Bracha shakes things up Linda O'Flanagan
1/4/2011 Residential power broker to launch new Manhattan franchise
Residential power broker Ilan Bracha is launching a franchise new to Manhattan that he says will transform brokerage business in the city.
News leaked on Monday that the top producing Prudential Douglas Elliman broker is leaving to open the first Keller Williams office in Manhattan. The Real Deal first reported the move.
"This is going to revolutionize the brokerage platform in New York City," Bracha told Real Estate Weekly, noting that the recession has squeezed some brokers who were used to pocketing hefty commissions on some of the priciest properties in the country.
"Over the next three to five years, brokers won’t be sharing as much of a profit as they used to during the height of the market. A company like Keller Williams - the fastest growing franchise in the US – provides a profit sharing option and a cap on commission splits that I think will contribute to a major shift in the way business is done across the board," he said.
"I want to be part of a company like Keller Williams due to their innovative business model, success and sterling reputation."
Keller Williams – a Texas-based firm founded by Gary Keller and Joe Williams in 1983 – operates a 70/30 commission split in favor of the broker which is capped at $50,000 per year.
Approximately half of all gross commission also goes back into a company profit sharing program that enables brokers to cash in when they recruit new agents.
Bracha will operate the franchise from the offices of his development company, B&B Investment, in Trump Tower. He’ll launch, he said, with several team members from PDE on board, but predicts he’ll have 250 agents within a year, including some high profile players from the Manhattan scene.
Bracha said the opening up of multiple listings in Manhattan through the introduction of Virtual Office Websites has leveled the playing field between large and small companies.
"This company will attract the best and the brightest in the industry," he said.
Franchises have not enjoyed a great deal of success in Manhattan. Century 21 NY Metro and Coldwell Banker Hunt & Kennedy both fell victim to the recession that took the shine off the city’s haloed housing market and, although Prudential is a powerhouse, neither RE/MAX, Weichert nor any of the other major franchises have managed to make headway here.
Dennis Santolo a broker who operates RE/MAX Battery Park City, said the lack of an MLS had played a part in thwarting the efforts of outsiders attempting to break into the lucrative Manhattan market, but added, "Franchises in Manhattan also have difficulty paying monthly fees to the parent company. That’s why I think RE/MAX’s attempt to set up franchises in the Big Apple failed."
RE/MAX’s commission split is 95%, plus a desk fee and a monthly fee to RE/Max. Bracha will pay a Keller Williams franchise fee for his team, which currently has listings worth approximately $300 million.
Mark Willis, CEO of Keller Williams Realty said he was thrilled to have Bracha and his team on board, adding. "We cannot express enough what an honor it is to have a business leader of this magnitude join us.
"We knew right off the bat we were going into business with a group that was incredibly passionate about the growth of their careers and the industry. We couldn’t ask for more."
Born in Tel Aviv, Israel, Bracha served as commander in the Israeli Army before traveling the world and moving to NY in 1996. He worked at a MLB Kaye before joing PDE and founding the Bracha Group. He won three of the company’s highest honors including #1 Group in Prudential Douglas Elliman for the past five years and ranked #2 in the entire Prudential Real Estate Network nationwide.
"Keller Williams Realty has weathered many changes by focusing on mindset and perseverance, which is exactly how I have driven my business to success in these times," said Bracha.
"I just clicked with the team at Keller Williams Realty — I knew it was the right move for us. The company believes as we do, that you put people before business. We envision our office growing stronger and larger with the support system they provide."