Could this week’s surge of election victories by Democrats across the country spell a challenge for residential real estate’s largest brokerage conglomerate?
Brown Harris Stevens’ Bess Freedman told CNBC Thursday that the so-called blue wave could mean more antitrust scrutiny from incoming legislators after Democrats won control of both chambers of Congress.
“Senator Elizabeth Warren has been very vocal about what they’re doing. She’s worried about this monopolistic behavior because they’re huge,” Freedman told Frank. “I think they’re going to be looking at what’s going on a little bit more carefully, so we’ll have to see.”
Freedman was referring to a letter the senator sent to Compass International CEO Robert Reffkin and CEO of Midwest Real Estate Data Rebecca Jensen in August requesting more information from the executives about MRED’s agreement to display private exclusive listings within Compass’ network. In the letter, Warren wrote that she was concerned the partnership would “harm consumers by driving up housing costs and worsening inequalities in the housing market.”
Warren’s letter came after the two executives received another letter requesting they appear before a U.S. House subcommittee focused on antitrust issues to provide more information. Earlier this summer, New York Attorney General Letitia James’ office confirmed that they were looking into Compass and its footprint in the state. James won re-election earlier this week.
During the interview, CNBC’s Robert Frank also said that the dispute between Freedman and leaders with Compass International Holdings had “gotten really personal,” pointing to a cease-and-desist letter the firm sent her last year and an ethics complaint she said it filed against her with the Real Estate Board of New York
“I just was like, I’m doing something right,” Freedman said of her reaction. “I was touching a thorn because they knew I was saying things that were upsetting.”
That fight has also manifested on social media, with Compass’ chief evangelist Leonard Steinberg routinely commenting on posts about Freedman’s media appearances discussing her opposition to the brokerage’s private listing network.
“Are you a paid spokesperson for Zillow?” Steinberg commented on a video of a separate CNBC interview posted to her Instagram account in September, followed by several crying laughing emojis.
In a post to his account following Freedman’s latest CNBC appearance, Steinberg referenced her firm’s use of “off-market, PRIVATE LISTING[S]” when marketing new development projects, one of his routine critiques of Freedman and BHS.
“Speaking from 2 sides of the mouth?” Steinberg wrote. “For the CEO of a large real estate brokerage to appear on LIVE TV… berating the concept of seller choice and off-market listings as discriminatory, and not in the interests of consumers, has to rate as one of the most hypocritical – or hilarious – moments in real estate history?”
In case you missed it…
Earlier this week, a panel of judges in New York sided with Mayor Zohran Mamdani, allowing the city to continue to roll out its controversial pied-à-terre tax. The decision, handed down on Wednesday, reversed an order from a lower court, which mandated the city abandon its implementation of the tax and start again.
The lawsuit, filed by homeowners in Richmond County court in August, alleged that the city “botched” its rollout of the tax and failed to use existing information in its possession to verify homeowners’ residency status before shifting the burden to residents to prove they live full-time in their homes to avoid paying the surcharge.
Other lawsuits targeting the tax have also been filed, including one by hotelier and developer Steve Wynn, the former commerce secretary Wilbur Ross and his wife, Hilary Geary Ross. Both cases challenge the tax itself, not its rollout, alleging it’s “unconstitutional” as it singles out nonresidents.
NYC Deal of the Week
The most expensive deal to land in city records this week was for the final penthouse at 111 Murray Street, which sold for nearly $31 million to Fashion Nova CEO Richard Saghian.
The runner-up was a penthouse at Naftali Group’s 255 East 77th Street, which traded for $26.3 million. The seven-bedroom, seven-bathroom apartment sold to an LLC, Emunah Properties, which lists an address in Flushing.
Read more
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Housing Notes: Could Compass have to “lawyer up” come January?
Real estate’s winners and losers on Election Day