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When you find something that feels right, it’s a good idea to stick with it.
It’s safe to say that’s how Stephen Kotler, CEO of Douglas Elliman’s brokerage for the Western Region, has felt about his tenure with the New York-headquartered firm. Kotler has stuck with Elliman for more than three decades, starting as an agent in New York and moving his way up through management to where he is now, leading a huge portion of the firm’s brokerage operations.
Kotler spends most of his time in Texas these days, although he can also regularly be found checking in on the brokerage in Aspen and LA, which is where he was when he spoke to Inman in advance of his appearance at Inman’s inaugural Connect Austin conference on Oct. 9 at Brazos Hall.
Kotler shared with Inman details about his day-to-day at Elliman, thoughts on current industry challenges and how, despite popular opinion, an election year typically has very little impact on the real estate market.
Read on for more of what Kotler had to say, edited for brevity and clarity.
Inman: What do you do as head of Elliman’s Western Region brokerage operations?
Stephen Kotler: My responsibility is for what we call the Western Region, so it’s really everything west of the Mississippi, which includes California, Colorado, Texas and Nevada, to some degree. Those are the four states I look after, and I spend the majority of my time in Texas. I bought a home in Dallas, so my family is there.
But I’ve been in California for a couple of weeks and I go to Aspen at least once a quarter to visit our businesses there, and Nevada for some new development work we’re doing there. So my job is to kind of look after the company from a perspective of day-to-day.
But I do have a chief operating officer named Bill Begert who is also by my side and takes care of making sure the business is operating all day long and the lights are on. My job is to really think about growth — how we grow the agents that we currently have, who we consider our clients, how we recruit more good people to the company. Then, the other half of it is really looking at development marketing work in the states that I look after. A lot of that is taking place in Texas right now and a little bit in Nevada. So that’s the two hats I wear.
Interesting. So what are your goals in the next year for the Western region?
Before I answer that, just for a bit of history, I’ve been with the company for 33 years, and I started in New York as an agent. In 2005, I moved into managing one of our offices in New York. Then in 2014 when we opened in California with a development project, I started spending time here, and I moved to California up until the time now where I’m working in Texas.
So I’ve been through three owners in 33 years. When I started in ’91, we had 270 agents in the company and now we have a little over 6,500.
To get back to your question, it’s a little bit different state by state, but from higher level goals, we think about retention and the people that are our clients that have been here, for some, a shorter time, and some for a very, very long period of time. So retention is something that’s always a goal as a business.
I look at what I do as being a talent agent and managing talent. It just happens to be sales talent instead of a coach of a basketball team or other things that people do when you’re managing different people. So that retention part is important.
Growth is the other part that is important, finding good people. Our philosophy at Douglas Elliman is not to recruit the most people, but we really want the best people and it doesn’t necessarily mean just top-producing agents that have already been successful, but identifying talent who we can help coach and grow into a business.
I had a great meeting this morning with somebody who is not in the business but grew up in Beverly Hills. Her family has been here for a couple of generations and she’s a mom of three, and she’s now said, ‘Well, I really want to monetize all these relationships that I have.’ So someone like that, where you see she’s got all the tools — now we think about, how do we actually bring her in, coach her, build a business and grow her. So the other part is growth.
From the development marketing side, the goals for development marketing are really identifying opportunities that either come to us through current client relationships where we may have a developer that’s doing a project in Florida that now is looking at doing something in another state and they already know the proficiency that we have in our development marketing group run by Susan de França, who used to be president of Related Companies in New York.
So, we are considered, I think, the preeminent development marketing company in the country. These are full-time employees. We have planning and design with architects, we have marketing, we have strategic relationship planning, we have financial, legal. So when we go into a development, in many cases, that developer may have bought the land and now they’re planning a project and they want to bring us in at the start so we can think about what the project is, how it’s amenitized, who the architect is.
The goals for the next year with development marketing are working the opportunities that come to us where the developer says, ‘We’d like to talk to you about working together to sell a project,’ and also, building relationships with developers in these new cities where we are … so that when they’re ready to make a decision about a development, we’re going to be the first company, top-of-mind, that they would talk to.
How do you think agents are adapting to the new industry practice changes, post-settlement?
It’s a very challenging market. I think there’s going to be attrition in the market where the salespeople that are working more on the buy side and can’t catch up to being in this new world, how do you win business? Those people, I think you’re probably going to see go into other careers. So for all brokerages right now, I think that’s the concern.
The way to mitigate that is if you’re going to see less activity potentially on the buy side or more challenging activity on the buy side, is to recruit more business in so you have more revenue, more volume.
What are you looking forward to at the event in Austin?
I’m going to be a moderator for a new development panel called ‘Embracing The New Urbanity: How Trends and Economics Are Redefining Urban Living.’ We have Brad Stein from Intracorp Texas, who is a client and a significant developer in Austin, and Vipin Nambiar, who is principal at HN Capital Partners in Dallas, who owns the Rosewood Mansion on Turtle Creek and the Virgin Hotel. I think he’s one of the preeminent forward thinkers about how Dallas evolves, not just from the development side, but from culture [and] art … Dallas is having its moment.
I have noticed a ton of growth there recently.
Yes, and you have the design district, which is going to change dramatically. You’ve seen companies like [restaurant chain] Nation’s come to the design district, so I think it’s going to become sort of like what has happened in Miami in the design district, very similar. So it’s a really great place to be. You hear more languages being spoken in the coffee shop in the morning, you’re seeing a lot of Angelenos, people from the Midwest, so it’s becoming really fun.
And our office that we have is on Knox, which is right in the heart of where everything is happening. So I’m having fun with it. It’s really a great city to be in.
How do you feel about the election and how it might impact this year’s business?
We have a firm that we work with that does a lot of our market data. I asked at the beginning of the year — there’s always this narrative you hear with brokers that it’s going to be slow because it’s an election year — and the firm went back and looked at the last 40 or 50 years of elections, down-ballot election years as well as presidential election years. And the difference in the amount of business was really minimal. I mean, it was under 5 percent difference from election years to non-election years.
Interesting.
People always have a little bit of a pause, but it doesn’t seem to really affect the market as much as the narrative that’s always out there. It’s just a reason for people to say that right now the urgency in the market is not there the way that it needs to be to see more trades occurring, both from sellers and buyers.
So until there’s more urgency, these brokers are working hard, and the ones that know how to do it and are really putting their heads down are doing well. So you have to pivot and adjust and reinvent yourself when you have markets like this. As rates go down, you’ll probably see more urgency because the people who are in homes that have mortgages now at 3 percent or 4 percent, it’s difficult for them to move and buy. But when we see more rate cuts, hopefully, we’ll see an increase in urgency.
I think probably in the third or fourth quarter of next year is where we’re really going to see an impact. It’s not going to be like a boom, but it will definitely be a little bit of a ripple in things becoming busier. Specifically to the Austin market, our data is showing it’s been a really tough first and second quarter — oversupply, interest rates, just a lot of stuff going on with big employers there that were pulling back a bit. But in the last month, we’re seeing significant increased activity in listings and contract signings. So it seems that we’re maybe through the woods a little bit more.
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