Eastern Consolidated, the Manhattan-based full-service commercial real estate brokerage, will shut its doors at the end of July, Commercial Observer has learned.
“This was an incredibly difficult and complicated decision to make,” Paris, the president of the company, said in a statement provided to CO, “but ultimately the right one.”
The decision was arrived at last week, Paris and Hauspurg said, after months of conversations about a possible sale of the company.
“Earlier this year, Peter and I were approached by a third party, who inquired about a possible strategic partnership with Eastern Consolidated,” as per Paris’ statement. “We engaged [Kimberlite] an investment bank to evaluate the opportunity and gauge the market.” But all of the offers came with terms and conditions that Paris and Hauspurg said they could not live with.
Paris and Hauspurg declined to say who had made the offers, or who they had approached. “We went to the logical suspects,” Hauspurg, the chairman and CEO, told CO.
However, the company faced significant headwinds. While its retail and capital markets divisions had been earning revenue on par with its 2017 numbers, the investment sales division was down, commensurate with the rest of the market, and “there’s no clear indication of when conditions will improve,” Paris said.
And the climate for midrange firms focused on the middle market like Eastern is “not getting any better,” Hauspurg said. Indeed, there have been a number of dramatic moves at similarly sized firms, including the recent announcement that RKF was being sold to Newmark Group, and MHP Real Estate Services selling off a large chunk of itself to Banyan Street Capital. Moreover, in the residential sector, Town announced that it was shutting down its sale and leasing division in April.
This will no doubt put some of the biggest names in the business on the market, including Brian Ezratty, who had been with the company for 30 years, Adelaide Polsinelli, James Famularo, Robin Abrams, Adam Hakim, Ron Solarz and Matt Sparks.
Paris and Hauspurg said that they intended to keep their doors open for the next month-and-a-half to help the firm (40 of whom are staff, the other 100, or so, are brokers who work on commission) land on their feet, and said staff would be getting severance packages.