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What changed in Douglas Elliman Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Douglas Elliman Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+355 added−315 removedSource: 10-K (2025-03-17) vs 10-K (2024-03-08)

Top changes in Douglas Elliman Inc.'s 2024 10-K

355 paragraphs added · 315 removed · 227 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe series will be an ongoing process designed to foster a respectful and supportive workplace that enables Douglas Elliman to attract and retain a diverse workforce that represents its customers and its communities. 9 Table of Contents • We continued our Agents of Change initiative throughout 2023 and hosted events such as Stopping the Stigma Around Mental Health and Shattering the Glass Ceiling with successful and influential women in real estate. • Continued to support diversity efforts, including sponsoring Aspen Gay Ski Week, matching employees’ and agents’ contributions to the NAACP Legal and Education Fund, the AAPI Community Fund and various other health and social charitable organizations. • Launched our initial Diversity Equity & Inclusion survey for our employees and agents. • Continued to support organizations benefiting victims of various Florida hurricanes, California wildfires, Texas and Puerto Rico flood disasters and the Ukraine Humanitarian Crisis Fund of the American Red Cross.
Biggest changeSince its inception, we have hosted panels hearing from women at Douglas Elliman who are shattering glass ceilings and members of the Asian American and Pacific Islander community whose work has left a mark on our firm and industry at large. • We continued to support diversity efforts, including sponsoring Aspen Gay Ski Week, matching employees’ and agents’ contributions to the NAACP Legal and Education Fund, the AAPI Community Fund and various other health and social charitable organizations. • Through our robust community minded platform Elliman Cares, we continue to support organizations benefiting victims of various Florida hurricanes, California wildfires, Texas and Puerto Rico flood disasters and the Ukraine Humanitarian Crisis Fund of the American Red Cross.
After all parties agree that all contingencies of the sale contract have been satisfied, Portfolio Escrow delivers all pertinent documents for recording to the appropriate county clerk’s office, then releases funds to the seller and any other agreed-upon entity. Portfolio Escrow, as an escrow holder, is paid a fee equal to a percentage of the sales price.
After all parties agree that the contingencies of the sale contract have been satisfied, Portfolio Escrow delivers all pertinent documents for recording to the appropriate county clerk’s office and then releases funds to the seller and any other agreed-upon entity. Portfolio Escrow, as an escrow holder, is paid a fee equal to a percentage of the sales price.
We believe technology innovation is best fostered in these smaller, purpose-built PropTech companies to develop new products rather than inside of a large company, such as Douglas Elliman, because in-house technology is generally more costly, takes longer to bring new technology to market and rarely generates the most cutting-edge solutions.
We believe technology innovation is best fostered in these smaller, purpose-built PropTech companies to develop new products rather than inside of a large company, such as Douglas Elliman, because in-house technology is generally more costly to develop, takes longer to bring to market and rarely generates the most cutting-edge solutions.
We are bringing innovative, technology-driven PropTech solutions to Douglas Elliman by adopting new PropTech solutions for agents and their clients and also investing in select PropTech opportunities through our subsidiary, New Valley Ventures LLC. Our model is to source and use best-of-breed products and services that we believe will increase our efficiency.
We are bringing innovative, technology-driven PropTech solutions to Douglas Elliman by adopting new PropTech solutions for our agents and their clients and investing in select PropTech opportunities through our subsidiary, New Valley Ventures LLC. Our model is to source and use best-of-breed products and services that we believe will increase our efficiency.
On December 29, 2021, Vector Group completed the Distribution of the common stock of Douglas Elliman to its stockholders and we began trading on the New York Stock Exchange under the symbol “DOUG” on December 30, 2021. Strategy Since its inception in 1911, Douglas Elliman has challenged the status quo of the real estate industry.
On December 29, 2021, Vector Group completed the distribution of the common stock of Douglas Elliman to its stockholders (the “Distribution”), and we began trading on the New York Stock Exchange under the symbol “DOUG” on December 30, 2021. Strategy Since its inception in 1911, Douglas Elliman has challenged the status quo of the real estate industry.
We have a presence in most major luxury real estate markets in the United States, including New York, Florida, California, Texas, Colorado, Nevada, Massachusetts as well as the Washington, D.C. Metro area, which includes Maryland, Virginia and Washington D.C .
We have a strong presence in most major luxury real estate markets in the United States, including New York, Florida, California, Texas, Colorado, Nevada, Massachusetts as well as the Washington, D.C. Metro area, which includes Maryland, Virginia and Washington D.C .
