What went wrong at Eastern for them to completely close their doors?
Anyone with information on the firm that can explain the situation? They did 600m last year in investment sales which seems sustainable. Sad to hear.
Top 5 NYC Investment Sales Brokerage in 2017: 1) Cushman and Wakefield(6.36B) 2)CBRE 3)Eastdil Secured 4)HFF 5) Rosewood Realty (1.25B)
Source: https://therealdeal.com/issues_articles/the-inves…
UPDATE: https://therealdeal.com/2018/06/15/how-eastern-went-south-inside-the-firms-demise/
I was also surprised to hear about this - they had $622M in closings and were a top 10 investment sales shop.... Seems like this should be more than enough in terms of volume to continue operations.
Exactly what I was thinking. Or at least make changes when you see that you are financially struggling by laying off workers. To close completely so suddenly is odd.
Could be that ownership wants to be done and out. Not everyone wants to deal with the dog eat dog nature of I-sales, especially if they've made a lot of money
Literally just read about this on TRD. Something about the article doesn't make sense, but I've also not done enough research to form a different opinion: https://therealdeal.com/2018/06/15/eastern-consolidated-is-going-out-of…
It cites they tried to "find a buyer, but could not find a deal with favorable terms". To me, that just sounds off. Why shut down if you're a top 10 shop but can't find favorable terms? Call me a skeptic, but I can't imagine they said "eh, to hell with it. let's just shut down I'm tired of doing this."
Any insight from within? I'm sure we'll find out more in the coming months. For what it's worth, best of luck to the people affected by this and hope they land somewhere without struggling.
Definitely weird. I read on TRD this morning as well. 600mm sounds like a decent amount of transaction volume considering the competitiveness in the top market. Don’t know too much about them but they seem to have done well in the middle market sector. Also, I’m pretty sure they were doing well on the retail leasing side.
Well they are making in total about 5% of that $622M which is basically around $30M (correct me if it is higher than 5%) - definitely a lot of money but not enough to keep in competition with the CBREs and Cushmans of the world.
Still does not make sense as to why they did not sell their operation... I guess some people don't like money.
Margins for brokerage shops are like 3-10%. If they're getting 5% commission on $622M, that's only like $3M profit)
(I'm assuming $622 is sales not gross commissions)
they lost a bunch of their top agents recently, which doesnt help
Eastern Consolidated (Originally Posted: 05/07/2017)
Anyone have any thoughts/info about Eastern Consolidated (reputation, hours, culture, etc.) in NYC?
I am always skeptical of brokerage shops who have never ending job listings for a broker spot.
If it's for their debt/equity team, avoid. They have some decent investment sales assignments. That side of their business is a lot more developed.
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Hard to decide, both are exemplary, ethical organizations that demand the utmost respect from all players in the real estate capital markets. They can also get you a mawgige, by like tomorrah. No exclusive, no problem!
For reference, Meridian has attracted some top guys in the finance field.
However this is their method.
Hire 200 kids out of Yeshiva have them cold call non stop. Maybe 10-20% stick it out for 3 years and get picked up to be put on teams.
Let me put it this way, when they partner with a bank, like Astoria Federal 2-years ago and really want to get competitive in the NYC market they kill, this is in the $1-$10 mm space. When the deal is more nuanced it is all up to that brokers contacts in the business.
Their success has been clear. What you take away from them is in order to be successful in a small to mid market under $50mm loan size you have to be a correspondent.
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