in the White House … which spurs activity,” Liebowitz mentioned.
He additionally added that whereas the corporate has hopes to drive agent progress within the coming 12 months, they plant to “be smart and disciplined” about recruitment, and never merely bolster agent headcount for the sake of getting increased numbers.
“When we look at the agents that we have, they’re some of the top agents,” Liebowitz famous.
Lower than two weeks earlier than the earnings name, Douglas Elliman had terminated former brokerage President and CEO Scott Durkin, in accordance with a submitting with the Securities and Alternate Fee (SEC). The information of Durkin’s firing got here simply days after former Elliman chairman of the board, CEO and president Howard Lorber instantly introduced his retirement.
Richard Ferrari, who had headed brokerage operations in New York Metropolis and the Northeast stepped into Durkin’s outdated place, and Douglas Elliman’s board director, Michael Liebowitz, took up Lorber’s function.
Though Lorber’s departure had been characterised by Elliman as a retirement, The Wall Road Journal reported that Lorber had in reality been pressured by the corporate’s board to resign as issues about office tradition mounted. In latest months, some vocal Elliman shareholders had expressed their discontent with Lorber’s efficiency, because the agency confronted about two years of economic losses and a dropping inventory value, in addition to elevated scrutiny over beforehand long-time brokers Tal and Oren Alexander, who over the summer season had been named in a number of lawsuits alleging sexual assault.
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