In addition to entering into business relationships with these PropTech companies, we are committed to creating over time a dynamic portfolio of PropTech companies by leveraging our relationships to provide them access to our agents and their clients, as well as our knowledge and experience.
In addition to entering business relationships with these PropTech companies, we are committed to creating over time a dynamic portfolio of PropTech companies by leveraging our relationships to provide them access to our agents and their clients, as well as our knowledge and experience.
We believe that these investments provide us with unique access to cutting-edge and industry-leading technology, providing us with valuable technology systems to improve the efficiency of Douglas Elliman’s businesses while also capturing some of the value created by the combination of our expertise in the real estate industry and the PropTech companies with which we partner.
We believe that these inv estments provide us with unique access to cutting-edge and industry-leading technology, providing us with valuable technology systems to improve the efficiency of Douglas Elliman’s businesses while also capturing some of the value created by the combination of our expertise in the real estate industry and the PropTech companies with which we partner.
It leverages our investee and growing PropTech startup, LiveEasy. 5 Table of Contents PropTech Investments In addition to leveraging PropTech solutions to support our real estate brokerage and services operations, we believe that by investing in early-stage PropTech companies, Douglas Elliman can gain differentiated access to innovative PropTech 6 Table of Contents services while benefiting from the expected growth and valuations of these firms without the need to build or fully acquire them.
It leverages our investee and growing PropTech startup, LiveEasy. 7 Table of Contents PropTech Investments 8 Table of Contents In addition to leveraging PropTech solutions to support our real estate brokerage and services operations, we believe that by investing in early-stage PropTech companies, Douglas Elliman can gain differentiated access to innovative PropTech services while benefiting from the expected growth and valuations of these firms without the need to build or fully acquire them.
As of December 31, 2023 our PropTech investments include: • Rechat: a lead-to-close fully mobile technology dashboard for real estate agents including marketing, customer relationship management and transaction-management software. Douglas Elliman has a multi-year services agreement with Rechat for its agents, who are increasingly requesting and requiring superior access to technology and back-office support services.
As of December 31, 2024, our PropTech investments included: • Rechat: a lead-to-close, fully mobile technology dashboard for real estate agents including marketing, customer relationship management and transaction-management software. Douglas Elliman has a multi-year services agreement with Rechat for its agents, who are increasingly requesting and requiring superior access to technology and back-office support services.
More than a century later, the Douglas Elliman brand is still associated with service, luxury and forward thinking — our markets are primarily international finance and technology hubs that are densely populated and offer housing inventory at premium price points.
More than a century later, the Douglas Elliman brand is still associated with service, luxury and forward thinking — our mark ets are primarily international finance and technology hubs that are densely populated and offer housing inventory at premium price points.
Our hybrid DEDM platform matches experienced new development experts with skilled brokerage professionals to provide differentiated expertise and real time market intelligence to DEDM’s developer clients. We believe there is a clear path to growth through expansion into new markets. Provide ancillary services to enhance the client experience and drive growth.
Continue executing the growth strategy of DEDM. Our hybrid DEDM platform matches experienced new development experts with skilled brokerage professionals to provide differentiated expertise and real time market intelligence to DEDM’s developer clients. We believe there is a clear path to growth through expansion into new markets. Provide ancillary services to enhance the client experience and drive growth.
The average transaction value of a home we sold in 2023 was approximately $1.59 million — significantly higher than our principal competitors. We are building on our record of innovation. Douglas Elliman is focused on digitizing, integrating and simplifying real estate activities for agents and elevating their clients’ experiences.
The average transaction value of a home we sold in 2024 was approximately $1.67 million — significantly higher than our principal competitors. We are building on our record of innovation. Douglas Elliman is focused on digitizing, integrating and simplifying real estate activities for our agents and elevating their clients’ experiences.
The residential real estate business is built upon personal relationships and we have long believed Douglas Elliman’s team of employees as well as approximately 6,600 agents distinguish us from other residential real estate brokerage firms. Forbes recognized Douglas Elliman in its 2021 list of America’s best large employers and 2023 list of America’s best employers.
The residential real estate business is built upon personal relationships and we have long believed Douglas Elliman’s team of employees as well as approximately 6,200 agents distinguish us from other residential real estate brokerage firms. Forbes recognized Douglas Elliman in its 2023 list of America’s best employers.
