Andrew Bary

The reported takeover interest in Douglas Elliman highlights the value in the country's leading high-end residential real estate broker that has a strong presence in the New York area.

The stock of the company, which is the fifth largest broker nationally, looks like the biggest bargain in the consolidating real-estate brokerage industry.

Reuters reported Wednesday that Anywhere Real Estate offered $5 a share for Douglas Elliman in March. Anywhere, which owns the Century 21, Coldwell Banker, and Corcoran brands, then backtracked before submitting a fresh offer in May that Bloomberg then reported was worth over $4 a share. Those talks broke down when Douglas Elliman rejected that offer as inadequate, Reuters reported.

Anywhere on Monday agreed to be purchased by Compass, an industry leader, for more than $4 billion including assumed debt.

Douglas Elliman stock, which fell 2.1% on Wednesday to $2.80, trades at a marked discount to those reported offers. Douglas Elliman didn't respond to requests for comment.

The more than century-old Douglas Elliman now is valued at about $250 million -- and closer to $325 million assuming dilution from a $50 million convertible bond deal. The company's enterprise value (equity market cap minus net cash) is about $200 million, Barron's estimates, based on its $136 million of cash on June 30.

That makes the company a bite-size potential target and its valuation is much cheaper than peers. Compass is valued at $4.6 billion in the stock market and Anywhere's enterprise value is over $4 billion. The U.S. residential brokerage industry is highly fragmented. Compass and Anywhere together would have around 20% of the market.

Douglas Elliman should generate about $1 billion in revenue this year, valuing the company at 20% of sales based on its enterprise value. That's a big discount to Compass, which is valued at closer to 65% of projected 2025 sales. Like many micro-cap stocks, Douglas Elliman has virtually no analyst coverage.

Barron's wrote favorably on Douglas Elliman in late 2024, calling it a "fixer-upper that looks like a good deal for investors." The stock then traded around $1.90.

Douglas Elliman has elevated market share in some of the priciest real-estate markets in the country, including Manhattan, the New York City suburbs, the Hamptons, Palm Beach, Fla., and Aspen, Colo. Its average transaction size was nearly $2 million in the first half of 2025, comfortably exceeding those of its peers.

The company's stock languished until this year, declining from around $10 when it was spun off from Vector Group in late 2021. Douglas Elliman hasn't been profitable for much of the past few years due in part to depressed transaction volumes.

The earnings picture has improved since a new CEO, Michael Leibowitz, replaced Howard Lorber in 2024. The company operated at around breakeven during the first half of 2025, based on adjusted Ebitda -- earnings before interest, taxes, depreciation and amortization -- compared with a $15 million loss by that measure in the same period of 2024.

With Anywhere out of the picture, who could buy Douglas Elliman? Potential purchasers include Berkshire Hathaway, which operates a large real-estate brokerage business; Savills, a high-end U.K.-based residential broker and management company; or a private equity firm.

The Berkshire business had about $4 billion of annual revenue and had $30 million of operating profits in the first half of 2025.

A potential combination with the public Savills could make sense, since Savills has a market value of almost $2 billion and lacks a sizable presence in the U.S. Douglas Elliman is building an international operation after ending an alliance with U.K. high-end broker Knight Frank earlier this year. A trans-Atlantic tie-up would create a powerful international residential broker.

One issue appears to be Douglas Elliman's desire to go it alone.

The company didn't address the reported takeover interest on its second-quarter conference call, and Barron's was unable to find any reference to reported offer in Douglas Elliman's first or second quarter 10-Q filing.

The Reuters article Wednesday reported that Finra, the Financial Industry Regulatory Authority, was looking into purchases of company stock by a Douglas Elliman insider around the time of the reported Anywhere bid in May. Finra declined to comment.

Douglas Elliman appears to offer investors several ways to win: a restoration of consistent profits, a more active real-estate market, and a possible takeover.

The combination of the company's high-end niche and tiny market value could make an irresistible acquisition candidate.

Write to Andrew Bary at andrew.bary@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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September 24, 2025 16:38 ET (20:38 GMT)

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