N.Y. ri­val is buy­ing bro­ker Te­les

Real es­tate bro­ker­age Dou­glas El­li­man seeks to grow in Cal­i­for­nia amid hous­ing boom.

Los Angeles Times - - BUSINESS BEAT - By An­drew Khouri an­drew.khouri @la­times.com Twit­ter: @khourian­drew

Lux­ury bro­ker­age Dou­glas El­li­man Real Es­tate, a well-known New York firm that en­tered the Los An­ge­les mar­ket less than four years ago, has agreed to pur­chase Te­les Prop­er­ties in a bid to ex­pand in Cal­i­for­nia as the state’s hous­ing mar­ket booms.

Te­les, a lo­cal ri­val based in Bev­erly Hills, has of­fices through­out South­ern Cal­i­for­nia. When Dou­glas El­li­man com­pletes the ac­qui­si­tion, the com­bined firm will have 20 of­fices and 630 sales as­so­ci­ates within the state — a dra­matic ex­pan­sion from El­li­man’s sin­gle lo­ca­tion in Bev­erly Hills.

A pur­chase price for the deal, ex­pected to close this month, was not dis­closed.

Stephen H. Kotler, pres­i­dent of Dou­glas El­li­man’s west­ern re­gion, said the com­pany wants to grow in Cal­i­for­nia be­cause its wealthy clients from New York, Mi­ami and abroad want to ac­quire an­other home in the state.

The red-hot Cal­i­for­nia real es­tate mar­ket also played a role, as did new lux­ury con­dos ris­ing in Los An­ge­les.

“We thought it was a good time to be here,” said Kotler, who will con­tinue to lead the west­ern re­gion.

Dou­glas El­li­man es­ti­mated that the deal will make it the sec­ond-largest non-fran­chise res­i­den­tial bro­ker­age in Cal­i­for­nia based on sales vol­ume, be­hind only Pa­cific Union.

Last year, El­li­man and Te­les com­bined had sales vol­ume of about $4 bil­lion in Cal­i­for­nia and $27.4 bil­lion na­tion­wide, ac­cord­ing to Dou­glas El­li­man, which was founded in 1911.

Te­les Prop­er­ties, founded in 2007, has among its cur­rent list­ings a $21.9mil­lion “gated es­tate com­pound” in Bel-Air and a $19.9-mil­lion five-bed­room home on New­port Beach’s Lido Isle with 200 feet of bay frontage and “mul­ti­ple docks for large yachts.”

Peter Loewy, Te­les’ chief ex­ec­u­tive, said agents sell­ing such lux­ury com­pounds can now use El­li­man’s su­pe­rior mar­ket­ing ca­pa­bil­ity on the East Coast and abroad.

“It makes our abil­ity to sell so much stronger,” he said.

The deal comes as sev­eral on­line bro­ker­ages try to shake up an in­dus­try built on per­sonal re­la­tion­ships. One of those, Redfin, based in Seat­tle, went pub­lic last week; its shares soared nearly 45% on the first day of trad­ing.

Even tra­di­tional bro­ker­ages like Te­les want to in­cor­po­rate more tech­nol­ogy. The firm has built an on­line por­tal that en­ables agents to han­dle their list­ings in one place, in­clud­ing mar­ket­ing on so­cial me­dia and web­sites for in­di­vid­ual list­ings.

“The kind of things that can take a week or more, we can do in 24 hours,” Loewy said.

Howard M. Lor­ber, chair­man of par­ent com­pany Dou­glas El­li­man Realty, said Te­les’ tech­nol­ogy is im­pres­sive but was not the driv­ing force be­hind the deal.

“It was great they had it,” he said. “But my ini­tial con­sid­er­a­tion was where their of­fices are.”

Among Te­les’ 19 of­fices in Cal­i­for­nia are lo­ca­tions in San Diego, New­port Beach, Bev­erly Hills and Carmel.

Fol­low­ing the ac­qui­si­tion, the Te­les name will be dropped, though se­nior ex­ec­u­tives will stay with the firm, in­clud­ing Loewy, who is set to be­come chief ex­ec­u­tive of bro­ker­age for Cal­i­for­nia.

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