We also offer, including through our subsidiaries and ventures, ancillary services, such as property management, title and escrow services. We are a Delaware corporation and were incorporated in 2021 in connection with the separation of Douglas Elliman from Vector Group Ltd., as an independent, publicly traded company, listed on the New York Stock Exchange (the “Distribution”).
We also offer, including through our subsidiaries and ventures, ancillary services, such as property management, title and escrow services. Douglas Elliman Inc. is a Delaware corporation incorporated in 2021 in connection with the separation of Douglas Elliman from Vector Group Ltd., as an independent, publicly traded company, listed on the New York Stock Exchange.
These challenges have been marked by a reduced inventory of homes available for sale, which we believe has been caused by elevated mortgage rates since early 2022. According to the NAR, sales of existing homes of 4.09 million in 2023, which was the lowest amount since 1995, declined from 5.03 million in 2022 and 6.12 million in 2021.
These challenges have been marked by a reduced inventory of homes available for sale, which we believe has been caused by elevated mortgage rates since early 2022. According to the NAR, sales of existing homes of 4.06 million in 2024, which was the lowest amount since 1995, declined from 4.09 million in 2023 and 5.03 million in 2022.
Drawing upon decades of experience and market-specific knowledge, DEDM offers a multidisciplinary approach that includes comprehensive in-house research, planning and design, marketing and sales. DEDM ranks among the most prominent sales and marketing firms in New York and Florida, as well as Douglas Elliman’s other luxury markets, and employs approximately 83 in-house development professionals.
Drawi ng upon decades of experience and market-specific knowledge, DEDM offers a multidisciplinary approach that includes comprehensive in-house research, planning and design, marketing and sales. DEDM ranks among the most prominent sales and marketing firms in New York and Florida, as well as Douglas Elliman’s other luxury markets, and employs approximately 86 in-house development professionals.
We are proud that women are well represented in our leadership as they comprise of 50% of our “Executive/Senior Level officers and managers” and 63% of our “First/Mid-Level officials and managers.” While most of Douglas Elliman’s employees are located in the New York and Miami metropolitan areas, our agents are located in New York, Florida, California, Texas, Colorado, Nevada, Massachusetts, Maryland, Virginia and Washington, D.C.
We are proud that women are well represented in our leadership as they comprise 46% of our “Executive/Senior Level officers and managers” and 65% of our “First/Mid-Level officials and managers.” While most of Douglas Elliman’s employees are located in the New York and Miami metropolitan areas, our agents are primarily located in New York, Florida, California, Texas, Colorado, Nevada, Massachusetts, Maryland, Virginia, Washington, D.C. and the Bahamas.
We do not intend for information contained in, or available through, our website to be part of this Annual Report on Form 10-K.
We do not intend for information contained in, or available through, our website to be part of this Annual Report on Form 10-K. 12 Table of Contents
By using PropTech solutions and offering a suite of cutting-edge applications, our open architecture technology 4 Table of Contents infrastructure provides users a “plug and play” environment where new features and functionality can be quickly added for the benefit of our agents and their clients. This ensures our technology remains state-of-the-art, vendor optionality is maintained, and our costs are minimized.
By using PropTech solutions and offering a suite of cutting-edge applications, our open architecture technology infrastructure provides users a “plug and play” environment where new features and functionality can be quickly added for the benefit of our agents and their clients. This helps ensure our technology remains state-of-the-art, vendor optionality is maintained, and our costs are minimized.
We will continue to employ a disciplined capital allocation strategy aimed at generating sustainable long-term value for our stockholders. Real Estate Services Large residential brokerage company with a recognized luxury brand.
We will continue to employ a disciplined capital allocation strategy aimed at generating sustainable long-term value for our stockholders. 5 Table of Contents Real Estate Services Large residential brokerage company with a recognized luxury brand.
To build on this established brand presence, Douglas Elliman produces owned content and generates earned media regarding a range of relevant topics — including brand initiatives, exclusive listings, new development projects and closed deals — that resonate with our clients and contribute to a strong share of voice across all major markets in which we operate, as compared to our principal real estate competitors, and enhances the professional credibility of agents and executives whose thought leadership is often sought by major global media outlets.
To build on this established brand presence, Douglas Elliman produces proprietary content and generates earned media regarding a range of relevant topics — including brand initiatives, exclusive listings, new development projects and closed deals — that resonate with our clients and contribute to a strong share of voice across all major markets in which we operate and enhances the professional credibility of agents and executives whose thought leadership is often sought by major global media outlets.
