Sun October 31, 2007
Fillmore Rises, As Foxtons Sinks
By BRADLEY HOPE
A 40-year-old Brooklyn real estate firm is using the summer's subprime meltdown as a stepping-stone from which to expand into the other boroughs and Long Island. Fillmore Real Estate has traditionally focused exclusively on Brooklyn, but when Foxtons's executives announced the company was going bankrupt earlier this month, Fillmore's president, John Reinhardt, said he saw an opportunity.
Yesterday, his company bought 1,400 of Foxtons's listings for $110,000. This week, he hired 15 of that company's former brokers and he plans to hire as many as 50 more in the next two weeks. "This means we are going to be a regional player," Mr. Reinhardt said. The listings are predominantly in Queens, the Bronx, and Long Island. There are also a handful of listings in Manhattan and Staten Island, he said.
To accommodate this sudden growth spurt — the equivalent of fulfilling the company's two-year plan in two days — Mr. Reinhardt said he had to hire several sign manufacturers, put his information technology team on around-the-clock schedules, and begin a training program for the new agents joining his staff.
The Foxtons purchase will increase Fillmore's listings by nearly 50%, to 4,400, and the number of agents by about 8%, to 650. Mr. Reinhardt said he was also planning to open offices in each of the new regions where he now has listings. A lawyer for Foxtons, John Blomquist, did not return a call for comment yesterday.
Foxtons arrived in the New York market in 2003 amid much fanfare about the company's 2% commissions, just a third the standard 6% fee collected by brokers in the city. The office in New York was a subsidiary of the main Foxtons company in London, a city where the average commission rate between 2% and 3%.
The company spent as much as $13 million on advertising when it rolled out its new office, according to published reports.
Foxtons eventually had to raise its commission rate to 4% because of revenue problems, and in September the company fired 350 of its 380 employees, saying the market had "turned into a sharp decline." On October 2, the company filed for bankruptcy. Mr. Reinhardt said Foxtons "spent too much money in marketing and advertising."
"The climate has changed," he said. "It's harder to sell a home. You need professional real estate agents. … They benefited from an abnormal market where anything could sell. Now it's back to normal." |
