A Year of Mega-Mergers Changing the Face of NY Real Estate

The last couple of years have been big ones for the residential real estate industry here in the city; not just in terms of square feet moved and dollars made, but in terms of mergers and acquisitions among some of New York's biggest, most prominent brokerage firms. More than half a dozen brokerages joined forces with other companies in 2003, absorbing or acquiring other businesses like a slow-moving flood.

While far-reaching effects of most of the shake-ups were more apparent from inside the purchasing - or purchased - companies, the merging of major brokerages will certainly trickle down to prospective apartment buyers and sellers. According to Andrew Heiberger of Citi Habitats brokerage in Manhattan, "2003 has been a monumental year. A lot of small brokerages have disappeared, and many of the larger firms have been acquired or merged. I think these changes are a direct reflection of current market trends."

According to David M. Michonski, chief executive officer of Coldwell Banker Hunt Kennedy, which acquired the firm of Charles H. Greenthal in September of last year, mergers are becoming a necessity to do business in the breakneck world of residential real estate; not only in New York City, but around the nation. "Mid-sized firms [are] feeling the squeeze. Today, you must either be big or a boutique. Being in the middle means you are being squeezed on all sides. Your agents may like being a smaller firm, but they expect you to do everything the big guys can do. To do so, you cannot be a boutique. You have to streamline and standardize or go broke. It comes down to often feeling you cannot ever please your agents and so one day, you say, "˜I'm going to sell.' That's how it comes about - not only here, but all over America today."

But is that all there is to it? And who are the major merged players? Let's take a quick look at the very different landscape of New York after the mega-mergers of 2003 and early 2004.

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