The nation's fourth largest real estate firm, New York-based Douglas Elliman, announced in February that it was moving into the Tampa Bay market through the purchase of St. Petersburg's Strickland Property Group. The acquisition boosted Elliman's presence in Florida to 22 offices — all on the east coast except for St. Petersburg — with more than 1,100 agents. Total sales volume last year was $4.7 billion.
The CEO of Elliman's Florida brokerage is Jay Phillip Parker, a lawyer and a member of the Miami Association of Realtors Leadership Board. Parker, 45, recently spoke by phone with the Tampa Bay Times about the Strickland purchase, the overall Florida market and Elliman's plans for the future.
During the interview, Parker remarked that he was enjoying the view from one of his firm's current South Florida listings — a $10.5 million, 5,000-square-foot penthouse in the Residences at the Ritz Carlton in Fort Lauderdale. The interview has been edited for length and clarity.
It's been three months since Elliman bought the Strickland firm. In a nutshell, how are things going?
We had a really strong couple of months. We did over $21 million in transactions since Feb. 1, which is wonderful (considering that) we bought a very small team.
Will you be adding agents?
We've received a tremendous amount of inquiries from agents looking to join Douglas Elliman, and I won't say that's surprising but it is flattering. Our first step will be to complete the digestion of Strickland Property Group and then recruit and bring in another half dozen or dozen agents that represent the type of quality we strive to achieve. Once that's smooth, we are going to look into other markets in Pinellas (County) and in downtown Tampa.
What differences are you noticing between the real estate markets in Tampa Bay and South Florida?
We definitely have picked up on a softer, slower pace. Particularly in St. Pete, it's definitely very different from Miami, Fort Lauderdale, but as you move into some of our other markets like Jupiter and Singer Island, it's a very similar, comfortable, quiet environment. When we first opened on the island of Palm Beach, one of the things we really liked was the sense of community. I would say that I've found that to be very consistent with what we've experienced in St. Pete so far. Everybody knows the market, knows the properties.
Do you see much of a difference between buyers on Florida's west coast compared to those on the east coast?
Obviously right now, it's generally more of the Midwestern type of buyer on the west coast but we see that shifting. We see more and more people from the east coast looking at the west coast. It's a more conservative buyer, a more reserved buyer. When I was exploring Naples, a developer told me, 'there are more billionaires here than you would every know.' They are not flashy, they are conservative. It's nice, we like that.
Is the 2017 federal tax reform act, which limited deductions for property taxes, having any impact on Florida's real estate market?
Tax reform is a very powerful stimulus, it's part of the reason people are moving to the west coast (of Florida). Prices on the west coast are probably at least 30 percent less (than on the east coast.) The top end of the luxury market in Miami is over $3,000 a square foot, and I don't think you have anything that comes close to that here. It's a humongous selling point, in addition to a little less density and a little more Florida-esque experience. But it's changing. You drive into downtown Tampa and it feels like a big, metro city but it still has that kitschy-esque feeling with palm trees that I don't think will ever fade away. You're never going to take the Florida out of those markets like Tampa and Jupiter and Delray Beach.
Speaking of big cities, the number of huge new condo towers and other mega projects in Miami is staggering. Is it getting overbuilt?
There's no question there is a ton of development. The overbuilt question is always one I struggle with — no one really knows how many surges in investment and transferring of domicile there will be. We're starting to see more activity coming out of Latin America and particularly Mexico and Brazil, which will bear well for Miami. The first quarter (of 2019) showed a little bit of a dip in most of our Florida markets but I'm optimistic with St. Pete or the Tampa market. If you look down the street in either Tampa or St. Pete, you see as many cranes as in Fort Lauderdale. We have a lot of developers looking to us for guidance on future development, and I'm very bullish on the St. Pete-Tampa market. I think there's a lot of value there, a lot of opportunities.
What does Elliman do with developers?
We have a relatively unique platform in that we are a brokerage firm for resales and the largest development marketing firm in the country. We can help developers with sales and design and strategy and work in pricing. We like the fact that we can come in and help to shape the product. When we look to work with a developer, it gives us a very strong marketing boost.
Have you done anything with Strategic Property Partners, the partnership between Tampa Bay Lightning owner Jeff Vinik and a company owned by Bill Gates that is developing the $3 billion Water Street project in Tampa?
Vinik contacted us. Before they started, we went out and met with them and spoke about our services. We know it's very hard for us to secure these projects if we don't have the presence there ourselves. They were going to work with a local company and we respect that. We have a very good relationship with (Vinik and Strategic) and think they are doing an incredible job.
Do you plan to expand to anywhere else on Florida's west coast?
I think next year we will end up in the Naples market and obviously we're looking at Sarasota. We are not interested in growth for growth's sake. We only want to be in those places where we feel a synergy. We did believe and still do believe that many Northeasterners, where we control the market, are now looking at Florida and are looking with more seriousness at the west coast. To not be there would be to not fulfill our mission to be in the market our clients want to be in.
Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate.