Beth Friedman has watched competitors sell, merge, and go public. Her company, Brown Harris Stevens, has done nothing of the kind, and to prove it, it remains one of the top residential real estate companies in New York City.
New York City’s housing broker rankings tell a story of consolidation. Corcoran is part of the compass. Sotheby’s International Realty’s New York operation is Compass. Douglas Elliman is a public figure. One of the companies that once formed the upper echelon of the city’s market remains, a privately held brokerage firm. Brown Harris Stevens.
“They basically bought the entire New York market,” Beth Friedman, CEO of Brown Harris Stevens, told Inman. “There’s less choice. More of the same. That’s what happens with consolidation.”
Brown Harris Stevens, founded more than 150 years ago, is debt-free, owns many office buildings, and Mr. Friedman said he has no interest in becoming an entity that management doesn’t approve of.
The company has hired agents representing approximately $24 billion in combined carrier sales in the past year and recently began a partnership with First Team Real Estate, the largest independent brokerage on the West Coast.
For Friedman, maintaining privacy was never a compromise. Rather, it’s a strategy.
Sameness and its cost
Friedman said Compass’s dominance created something the market didn’t expect: a lack of choice.
Beth Friedman | Brown Harris Stevens
“There are fewer options,” she said. “It’s more industrial.”
Friedman said the merger has created uncertainty among agents of the acquired companies, including some who spoke with her after the company was absorbed into Compass. Agents at Corcoran, which was acquired by Compass as part of the Anywhere Real Estate deal, said the transition was disorienting, she said.
“There’s so much uncertainty,” Friedman said of the sentiment he’s heard from agents. “No one knows what’s going on and the agents are very restless.”
She drew broader conclusions about what consolidation entails, regardless of which companies are involved.
“The worst thing for any market is uncertainty,” she says. “When integration happens, people think, ‘What does this mean for me?'”
Private model as a competitive advantage
Mr. Friedman said Brown Harris Stevens’ independence gives it something its better-capitalized competitors cannot easily imitate: the ability to move without institutional approval.
“Being small and independent allows us to be more nimble in our decision-making because we can make decisions quickly without the approvals and layers of organizational bureaucracy of a public company,” she said. “We can respond to market conditions in real time.”
The company’s balance sheet is part of what makes that possible, she added. Brown Harris Stevens has no debt and owns a significant portion of the real estate in which its offices operate.
Compass, by comparison, has about $3 billion in debt, according to Friedman, and she estimates annual repayments of about $100 million.
“Compass does have $3 billion in debt, and the repayments on that debt are $100 million,” Friedman said. “That’s…a lot of money.”
He said companies that are heavily in debt end up being forced to make decisions they wouldn’t otherwise make, and said that dynamic played out at Anywhere Real Estate before the brand was acquired.
Redefining luxury
Friedman said the confusion between luxury and price point is one of the most persistent misconceptions in the industry.
“People are so perverse,” she said. “They think luxury is about price, but that’s not the case. Luxury to me is service, what you can offer each agent and consumer, and the attention you give them. It’s not a million or $10 million house. It’s the studio seller that you know will show up.”
She cited restaurateur Danny Meyer, widely credited with redefining hospitality in New York’s restaurant industry, as the model closest to what Brown Harris Stevens is aiming for.
“We’re like the Danny Meyer of real estate,” she said. “That’s different from the big, huge companies.”
Friedman said the company holds the record for the highest price per square foot transaction ever achieved in New York City, a track record that reflects what building long-term relationships can do at the upper echelons of the market.
$24 billion in career sales – and why they came
Brown Harris Stevens employs agents with total career sales of approximately $24 billion in the past year. Friedman said the agents who made the move had similar experiences at previous companies.
“Some people said they were tired of not having people come,” she said. “They went to the office and there was no one there. They needed marketing help and no one was there. The lights were on, but no one was home.”
Friedman said the firm does not pursue agents who are satisfied with other brokerages, which she said is a principled and practical position.
“I discussed this topic with Rob Refkin on stage,” she said, referring to the Compass CEO. “When you offer agents money and try to bully them into joining when they are happy at your company, it does a world of harm.”
The results of that approach are predictable, she said.
“If you buy it once, you’ll buy it again,” she says.
Be on your side with private listings
Friedman was candid about Brown Harris Stevens’ position in the privately traded network.
“If you give it the most exposure, you’ll get the best price,” she said. “Hiding things, not letting buyers know how many days have passed since a listing has been made or whether a price adjustment has taken place, is not beneficial to true price discovery.”
Friedman said the risks for agents directing clients to private networks are high.
“The fiduciary duty is to the seller, not the broker,” she says. “If you’re steering customers in a direction that doesn’t offer you the best price, that can come back at you.”
He said the model has endured in part because the way it works is difficult for consumers to parse.
“They can be confusing.” [expletive] “That’s the beauty of them,” Friedman said.
First team and what comes next
Friedman framed the partnership between Brown Harris Stevens and First Team Real Estate, announced earlier this year, as an intentional alternative to the acquisition model that has reshaped her competitive landscape.
“Why should I own someone?” she said. “Sharing is caring. Open your arms. Let’s work together. Let me help you. You help me too. We are in this together.”
She credited chief marketing officer Matt Leone with identifying this opportunity and said the partnership reflects a philosophy of collaboration over ownership.
Whether that signals a broader geographic push for Brown Harris Stevens is an open question. The company’s current footprint spans the East Coast in New York, Connecticut, New Jersey and Florida, and its relationship with First Team extends its network into California. Friedman said he would not rule out the possibility of further growth, but declined to comment on direction.
“I can’t say never,” she said. “If the right opportunity presents itself, would it be possible? Absolutely.”
woman in the room
Ms. Friedman is one of a small number of women leading a leading housing brokerage. She said she has resisted viewing her leadership primarily through that lens. Not because the observation is wrong, but because I believe a more useful conversation is about mindset.
“Women tend to play not to lose, rather than play to win,” she says. “It’s a completely different way of thinking about things.”
She said she sees that pattern in conversations about coworkers, direct reports, and compensation.
“When I see women come in and ask for something, I’m like, ‘Hello, I don’t want to bother you,'” Friedman said. “If you don’t know your worth, how do you expect me to value you?”
Her broader view is that the appropriate measure of progress is not the number of women in leadership, but whether women are failing at the same rate as men.
“I’ve had far more failures than successes,” she said of her career. “But you just don’t realize them. You fail a million times before you succeed once.”
5 years later
Friedman said Brown Harris Stevens’ five-year ambition is not about size. She described it as a return to market demand for exactly what the company has always been.
“I think we’re going to see the pendulum swing back to more independence and quality,” she said. “The big boxes are very tiring. People get lost in the sources. Who’s who, what’s where, who should I go to?”
For Brown Harris Stevens, the goal is growth defined by the quality of agents and the depth of their relationships, not the number of employees.
“We remain focused on adding quality agents and doing the right thing,” Friedman said. “If we ever lose that, we should close the doors. If we become something that I don’t recognize, something that doesn’t put distributors and consumers first, then we should sell and get out of the business completely.”
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