Profile: A Hot Property
In Manhattan, where real estate is not just a major industry but also a full-contact sport, Barbara Corcoran is hall-of-fame material. In 1973 she started her company, which would later become the Corcoran Group, with $1,000 of her then-boyfriend's money. Today the business earns commissions on more than $3 billion in home sales a year. Along the way, Corcoran hasn't just mastered the art of selling co-ops. She's also developed a flair for self-promotion that has become one of her company's key competitive advantages.
In Corcoran's new book due out next month, Use What You've Got (And Other Business Lessons I Learned From My Mom), she explains how being press-friendly has helped her business. In one memorable example, Corcoran was so widely quoted when a competitor sold a Park Avenue triplex for a record-breaking $37 million that a CBS News anchor mistakenly attributed the sale to her, on air. "I graciously corrected him, but still everyone in New York continued to think we had made the highest-priced sale in history," she recalls.
Not surprisingly, rivals sometimes speak of Corcoran with a tinge of jealousy. Clark Halstead, founder and chairman of Halstead Property Co., calls her "a worthy competitor who brought a flamboyant personal style and an endless supply of red dresses to a traditionally discreet industry." Catty? A little. But he's right. Corcoran stands out in part because of her gender. None of her competitors can claim they began their careers as bepigtailed waitresses at the Fort Lee Diner across the river in New Jersey. Says Elizabeth Stribling, president of Stribling & Associates, "All of us in the residential real estate community consider her to be a marketing pro par excellence, and we all give her a lot of credit for it."
Of course, building a company is not as simple as assembling an eye-catching wardrobe or giving a great quote to a reporter. Corcoran has overcome her share of crises. Her company almost didn't survive the breakup of her relationship with her cofounder/boyfriend after he announced in 1976 that he was marrying one of Corcoran's employees. The partners split the company's staff and assets evenly, and Corcoran went out on her own and flourished.
She put herself on the media map in 1981, when she created the Corcoran Report, a biannual survey of co-op sale prices that she helpfully distributed to the New York City press. Her figures established her credibility as a real estate authority and are still widely published today.
But despite her guru status, Corcoran's business almost failed in the months following the stock-market crash of 1987, which sent real estate prices tumbling. At the nadir of her entrepreneurial career, Corcoran owed nearly $300,000 to creditors. "I was truly desperate," she recalls. To save the company, she sought a job that would provide her with enough income to pay back her debts. She persuaded Vincent and Tony Albanese, well-known New York developers who had built a new condo across from the United Nations, to hire her as their sales manager. "The hardest part wasn't lowering myself to take another job," she recalls. "But it was trying to convince [the Albanese brothers] why a company president would want to be their lowly sales manager." She admits that she was so desperate for cash that she fibbed about being a former nun in order to gain their trust.
Corcoran stayed on the Albaneses' payroll for a little under a year, and her salary allowed her to keep her company afloat. As the long bull market of the 1990s got under way, real estate prices and the fortunes of the Corcoran Group were propelled skyward. The volume of transactions that Corcoran's brokers handled grew from $400 million in 1992 to $1.8 billion in 1997, at which point a rival offered to buy all or part of the company. Up until that moment, Corcoran says, "I never actually realized my business was worth anything, because any profit we made, I just put right back into the business."
Five years later it was motherhood that finally pushed her to sell. "I was very emotionally split," Corcoran says. "I wanted to put 150% into being a good mother while still putting 150% into my business. I finally realized that giving 300% is impossible. Plus, I had my son, Tommy, when I was 45, almost 46. I was there for every golden minute as my business grew up. I wanted to witness Tommy's every golden minute, too. And I felt like I had accomplished my goals. I had finally finished what I set out to do."
In an episode of exceptionally lucky timing, Corcoran signed the final contract to sell her company on September 9, 2001, just two days before the World Trade Center attacks sent the New York economy into a tailspin. The company she sold to is NRT Inc., a subsidiary of Cendant Corp., which owns the Coldwell Banker, Century 21, and ERA brands. Corcoran sold her company for a reported $70 million. The first of two payments came in the form of $46 million in cash, yet she isn't living a life of uninterrupted leisure. She still serves as the company's chairwoman and public face.
In that role, she's spent the past few months downplaying talk of a real estate bubble. "We still don't have enough supply to satisfy demand," she firmly states. "And with the uncertainty in the stock market, there's nowhere else for the cash to go. Plus, we've never seen prices drop while mortgage rates were low."
That said, Corcoran admits that the number of visitors at open houses around New York City has fallen off by 27% in recent months. At the same time, Web traffic to the Corcoran Group's site has grown by about 30%. "The feedback I'm getting from buyers is that they are waiting for January to buy," she says. She's so confident about a resurgence, she's been snapping up small town houses in Brooklyn and Manhattan, hoping to take advantage of sellers' fears in order to negotiate a better price. So far, she has purchased seven buildings, each with three or four apartments. "Whenever sales values quiver, rentals go up," she says. Once again, Corcoran is coming up with the headline.
Putting Together an All-Star Team
Though her name is on all the For Sale signs, Barbara Corcoran isn't her company's only star. The entrepreneur has spent 25 years assembling 600 of New York City's best brokers into a well-functioning sales force -- one that lands top clients like Donald Trump. Here's her advice for cultivating young talent.
- Hire women. Though this precept flouts employment law, Corcoran recommends that you "always hire a woman over a man -- almost always, anyway." She says that since women have "more to prove" than men, they'll work harder. She also likes their generally collaborative style and says they're more fun to work with.
- Leave employees to their own devices. "When you tell someone, 'You're a bright kid, you'll figure it out,' the last thing in the world she wants is to crawl back and say, 'I can't do it," says Corcoran.
- Openly discuss your mistakes. Corcoran says that telling her brokers about her own flubs helps them to feel more open about sharing their own. "It's no good if people are afraid to fail or afraid to tell you they've failed," she says. "That atmosphere leads to a lot of skeletons stashed in closets. It's not fun when they start spilling out -- and they always do."
- Look for diverse personality types. "Leaders come in two flavors, expanders and containers," says Corcoran. "The best leadership teams have a mix of both." By her definition, "expanders" create and build ideas, and "containers" keep everything organized and in control.
- Protect the authority of your managers. "All too often a boss will let longtime subordinates make an end run around the new manager, completely undermining that person's chance to lead effectively," says Corcoran, who believes you should never let that happen.
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