Despite various “agentless” models such as “iBuying,” approximately 89% of both buyers and sellers were assisted by a real estate agent or broker when purchasing or selling their home between July 2022 and June 2023, according to the National Association of Realtors, or NAR, highlighting the central role agents continue to play in real estate transactions.
Despite various “agentless” models such as “iBuying,” approximately 90% of sellers and 88% of buyers were assisted by a real estate agent or broker when selling or purchasing their home between July 2023 and June 2024, according to the National Association of Realtors, or NAR, highlighting the central role agents continue to play in real estate transactions.
Douglas Elliman owns Douglas Elliman Realty, LLC, one of the largest residential brokerage companies in the New York metropolitan area, which includes New York City, Long Island, the Hamptons, Westchester, Connecticut and New Jersey, and also conducts operations in Florida, California, Texas, Colorado, Nevada, Massachusetts, Maryland, Virginia and Washington D.C.
Douglas Elliman owns Douglas Elliman Realty, LLC, one of the largest residential brokerage companies in the New York metropolitan area, which includes New York City, Long Island, the Hamptons, Westchester, Connecticut and New Jersey, and also conducts operations in Florida, California, Texas, Colorado, Nevada, Massachusetts, Maryland, Virginia, Washington D.C., Arizona, New 4 Table of Contents Hampshire and Michigan.
The initial event, held in honor of Black History Month, involved listening to five members of the Douglas Elliman community discussing their personal and professional experiences as people of color working in residential real estate and highlighted the scope of the diversity, equity and inclusion challenges facing the industry.
The initial event, held in honor of Black History Month, involved listening to five members of the Douglas Elliman community discussing their personal and professional experiences as people of color working in residential real estate and highlighted the scope of the diversity, equity and inclusion challenges facing the industry. This event is expected to be held again in 2025.
We strategically aim to build on our leadership position in the New York metropolitan area, including New York City, Long Island, Westchester and the Hamptons, while entering and expanding in complementary markets as well as key markets in Florida, California, Texas, Colorado, Nevada, Massachusetts, Maryland, Virginia and Washington, D.C. , where the Elliman brand has strong awareness and brand equity. 8 Table of Contents Continue executing the growth strategy of DEDM.
We strategically aim to build on our leadership position in the New York metropolitan area, including New York City, Long Island, Westchester and the Hamptons, while entering and expanding in 10 Table of Contents complementary markets as well as key markets in Florida, California, Texas, Colorado, Nevada, Massachusetts, Maryland, Virginia and Washington, D.C. , where the Douglas Elliman brand has strong awareness and brand equity.
PropTech Solutions Supporting Real Estate Services Our PropTech strategy combines leveraging best-of-breed, proven legacy technologies and selectively partnering with early-stage, disruptive PropTech companies to support our real estate brokerage and services operations. This strategy supports our stakeholders, including our agents, their clients and our management team, by providing them with access to fast-changing and industry-leading technology.
PropTech Solutions Supporting Real Estate Services Our PropTech strategy leverages best-of-breed, proven legacy technologies and selective partnerships with early-stage, disruptive PropTech companies to support our real estate brokerage and services operations. This strategy supports our stakeholders, including our agents, their clients and our management team, by providing them with access to fast-changing and industry-leading technology.
In an effort to continue to foster relationships with our employees and agents, Douglas Elliman’s management implemented the following initiatives: • Hosted, and continue to host, company-wide virtual town halls, podcasts and communications across all regions.
In an effort to continue to foster relationships with our employees and agents, Douglas Elliman’s management implemented the following initiatives: • At Douglas Elliman we regularly host company-wide virtual town halls, podcasts, and communications across all regions.
Douglas Elliman was recently named the most trusted real estate brokerage firm in the United States as part of the America’s Most Trusted Series by Lifestory Research.
In 2024 and 2025, Douglas Elliman was named the most trusted real estate brokerage firm in the United States as part of the America’s Most Trusted Series by Lifestory Research.
Launched and expanded a new client and customer lifetime concierge solution . We are offering seasoned third-party products into Elliman Showroom, a white-glove homeowners engagement solution that provides access to services such as insurance, moving, telecommunications, utilities, solar home security and home services and facilitates the moving and home management needs of our agents.
