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Moving on Up – Luxe Realty Agents Invade Texas to Advance the Pursuit of Super-Rich Buyers

The foyer of The Post Oak hotel is filled with upscale realty agents and others interested in the Houston real estate market. Photo credit: Douglas Elliman Real Estate.

HOUSTON – (By Ralph Bivins of Realty News Report) — You’re feeling lucky. Nabbing one of the ten free parking spots in the garage is a miracle in this glitz palace. But plebeians who want to avoid giving six bucks to the parking valet don’t venture on these premises often.

This is Tilman Fertitta’s The Post Oak Hotel and rooms here don’t come cheap. If you get in with a nightly rate significantly under $400 a night, you’ve hit a rare soft spot in demand.

Slipping into the side entrance of the hotel, you know Tilman spent heavily on this one. Intricate stone flooring, crystal chandeliers, the artwork – Tilman was going for a moon shot with the 38-story, 250-room Post Oak, which opened last year. He owns the five Golden Nugget casino hotels and recently he made a run at buying Caesars Palace in Vegas – but none of those properties come close to this.

Immediately inside the door, you see the “Essentials Retail” sundry shop. Almost blocking the entrance to the store is a large display of “SHUT UP AND LISTEN!” the business advice book by Tilman Feritta, a 62-year-old BOI (Born on the Island of Galveston) guy who struck it rich in the restaurant business. No wonder the man is a billionaire – he never misses a chance to hawk his book. (Actually, Tilman’s net worth is in the $5 billion range, according to Forbes.)

It’s four o’clock on a Wednesday in November. Two portable bars are stationed in the luxe hotel foyer. Bartenders serve the earlybirds and everything is free. Wine and beer only – no liquor. Butlers pass ugly, cylinder-shaped hors d’ouvres of uncooked tuna. No thanks.

A couple of folks nose around the Rolls Royce vehicles on display along the hotel’s foyer where Tilman has a micro Rolls dealership with a winding staircase – a shiny, curvy ornament that probably cost a quarter of a million bucks.

The Rolls luxe-mobiles are a reminder of what this Wednesday event is really about – (1) wealth and (2) Douglas Elliman Real Estate is coming to Houston. Elliman is a massive upscale residential brokerage firm that is unabashedly optimistic on the Houston market. The firm’s specialty is high-rise residential and it’s based in New York, where high-rise units sell for an average of $1,773 per square-foot, according to NeighborhoodX. Reportedly, some of New York’s finest residential units have sold for $10,000 per square foot.

It’s an A-List crowd at the Wednesday reception. The hotel’s foyer gets crowded. Well known real estate players mill around. Major deal makers whom I’ve known for decades confide about their projects in progress. I’m quickly convinced the Houston real estate market won’t be dead in 2020. During a one-hour cocktail reception, I hear about four different undisclosed projects that are in the pipeline and moving toward a groundbreaking in 2020. Another guy says he’s got a big deal ready to happen in Austin. A rumor floats around that somebody presented Tilman with a massive, unsolicited offer to buy the Post Oak Hotel and it was immediately rejected with a “Hell No.” Tilman spent over $350 million to develop the Post Oak complex on prime West Loop property and he may never let it go.

Howard M. Lorber, the executive chairman of Douglas Elliman, is in town for this event. The unofficial word circulates that Lorber decided not to stay overnight at the Post Oak Hotel and opted to go a couple of blocks away to Giorgio Borlenghi’s Hotel Granduca instead.

Anyway, Lorber – a nationally known heavy-hitter – isn’t the only Elliman representative flying in from New York for this. The firm’s top executives and a number of glamorous New York realty agents are on-hand. The real estate company, founded in 1911, has 7,000 agents. By sales volume, Douglas Elliman is number two in the nation. Several of the firm’s top producers blossomed into national celebrities on the “Million Dollar Listing” reality TV show. (For the record, Mr. Elliman, the company founder, died in 1972.)

