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Update: This article was updated on August 8, 2024, prior to Douglas Elliman’s second quarter 2024 conference call with shareholders.
New York-based brokerage Douglas Elliman’s revenue rose slightly in the second quarter of 2024 while its net loss improved as the firm weathered a challenging real estate market and faced a investor pressure.
Consolidated revenue increased to $285.8 million in the second quarter of 2024 from $275.9 million in the second quarter of 2023, and total transaction volume increased to $10.6 billion annually from $9.9 billion, according to an earnings report released Wednesday.
Douglas Elliman’s net loss was $1.7 million, or $0.02 per diluted common share, compared with $5.2 million, or $0.06 per diluted common share, a year ago.
Advance operating earnings before interest, taxes, depreciation and amortization (EBITDA) were $2.4 million, compared with a loss of $2.6 million in the prior year. Adjusted EBITDA for the company’s real estate brokerage segment was $6.6 million, compared with $2.5 million in the second quarter of 2023.
Howard M. Lorber
Howard M. Lober, chairman and CEO of Douglas Elliman, said in a statement.
“With the interest rate environment
Douglas Elliman’s consolidated operating loss was $3.7 million on revenue of $2.9 million for its real estate brokerage division, compared with an operating loss of $8.3 million on revenue of $1.0 million the prior year.
The average price per real estate transaction during the quarter was $1.81 million.
The improvement in the company’s financial results is certainly a relief as Elliman has faced mounting pressure from shareholders in recent months over erratic results over the past few quarters. Last week, one shareholder, Bradley Tirpak, wrote a letter to investors arguing that Lorber should be replaced by a full-time CEO and that he should be punished for failing to meet financial targets designated by the company’s board of directors. target and reclaim his winnings.
In early July, Douglas Elliman announced that the company had received a $50 million growth investment from credit-focused alternative asset manager Kennedy Lewis Investment Management. At the time, the company said the move was a strategy to strengthen its balance sheet and boost growth. As part of the transaction, Kennedy Lewis co-founder and co-managing partner David Chene joined Douglas Elliman’s board of directors.
The company also shared its financial performance for the first six months of 2024 in its earnings report.
Consolidated revenue declined slightly from the same period last year, from $489.9 million in the first half of 2023 to $486 million in the same period in 2024.
The average price per transaction in the first six months of this year was $1.72 million.
The company’s consolidated operating losses for the first half of 2024 were $45.1 million and its real estate brokerage division’s losses were $32.3 million, compared with $32.1 million and $18.4 million, respectively, in the same period last year.
In the first half of 2024, the company’s net loss was $43.1 million, or $0.52 per diluted common share, compared with a net loss of $22.8 million, or $0.28 per diluted common share, in the same period last year.
Those losses include a $17.75 million Antitrust Commission lawsuit settlement to Douglas Elliman. The company has paid $7.75 million in settlements so far and plans to make two more $5 million payments by December 31, 2027.
During an earnings call with shareholders Thursday morning, Lorber said the company was pleased with its latest progress during the quarter, which included preliminary court approval of an antitrust lawsuit settlement and a $50 million investment from Kennedy Lewis.
“We believe it positions us for strategic growth and expansion,” Lorber noted of the Kennedy-Lewis deal.
Lorber said the brokerage “remains encouraged” despite continuing to grapple with “generational high interest rates” and other market challenges, particularly because of its strength in new developments and the ultra-luxury sector.
Lorber said new developments at Douglas Elliman currently have a total deal value of $26.5 billion.
“$100 million worth of listings are coming and we are ready to sell these properties,” he added.
Lorber said the company is already starting to see a slight positive impact from growing listings in some markets, a trend it expects to continue into 2025.
Lorber went on to say that the company has “wisely” cut costs in recent months to boost its bottom line, including reducing headcount, cutting expensive sponsorships and reducing office space. Looking forward, he said the company will continue to improve operational efficiency through measures such as market expansion and technology adoption.
“We believe these efforts position Douglas Elliman to address industry challenges head-on without significantly impacting the agent experience,” Lorber said.
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