Douglas Elliman announced the sale of its property management arm to PMG Holdings, a wholly-owned subsidiary of Associa, one of the largest property management firms in the country.
Associa paid $85 million for all of the equity interest in Douglas Elliman Property Management, according to a filing with the Securities and Exchange Commission. Elliman is using the proceeds from the sale, along with cash on hand, to pay off $50 million in convertible debt it took out from Kennedy Lewis Investment Management last year, which was redeemed for $95 million, according to the filing. Elliman will have $122 million in cash on hand as a result of the deal.
The board voted unanimously to approve the sale, with the exception of board member and Kennedy Lewis partner David Chene, who resigned following the deal. Chene was appointed to a board seat as part of Kennedy Lewis’ investment in Elliman, and the filing notes that the resignation “did not result from any dispute or disagreement.”
In 2024, Elliman’s property management arm employed over 216 people and accounted for 3.7 percent, or $36 million, of its nearly $1 billion in revenue.
As part of the sale, Elliman and PMG will enter into a five-year licensing agreement in which PMG can continue to use the Douglas Elliman brand as part of its property management services. Elliman and PMG will also continue to maintain the referral relationship that had existed between the brokerage and the property management firm prior to the deal.
The sale comes in the midst of the residential real estate industry undergoing rapid consolidation. Last month, Compass announced a $1.6 billion deal for Anywhere Real Estate, parent company of brokerages including Corcoran, Sotheby’s International Realty and Coldwell Banker.
Earlier this month, Rocket Companies closed its $14 billion deal for Mr. Cooper, the largest home loan servicer in the country.
Elliman itself received a takeover bid earlier this year from Anywhere Real Estate, which eventually fizzled out. The offer came after a successful first quarter for Elliman, which narrowed its losses to $6 million from $42 million in the first quarter the year before.
It backslid in the second quarter this year, when it reported a net loss of $23 million, significantly worse than the $2 million it lost the previous year. As part of the deal, Ellian expects to recognize more than a $75 million after-tax gain in the fourth quarter of this year.
Founded in 1979, Associa operated 300 offices across 42 states and in four countries outside the U.S as of last year. The firm moved its headquarters to two office buildings last year in Richardson, Texas, following a 30 percent jump in revenue over the prior two years.
Read more
Elliman’s property management arm suffers data breach
Associa buys HQ buildings in Richardson