We are offering seasoned third-party products into Elliman Showroom, a white-glove homeowners engagement solution that provides access to services such as insurance, moving, telecommunications, utilities, solar home security and home services and facilitates the moving and home management needs of our agents.
Douglas Elliman has approximately 125 offices with approximately 6,600 real estate agents in the New York metropolitan area, as well as in Florida, California, Texas, Colorado, Nevada, Massachusetts, Maryland, Virginia and Washington, D.C. The Douglas Elliman name is synonymous with luxury. Prominent new development sales and marketing firm.
As of December 31, 2024, Douglas Elliman has 121 offices with approximately 6,200 real estate agents in the New York metropolitan area, as well as in Florida, California, Texas, Colorado, Nevada, Massachusetts, Maryland, Virginia and Washington, D.C. The Douglas Elliman name is synonymous with luxury. Prominent new development sales and marketing firm.
Experienced team of talented agents and employees. The residential real estate business is built upon personal relationships, and we have long believed Douglas Elliman’s team of approximately 809 employees and approximately 6,600 agents (including 5,150 Principal Agents) as of December 31, 2023 distinguishes us from other residential real estate brokerage firms.
Experienced team of talented agents and employees. The residential real estate business is built upon personal relationships, and we have long believed Douglas Elliman’s team of approximately 783 employees and approximately 6,200 agents (including 5,264 Principal Agents), as of December 31, 2024, distinguishes us from other residential real estate brokerage firms.
Agents are able to generate significant repeat business from clients and referrals, with 65% of home sellers and 56% of home buyers between July 2022 and June 2023 choosing to work with an agent they had used in the past or from a referral, according to the NAR.
Agents are able to generate significant repeat business from clients and referrals, with 66% of home sellers between July 2023 and June 2024 choosing to collaborate with an agent they had used in the past or from a referral, according to the NAR.
This platform enhances Douglas Elliman’s suite of offerings for both the renters and landlords it represents. • Persefoni AI: a software-as-a-service, or “SaaS,” platform built to enable enterprises of all sizes to measure their carbon footprint accurately, dynamically, and regularly across all operations. • Tongo: a financial program that gives real estate agents instant access to future commissions up to 60 days before closing. • Guest House: a tech-enabled company focused on the home staging market. • Alpaca: investment in Getaway House, Inc., a start-up company that provides cabin rental services in rural areas throughout the United States. • Infinite Creator: investment in Infinite Creator, a do-it-yourself video creation app that allows any agent with a phone to walk through a guided process and film the key pieces for a high-end luxury presentation video. 7 Table of Contents • PropTech Venture Capital Funds: investments in the following venture capital funds providing New Valley Ventures with exposure to opportunities in the emerging PropTech industry. ◦ Camber Creek Venture Capital Funds: two funds that invest in a diversified pipeline of new PropTech ventures.
New Valley Ventures monetized 50% of its $500,000 investment in Bilt in 2024 and received approximately $1.3 million and recorded a gain of approximately $1.0 million. • Persefoni AI: a software-as-a-service, or “SaaS,” platform built to enable enterprises of all sizes to measure their carbon footprint accurately, dynamically and regularly across all operations. • Tongo: a financial program that gives real estate agents instant access to future commissions up to 60 days before closing. • Guest House: a tech-enabled company focused on the home staging market. • Alpaca: investment in Getaway House, Inc., a start-up company that provides cabin rental services in rural areas throughout the United States. • Infinite Creator: investment in Infinite Creator, a do-it-yourself video creation app that allows any agent with a phone to walk through a guided process and film the key pieces for a high-end luxury presentation video. 9 Table of Contents • PropTech Venture Capital Funds: investments in the following venture capital funds providing us with exposure to opportunities in the emerging PropTech industry. ◦ Camber Creek Venture Capital Funds: two funds that invest in a diversified pipeline of new PropTech ventures.
Residential Management Group provides a full range of fee-based management services for approximately 465 properties representing approximately 54,700 units in New York City, Nassau County, Long Island City and Westchester County. Full-service title insurance business. Douglas Elliman is also engaged in the provision of title insurance services through its subsidiary DE Title Services.
As of December 31, 2024, Residential Management Group provides a full range of fee-based management services for approximately 450 properties representing approximately 55,000 units in New York City, Nassau County, Long Island City and Westchester County. Full-service title insurance business. Douglas Elliman is also engaged in the provision of title insurance services through its subsidiary DE Title Services.
