Howard Hanna takes a bite of the Big Apple with acquisition
Howard Hanna’s strategic expansion into Manhattan represents “Main Street coming into a Wall Street marketplace,” CEO Hoby Hanna tells Real Estate News.
Key points:
- With its acquisition of Elegran Real Estate, Howard Hanna now has full coverage of the New York City metropolitan area.
- Howard Hanna CEO Hoby Hanna said the move isn’t a reaction to the current consolidation wave, though he does expect more consolidation in real estate moving forward.
- While the next 18 months are “going to be very interesting,” Hanna doesn’t believe the industry will boil down to just a handful of dominant players.
As the leader of the largest independently owned, privately held brokerage in the country, Hoby Hanna has made the strategic move to plant the Howard Hanna flag in the center of New York City.
The Pittsburgh-based family firm announced on Oct. 16 that it is acquiring Elegran Real Estate, a 157-agent boutique brokerage with roughly $340 million in active listings throughout the Big Apple.
The deal marks a major milestone in Howard Hanna's decade-long expansion across New York. It signals the company's intent to challenge publicly traded giants like Douglas Elliman and Compass on their home turf with a distinctly independent, agent-focused model, Hanna told Real Estate News during a phone interview.
A 'springboard' to further growth
The move represents "Main Street coming into a Wall Street marketplace," Hanna said.
"We're really excited about it as a springboard and entree to the market. We think it's probably the first of a couple consolidated plays and integrated plays we'll do in the city itself with some other brokers. We want to continue that growth," Hanna added.
"We think we can become a platform for the independent broker to grow."
Prioritizing cultural and strategic alignment
Having already built a strong presence in the metro area through earlier acquisitions of Long Island-based Rand Realty and Coach Realtors, Hanna had watched "the volume of referrals into NYC grow across their entire footprint," signaling that an entrance into Manhattan was a natural next step. But rather than rush in, his brokerage waited for a partner that aligned culturally and strategically.
Enter Elegran. The firm's entrepreneurial mindset, private ownership and full-market coverage made it the right fit, Hanna said. Elegran will be folded into the Howard Hanna brand and identity, he confirmed.
Staying strategic amid a 'natural' industry trend
The Elegran acquisition is part of a long-term strategy, not a reaction to the current consolidation wave, Hanna explained — though he does see further consolidation happening in the residential brokerage industry. The next 18 months are "going to be very interesting," he added, especially as major deals like Compass' acquisition of Anywhere move forward.
Could residential real estate go the way of commercial brokerage, with the industry consolidating into just a handful of major players?
"I've always believed our industry is very fragmented. There's a low bar of entry to become a real estate agent and to start a company," he said. "I do think it's natural for the industry to see some consolidation. I don't know if we'll get down to four or five different platforms or companies."
For now, Hanna said his goal is to grow "with other like-minded brokers that might be local in scope" and who "fit into our cultural principles." Despite the emerging behemoths and growth of Wall Street-backed, tech-focused brokerages, Hanna believes real estate "still has a lot of local flair to it."