August 16, 2006
Sold: Allan M. Schneider Associates
Allan M. Schneider Associates, Inc., one of the last of the large, locally owned real estate conglomerates on the East End, has been acquired by National Realty Trust, Inc., the country's biggest residential real estate brokerage company, in a deal announced last Thursday.
The Allan Schneider name will be phased out over the next few months as the company is absorbed into The Corcoran Group, a subsidiary of NRT. "We decided it was right and the time was right," said Peter Hallock, the president of Allan Schneider, of the deal.
Hallock, Timothy Davis and Peggy Griffin, the managing principals of Allan Schneider, will be senior managing directors in the new company.
Allan Schneider, which has 50 employees and 243 sales associates, is the biggest broker on the East End, producing $1.4 billion in sales in the last 12 months, according to information released by The Corcoran Group. It was founded in 1974 by Allan M. Schneider, who died in 1991, and is credited with being one of the creators of the high-priced, aggressive real estate market that exists on the East End today.
Some of the firm's 12 branches may not remain open. "We're going to take a look at some of the towns where we are operating multiple offices and see if there are any opportunities for consolidation," said Pamela Liebman, the president and CEO of The Corcoran Group.
But, she added, "We also don't mind operating multiple offices in certain locations because we have a very strong group of brokers in some of these towns and we actually need more than one office to comfortably house everybody."
Calling the Allan Schneider name a "strong brand" Hallock said he believed that though the name would disappear, the corporate philosophy of the new company would remain the same. "I think it's like sending your kid off to college. It's time for our brokers to graduate and go on to bigger and better things and we think the Corcoran umbrella can do that for them," he said.
Published reports suggested a sale price of $40 million, but Liebman declined to comment on the particulars of the deal. "I've yet to see anybody get the price right," she said. Negotiations began six months ago, Hallock said, but the two companies had been in contact "for a number of years just feeling each other out, making sure the fit would be right."
The Corcoran Group has 59 offices with 2500 sales associates on the East End, in New York City and in Florida. The company's 232 sales associates on the East End made $1.2 billion in sales in the last 12 months and it is the second largest residential real estate brokerage on the East End, according to a press release from Corcoran. NRT, which also operates the Sotheby's International and Coldwell Banker brands, has 1,000 offices in 35 cities and produced $230 billion in closed sales volume in 2005, according to the company's website. NRT is a subsidiary of Realogy Corporation.
Liebman refuted suggestions that the deal represented the end of independent real estate firms on the East End. "This is a very big market and I think there is room for all different types of players," she said. Owners of local brokerages differed on Liebman's take on the deal.
"There's no question that it's a significant play in the brokerage industry because it certainly looks like the independents are going to be much smaller in nature, and I don't see how anybody can put together that type of conglomerate again given the number of corporate entities that are out there," said Scott Strough, the owner of Strough Real Estate Associates in Bridgehampton.
But, said Stuart Epstein, the co-owner of Devlin-McNiff in East Hampton, "There's always room for nimble, smaller companies or agencies in every category."
Strough said the disappearance of the Allan Schneider name represented "the end of an era." The loss is "significant" because "they did a terrific job in branding that name," he said.
The deal represents the conclusion of a process that began two years ago with the sale of the locally owned brokerages Cook Pony Farm, Dayton Halstead and Dunemere Associates, Epstein said. "This is just the sort of end game. There's not much more to go because there's really no one more to eat."