Elliman Essentials provides a curated list of offerings from preferred vendors that Douglas Elliman’s approximately 6,600 agents and an additional 592 employees access to source products, services and experiences to enhance business practices and purchase closing gifts for customers. Elliman Essentials can be accessed on our intranet portal, MyDouglas.
Elliman Essentials provides a curated list of offerings from preferred vendors that Douglas Elliman’s approximately 6,200 agents and an additional 409 employees access to source products, services and experiences to enhance business practices and purchase closing gifts for customers. Elliman Essentials can be accessed on our intranet portal, MyDouglas. Elliman Showroom is a client and customer lifetime concierge solution .
As of December 31, 2023, New Valley Ventures had investments in PropTech companies and funds (at a carrying value) of approximately $13.4 million. This amounts to approximately 3% of the value of Douglas Elliman’s total assets, which totaled approximately $493 million, as of December 31, 2023.
As of December 31, 2024, New Valley Ventures had investments in PropTech companies and funds (at a carrying value) of approximately $11.4 million. This amounts to approximately 2% of the value of Douglas Elliman’s total assets, which totaled approximately $494 million, as of December 31, 2024.
Furthermore, we maintain upside potential in the success of our PropTech partners in which we invest through minority stakes in their capital structures. Douglas Elliman boasts a prestigious luxury brand that is complemented by a comprehensive suite of technology-enabled real estate services and investments. These distinguishing qualities position us to capitalize on opportunities in the U.S. residential real estate market.
Furthermore, we maintain upside potential in the success of our PropTech partners in which we invest through minority stakes in their capital structures. Douglas Elliman boasts a prestigious luxury brand that is complemented by a comprehensive suite of technology-enabled real estate services and investments.
As of December 31, 2023 , we employed approximately 809 employees, of which 592 were employed by Douglas Elliman Realty LLC, 209 were employed at Douglas Elliman Property Management and eight were employed at Douglas Elliman’s corporate headquarters. Real Estate Brokerage .
As of December 31, 2024 , we employed approximately 783 employees, of which 409 were employed by Douglas Elliman Realty LLC, 216 were employed at Douglas Elliman Property Management and 158 were employed at Douglas Elliman’s corporate headquarters. Real Estate Brokerage .
Douglas Elliman has joined the Bilt Rewards Alliance, a network of more than 2 million rental units across the country where renters can enroll in the loyalty program to earn points on rent paid.
Douglas Elliman has joined the Bilt Rewards Alliance, a network of more than two million rental units across the country where renters can enroll in the loyalty program to earn points on rent paid. This platform enhances Douglas Elliman’s suite of offerings for both the renters and landlords it represents.
Forbes recognized Douglas Elliman in its 2021 list of America’s best large employers. Leading new development marketing platform. DEDM offers leading expertise in sales, leasing, and marketing for new developments in New York City, Long Island, the Hamptons, New Jersey, South Florida, California, Massachusetts and Texas, as well as throughout the United States and internationally.
DEDM offers leading expertise in sales, leasing, and marketing for new developments in New York City, Long Island, the Hamptons, New Jersey, South Florida, California, Massachusetts and Texas, as well as throughout the United States and internationally.
In 2023, New Valley Ventures also determined that the fair value of its investment in Audience was zero and reported realized losses on convertible debt securities of $236,000 for the year ended December 31, 2023. Our Competitive Strengths Leading luxury brand with a strong presence in markets where we have brand recognition and brand equity.
In 2023, New Valley Ventures also determined that the fair value of its investment in Audience was zero and reported realized losses on convertible debt securities of $236,000 for the year ended December 31, 2023.
Our goal is to create over time a portfolio of PropTech companies in which we are invested and also leverage their technology for the benefit of our agents and their clients.
Our goal is to build a portfolio of investments in PropTech companies and leverage their technology for the benefit of our agents and their clients.
Douglas Elliman offers comprehensive benefit programs to its employees which provide them with, among other things, medical, dental, and vision healthcare; 401(k) matching contributions; paid parental leave; and paid vacation time. We will continue to listen, while engaging and connecting with our employees and Douglas Elliman’s agents, to further our human capital management objectives.
In addition, Douglas Elliman offers comprehensive benefit programs to its employees which provide them with, among other things, medical, dental, and vision healthcare; 401(k) matching contributions; paid parental leave; and paid vacation time.
