Engel & Völkers Americas, part of the luxury brokerage launched in Germany nearly half a century ago, is starting the year searching for a new CEO as it seeks to expand its global footprint.
The firm said CEO Anthony Hitt would step down at the end of 2024 after 11 years at the helm of the division that covers the United States, Canada, the Caribbean, Mexico and Central America. Stuart Siegel, chief strategy officer of Engel & Völkers Americas, is serving as the agency's interim president and CEO.
“Our search for a successor will be focused on identifying the best candidate who will not only be an ideal cultural fit but also bring an unwavering commitment to enthusiastically drive the future growth and success of our business," Engel & Völkers Group CEO Jawed Barna said in a statement.
The privately held firm's roots date to 1977, when real estate agent Dirk C. Engel started a boutique brokerage to handle high-end home sales in Hamburg. Several years later, Engel and his childhood friend Christian Völkers opened a brokerage office in Hamburg’s Elbe suburbs.
It was the first of six German shops with a unified brand identity that brought name recognition and eventually led to a worldwide expansion that now includes more than 900 residential offices and 16,000 agents across five continents. Christian Völkers, who rejected takeover offers after Engel's death in 1986, remains involved with the company as chairman of the advisory board.
In 2008, Engle & Völkers entered the United States, where it now has more than 5,700 agents in nearly 250 offices, including recent office openings in Portsmouth, New Hampshire; Dana Point, California; and Breckenridge, Colorado. The company said it's the only international brokerage that has successfully expanded from Europe to the U.S.
"We marry the very best of our European genetics with very solid local real estate professionals and practice," Siegel said in an interview. "That's the secret."
Mercedes-Benz test
In deciding which U.S. markets to enter, Engel & Völkers Americas uses what it calls the Mercedes-Benz test.
"If a market has a Mercedes-Benz dealership, then that's probably kind of where we want to be," Siegel said.
In 2019, the firm opened a development services division to work with builders, developers and investors. The division represents more than 500 projects worldwide, ranging from townhouse developments to mixed-use buildings in such markets as Atlanta, Dallas and Napa, California. The firm's local leaders offer site acquisition, research and development, sales and marketing and other services.
"The brand has a lot of nimbleness to it," Siegel said.
That reach is part of what Christa Huffstickler, owner of the Engel & Völkers Atlanta franchise, said drew her to the firm.
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She recalled at one of her first meetings with Engel & Völkers, officials told her they use technology to be more efficient but remain a people-focused business.
"That really resonated with me," Huffstickler said in an interview. "They felt very approachable and down to earth. You want to be with a company that can sell your $15 million property and also sell your $500,000 house or your $200,000 house."
Huffstickler, an Altoona, Pennsylvania, native who graduated from the University of Georgia, worked at two real estate firms before joining Engel & Völkers six years ago. At the time, she was one of three operators approved by the brokerage in the Georgia capital's metropolitan area.
But Huffstickler said, she soon craved more freedom after realizing that sharing the territory with other Engel & Völkers operators was less than ideal.
"I love this brand," she said, "but I didn't want to be in a market with other owners."
Expansion in South
Huffstickler explained her thinking to corporate officials, and they supported the change, she said. In December 2019, she took over the operations of one of the other partners and offered him a job in her firm. Following the pandemic, Huffstickler resumed negotiations with the third operator, and they reached an agreement late last year.
Today, Engel & Völkers Atlanta has more than 200 agents in four offices across the region. The boutique brokerage also serves Tennessee, North Carolina and Alabama.
The average home sales price for Engel & Völkers Atlanta and across the Americas' U.S. offices is between $750,000 and $800,000. Elevated mortgage rates in recent years have affected the residential real estate market as Engel & Völkers and other firms navigate significant industry changes related to the way agents are compensated.
In August, new rules went into effect dictating how buyers' agents get paid. Now buyers' brokers must have signed agreements before they can work with homebuyers. What's more, listing agents can no longer advertise compensation for buyers' brokers on the multiple listing service, the online platform where agents share their houses for sale.
The new regulations are the result of class-action lawsuits filed against the National Association of Realtors trade group. The transition has been a struggle for some agents, and many agree it will take months to unravel the impact of the new rules.
"This isn’t a radical change in our view," Siegel said. "Our advisers have always worked in their clients’ best interest. They continue to focus on providing value and transparency to whomever they represent, whether they are buyers or sellers."
Meanwhile, with potential homebuyers backing off from making purchases, some existing owners have been reluctant to put their properties on the market because they're locked in to historically low mortgage rates obtained during the pandemic. A dearth of buyers and a shortage of homes for sale have raised prices to record highs recently, keeping young families and others from qualifying for mortgages.
Huffstickler and other agents have said buyers and sellers can hold off for only so long before eventually deciding they have to do something.
Deals have picked up recently, she said, even before the Federal Reserve agreed to cut interest rates in September and again in November. While the interest rate cuts have yet to lead to lower mortgage rates, industry observers say they expect lower mortgage rates to jump-start the housing market.
"I feel extremely optimistic," Huffstickler said. "With interest rates starting to tick down, you're going to see a loosening in the market. There are so many people waiting for rates to come down."