HOUSTON – (By Michelle Leigh Smith for Realty News Report) – John Daugherty Realtors, a mansion-selling realty brokerage firm that has been a long-time force in River Oaks, Memorial and other bastions of Houston’s carriage trade, has been acquired by New York-based Douglas Elliman.
For more than 50 years, the oldest of the old-money clients have called John Daugherty, Jr. when it’s time to buy or sell an upscale dwelling or estate property.
Often, Daugherty’s deals were closed quietly, within the sanctuaries of the River Oaks Country Club Grill or in the club’s men’s locker room or over lunch at Tony’s. Some of Daugherty’s biggest deals came together on quail hunting trips in South Texas.
Even though Douglas Elliman has 120 offices and 7,000 sales agents, the Elliman name is not in the common vocabulary of Houstonians. But the firm is well known in New York, Beverly Hills, Aspen and other affluent markets with clients who are John Daugherty-ish.
The Botox Per Square Foot Factor
Douglas Elliman is very Park Avenue and has a powerhouse presence in the Palm Beach market. Remember Palm Beach, Fla.? It’s the site of The Breakers and Worth Avenue and where there is more Botox per square foot and the highest cosmetic surgery per household rate of any place in America.
This summer, word spread that Douglas Elliman was making a move into Texas. First, Elliman acquired the Sudoff Cos., a high-rise specialist firm and made Jacob Sudoff the CEO of Douglas Elliman, Texas.
Meanwhile, there were ongoing discussions with John Daugherty Realtors, which was founded Houston in 1967.
“They’ve been talking with us for more than a year, we always felt if we were going to sell, it would be to Douglas Elliman,” says Daugherty. “They control the high end of the market. They have 120 offices and more than 7,000 sales associates, with all the bells and whistles in high tech and then some. They even have training for the top producers’ assistants, which no one has. They are the Rolls Royce of the industry in the U.S.”
Houston’s Top Realty Agent
Then, a bombshell dropped.
Compass, a seven-year-old residential realty firm that just leased 27,000-SF of uber-prime office space in a brand-new building near Highland Village, made a run at Daugherty’s top producers.
The top producer in Houston, Daugherty’s Laura Sweeney, who closed $130 million in sales in 2018, was wooed away by Compass in mid-December. At the same time, Lisa Kornhauser left Daugherty for Compass. Kornhauser is no slouch. Ranked No. 4 in Houston, Kornhauser closed 61 sales in 2018 to the tune of $83 million.
“This isn’t my first rodeo,” says Daugherty. “In the early 2000s, we lost some agents in ‘03 and ‘04, and some in the late 70s, so this is the third time I’ve had this happen. What we’ve always done is circle the wagons, tighten up and ended up being better.”
Nevertheless, less than 10 days after the Sweeney/Kornhauser moves were announced, Douglas Elliman’s acquisition of Daugherty came down.
“We just reopened the door,” says Daugherty. “I will still be full time. I’m going to do what I enjoy the most – business development and marketing.”
He expects the new arrangements to all be in place in January, 2020. Daugherty says he’s certain the core foundation of his business will not change.
“Our firm will retain the same name, with the addition of `a Douglas Elliman Company’ in small print,” Daugherty says. “Our company has always been about people and homes. We’ve brought them together so harmoniously that life becomes more pleasurable, more secure, and more graceful, ” he says.
And you can’t fully understand Houston’s real estate markets by staring at a computer screen. “You won’t learn the nuances of a city or its neighborhoods by studying charts on the Internet,” he says. “You must live and breathe their history and understand what the future has in store.”
The Meet Up: John Daugherty and Howard Lorber
Daugherty says he first met the Elliman team in early part of last summer. “I went to New York and met with (Elliman Chairman) Howard Lorber at his offices,” Daugherty says. “He’s something else. We went to lunch with the Executive Vice President at some private club. We spent a day and a half there, we learned a lot more, were very impressed.
“We were just learning more about them before we decided to get (involved.) There’s not a second firm in this country that compares to their market penetration – they dominate the market,” said Daugherty. “We think we’ll be able to better it. They go the extra mile. We wanted to make sure we were working with the right people. There’s no question in my mind that we are compatible.”
Compatible? The Daugherty firm has 125 agents and two offices in the Houston area.
Elliman is big – and it’s international.
In addition to depth in the United States, Douglas Elliman has a strategic global alliance with London-based Knight Frank Residential for business in the worldwide luxury markets spanning 60 countries and six continents. The company also controls a portfolio of real estate services including Douglas Elliman Development Marketing, Douglas Elliman Property Management and Douglas Elliman Commercial.
“No decisions have been made on location – we’ve got our offices in The Galleria and the Woodlands,” says Daugherty. “All that will remain in place.”
Elliman is well known for their strength in the tall upscale tower market, where according to a report published by Knight Frank, there were 41 sales over $25 million last year. Daugherty says they will not be involved in the vertical marketing effort and will instead concentrate on high end residential.
Importantly, long-time Daugherty company president and chief operating officer Cheri Fama, will be president of Elliman’s Houston operation. Daugherty will be chairman.
Will it mean New York travel for Daugherty and less quail hunting?
“I hope not that,” he laughs, “but I will be going to New York more often.”
Junior’s First Home Sale
Daugherty’s father, John Daugherty, Sr. grew up on Elysian Street in Houston’s historic Fifth Ward and graduated from St. Thomas High School. Born in 1905, John Sr. was in the oilfield service business, with an office on Navigation before moving downtown to a building owned by George H. Brown that was catty-corner to Bank of the Southwest.
John Daugherty Jr. grew up in River Oaks and attended Lamar High School. In 1966, Daugherty Jr. sold his first home, one owned by Mary Katherine and Howard Creel for $300,000. A year later, he started his own firm.
“I will never forget how excited John was about that first sale,” recalls a boyhood friend, Jack Whitley.
Daugherty Jr., whose nickname was affectionately the Deb’s Delight (a reference to local debutantes), grew up in a family of privilege and power. “Some of my old friends still call me that or a shortened version – DD,” he laughs.
Daugherty’s boyhood friends – John Adger, the undisputed king of the bloodstock trade in the horse racing world. Tom Booth, Ralph B. Thomas, Senior Vice President of Fayez Sarofim & Co. and Jack Whitley, a Merrill Lynch top producer, still believe Daugherty will remain the go-to choice for Houston’s upper crust, regardless of the name of the company.
But it will be called “John Daugherty Realtors – A Douglas Elliman Company.” It’s a done deal.
Dec. 23, 2019 Realty News Report Copyright 2019
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