Photo: DW Labs Incorporated/Shutterstock
For years, brokers have sued Compass for poaching agents and stealing them with lavish incentives that other brokers – burdened with things like making a profit – could not afford to match. But recently, as Compass has struggled to make money before burning all of its investor money, more than a few brokers have quit, many of them returning to the firms they previously worked at. Douglas Elliman in particular seems to be getting a lot of lavish agents (and others) from the Compass Exodus.
Recently, a number of super-successful agents, including husband-and-wife-run Assouline Team ($300 million in sales last year), new development team Stanton Hoch (40 The only true‘s ranking of Manhattan’s top real estate agents) and Kirsten Jordan (who has just acquired Bloom, previously a Compass development) all returned to Douglas Elliman. Michelle Griffith ($143 million in 2021 sales) and McKenzie Ryan ($10.6 million in sales from Instagram alone last year), who both worked at Corcoran before Compass, now have the startup for Elliman leaving. (Elliman has also picked up agents from other firms: Erin Boisson Aries, who left Christie’s after his New York office was traded back to Brown Harris Stevens, and statewide teams in Miami Beach and a number of large Texas brokers.)
Several Douglas Elliman agents said they noticed the influx. “Oh, that’s definitely happening,” said one, who speculated it might have something to do with Compass, which has just entered a second round of layoffs expected to affect mostly technical staff Marketing budgets could be cut Support staff – indispensable for top agents.
Douglas Elliman declined to comment or provide figures on how many agents were added by Compass or other companies. For its part, Compass denies there was any type of exodus, saying they actually hired more Elliman agents than vice versa, making 242 Elliman directors and agents with combined sales of $1.7 billion in 2021 and 2021 brought 2022. They also claimed that only the Compass agents mentioned in that article left. “Compass has over 30,000 agents in total and is in twice as many markets as Douglas Elliman, but in this article there are only 5 Compass agents who have left Compass,” said a Compass spokesperson. wrote
However, there are reasons agents want to leave. Agent previously said braked that the company had stopped covering the costs of even smaller things like DocuSign and Adobe prior to the IPO. Others have said that the company has grown so rapidly that even during flush times, the support staff has always been under-stretched. Over the summer, Compass announced it would no longer offer equity or cash incentives to new agents, a decision that will almost certainly impact brokers trying to expand their teams. And the upcoming layoffs are expected to be significant — the company’s SEC filing says it expects to spend between $23 million and $26 million on severance and other compensation.
CEO Robert Reffkin previously said the company plans to continue adding agents, although geographic expansion is on hold. The question is whether it will succeed. The company isn’t throwing cash around as freely as it used to (or ever) and plans to cut spending by $320 million this year. Compass increasingly seems to be what critics used to say: just another brokerage. One that, however, has not managed to turn a profit.
Meanwhile, Douglas Elliman, which went public late last year, is making a modest profit: $10.2 million in the second quarter of this year, which was viewed as generally favorable given the cooling housing market. The IPO allowed the company to offer its employees stock-based compensation and gain access to the capital markets to make acquisitions. Since the move created pressure to nurture and retain talent, it’s likely the company is using some of these perks to do just that. A property insider said the company isn’t spending anything close to the old Compass offerings — just higher splits on the first few deals and marketing budgets — but that’s apparently enough.
After moving to Douglas Elliman, the Assoulines narrated The only true They were looking for “really good rock star agents” to expand their team. McKenzie Ryan, who left Compass for Douglas Elliman in February, said she’s added several agents to her team and landed a TV show since joining. “In addition, our PR department is constantly working to bring our offers to the fore,” she says. “Just last night I checked my website and realized I have a press I didn’t even know I had.” Another broker cited the company’s PR, marketing and “robust” support staff.
The agents were vague about their reasons for jumping in on Douglas Elliman. The Assoulines said it presents “great opportunities” that fit into the team’s strategy. Per Kristen Jordan, “it just seemed like a perfect move.” Caldwell’s Julian Cohen felt it was “the right time to spread my wings.” All of this most likely translates to why brokers typically switch brokers: a better deal than before, which is what Douglas Elliman is now able to offer.
*This story has been updated with an answer and numbers from Compass.