The Real Deal
May, 2004

ELLIMAN’S GOODSTEIN BUY MAKES GIANT BIGGER

Competitors Say They Are Not Too Worried About
Dottie’s Latest Purchase

By Stuart W. Elliot

Prudential Douglas Elliman put another notch in its belt last month with its purchase of Goodstein Realty as it expands in Manhattan and on Long Island’s North Shore.

Prudential CEO Dottie Herman’s latest buy adds 145 agents in five offices to her huge real estate network, which currently has 940 agents in Manhattan.

Goodstein accounted for $355 million in sales in 2003, and Elliman will also now work closely with the development arm of Goodstein, which will keep operating. Terms of the deal were not disclosed.

Competitors didn’t seem concerned by the acquisition, which hasn’t generated as much buzz as other recent purchases, particularly those made by Manhattan firms in the Hamptons.

“If anything, it’s further evidence of consolidation,” said Hall Willkie, president of Brown Harris Stevens. “Goodstein is a fine smaller firm, and Douglas Elliman just keeps getting bigger.”

“I don’t see it as a major shift or move,” said Diane Ramirez, president of Halstead. “Goodstein is a bit more focused on Long Island.”

On Long Island, Prudential will add Goodstein’s offices in Great Neck, Great Neck South and Roslyn to its existing offices. In Manhattan, Prudential gets Goodstein’s office on East 47th Street.

Goodstein’s six-year-old residential brokerage was a division of the 77-year-old family owned firm, which will now shift more its resources towards development, particularly in Richmond, Va., and South Florida.

“The sale of our brokerage division will allow us to refocus operations to the development side of the company,” said Ivan Goodstein, CEO and president of Goodstein Development. “This alliance with Prudential Douglas Elliman will allow greater opportunity for synergies.”

Herman told a reporter the purchase would help fulfill Prudential’s “Manhattan to Montauk” manifest by providing more offices on the North Shore.

“We needed coverage in these areas,” Herman said. “A lot of people who work in Manhattan live in Great Neck,” because of its proximity to the city via the Long Island Rail Road, she said. “Strategically, I had to be there so we can cover the Gold Coast.”

Both companies said Esther Muller, president and CEO of Esther Muller Consultants, who helped build up the Goodstein brokerage, was instrumental in the initiation of the merger.

“When it came to my attention that Dottie was coming into the city [with the purchase of Douglas Elliman last year], I said you can’t go from Manhattan to Montauk without having Great Neck,” Muller said.

Muller said that she will continue to be a consultant to both companies.