Promotional press materials for this event tout the upcoming “arrival of vertical living in Houston.”  Nobody stops to mention that  in the 1960s master developer Gerald D. Hines built a 16-story residential tower near River Oaks. And Giorgio Borlenghi (who attended the Wednesday affair with his son, Alex, currently the president of the family’s Interfin company) has built an extensive Houston high-rise portfolio including the Four Leaf Towers, constructed in the early 1980s – and Four Leaf is less than a mile away from the Post Oak Hotel.

But we’re going along with it. Douglas Elliman is moving into Texas and we’re pretending that this is the “arrival of vertical living in Houston.” It’s a clever PR hook and I don’t mention aloud that Hines has a 46-story residential rental tower under construction in downtown, while Madison Marquette, Hanover and Caydon Properties of Australia are erecting some major towers in H-town right now, too. Roberto Contreras is already selling $1 million condo units in The Allen, which will be built near downtown.

Recently, Douglas Elliman Real Estate broke into the Texas market with a combination with Sudhoff Companies of Houston. The Sudhoff firm was founded less than a decade ago by Jacob Sudhoff, a Corpus Christi native who earned his Texas real estate license at the age of 18. The Sudhoff company, which became a dominating leader in marketing Houston high-rise condos, is a “good fit” for Douglas Elliman, company officials say.

Jacob Sudhoff is now chief executive officer of Douglas Elliman Texas. Jacob, 38 years old, is on-stage after the reception crowd moves into the Post Oak Hotel’s Grand Ballroom. The ballroom is packed, maybe 300 people.

“Houston is an amazing market for us,” says Scott Durkin, president of the Douglas Elliman firm.

The ballroom’s on-stage lighting seems too dim and there’s a hiccup or two with the sound system. For the sake of the A/V guy, you hope Tilman Fertitta doesn’t hear about this happening at his hotel. Tilman doesn’t suffer bumbling and fumbling. There’s a story that Tilman once appeared at one of his 600 restaurants, dumped the garbage cans onto the kitchen floor and castigated the kitchen staff because too much silverware was going into the dumpster. It cleared up the problem.

Jacob Sudhoff is leading the Elliman invasion into the Lone Star State. Douglas Elliman isn’t going to stop with just Houston. Austin and Dallas are next.

Sudhoff comments that his recruiting efforts indicate that staffing up the Austin office won’t be hard. Everybody wants to move to Austin, he says.

Home owners are fleeing from high-tax states. New Yorkers flock to Florida. New York Investor Carl Icahn and even President Trump himself recently announced plans to move to South Florida.

Texas is a key destination for people who want to get the hell out of California.

This sweeping migration of wealthy people to Texas is the underlying reason Douglas Elliman is coming to Texas, Lorber says.

The rotation of wealth isn’t just a domestic thing. It’s happening on a global basis.

Why? For one thing, there’s a lot more UHNWI in our world. That stands for Ultra High Net Worth Individuals, otherwise known as people who have more than $30 million.

The Wealth Report, a publication published by Elliman and London-based Knight Frank, indicates that the world’s population of ultra-rich people is expanding rapidly, says Paddy Dring of Knight Frank.

Standing on the stage in front of a dark blue backdrop, Dring throws out a lot of stats about rich people. An UHNWI is created every hour somewhere in the world. Twenty-two percent of UHNWIs are planning to make a purchase in 2019.

Dring is from the UK and he repeatedly butchers the pronunciation of “Houston.” Later on, Lorber finally chuckles and corrects him.

This is “HYOO-sten.”  It’s H-O-U-S-T-O-N – you know, the Energy Capital of the World. Dring says Houstonians are getting rich fast. Eight people are becoming millionaires every day in Houston, he says, and it seems quite believable.

As Dring spews out data, he’s building up credibility with the audience. Then he gets to the point – the world is getting more and more UHNWIs and they need a place to put their money.

“The Ultra High Net Worth community is seeking sanctuary in tangible assets,” Dring says. “Property is the beneficiary.”

Nov. 18, 2019 Realty News Report Copyright 2019

Read The New Book by Ralph Bivins, Editor of Realty News Report 

 Houston 2020: America’s Boom Town – An Extreme Close Up

Available on Amazon  http://tiny.cc/4a2g6y

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