The Rechat technology is a key element of MyDouglas, Douglas Elliman’s primary agent portal designed to be our agents’ technology front door, and StudioPro, the cloud-based agent portal and marketing tool recently launched by Douglas Elliman that helps integrate all agent resources in one user-friendly suite. • Purlin: an automated intelligence platform to aid in home buying, an agent “paid social media” integration in MyDouglas and Portfolio Escrow client and agent portals that also integrate with MyDouglas. • Humming Homes: a tech-enabled home management service that is creating a new category of end-to-end home management.
The Rechat technology is a key element of MyDouglas, Douglas Elliman’s primary agent portal designed to be our agents’ technology front door, and StudioPro, the cloud-based agent portal and marketing tool recently launched by Douglas Elliman that helps integrate all agent resources in one user-friendly suite. • Purlin: an automated intelligence company that powers multiple platforms for Douglas Elliman including: a personalized collaboration platform to aid in home discovery for agents’ clients, an agent “paid social media” integration into MyDouglas that enables intelligent campaigns to promote specific listings, and client and agent portals and automated communications for Portfolio Escrow that also integrate with MyDouglas. • LiveEasy: a client- and customer-facing digital concierge service designed to assist clients and customers moving into and “setting up” their new homes, while offering additional services to maintain their homes.
Components of our MyDouglas solution include integrated customer relationship management, email marketing, marketing content creation and management, transaction management, video creation and virtual tours, comparative market analysis, home valuation tools, listing analytics, digital ad campaigns, open house management, new development sales and digital marketing, artificial intelligence, predictive analytics and more. Elliman Everywhere offers robust virtual and mobile resources.
The technology is completely “plug and play” enabled, which supports our ability to quickly adjust our solutions in concert with the digital transformation happening in PropTech today. 6 Table of Contents Components of our MyDouglas solution include integrated customer relationship management, email marketing, marketing content creation and management, transaction management, video creation and virtual tours, comparative market analysis, home valuation tools, listing analytics, digital ad campaigns, open house management, new development sales and digital marketing, artificial intelligence, predictive analytics and more.
Based on cash receipts in January and February 2024, we expect these modest increases to continue in the first quarter of 2024 and the NAR and other real estate industry consortiums are forecasting similar increases in the U.S. residential real estate market in 2024. 3 Table of Contents Despite these macroeconomic challenges, we believe our competitive advantages in the luxury markets distinguish us from our competitors and our comprehensive suite of real estate solutions, our industry-leading brand name, and our talented team of employees and agents set us apart in the industry.
Despite these macroeconomic challenges, we believe our competitive advantages in the luxury markets distinguish us from our competitors and our comprehensive suite of real estate solutions, our industry-leading brand name, and our talented team of employees and agents set us apart in the industry.
The user-friendly portal incorporates automated and simplified workflows for agent interactions, expansive data-rich dashboards and reports backed by artificial intelligence, or AI, and integrated data assets. The technology is completely “plug and play” enabled, which supports our ability to quickly adjust our solutions in concert with the digital transformation happening in PropTech today.
The user-friendly portal incorporates automated and simplified workflows for agent interactions, expansive data-rich dashboards and reports backed by artificial intelligence, or AI, and integrated data assets.
In partnership with residential real estate brokerages, LiveEasy is delivered in a white-labeled format that features the name and contact information of the selling agent. • Fyxify: a tech-enabled platform that utilizes direct scheduling and operating technology to avoid the inefficiencies of home repairs (for example: calling around, mystery repair costs and wasting time). • Bilt: a leading loyalty program and co-branded credit card for renters to earn points on their rent payments.
New Valley Ventures monetized its investment in LiveEasy in 2024 and received approximately $6.4 million and recorded a gain of approximately $4.6 million. • Fyxify: a tech-enabled platform that utilizes direct scheduling and operating technology to avoid the inefficiencies of home repairs. • Bilt: a leading loyalty program and co-branded credit card for renters to earn points on their rent payments.
Douglas Elliman also supports health driven organizations including God’s Love We Deliver, Project Angel Food, and the American Cancer Society. • Supported the Israeli American Council following the attacks on October 7, 2023.
Douglas Elliman also supports health driven organizations including God’s Love We Deliver, Project Angel Food, and the American Cancer Society. Our annual bike-a-thon, The Ride for Love, has raised more than a million dollars to date for God's Love We Deliver.
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By comparison, our transactions declined by 19% to 21,606 in 2023 from 26,573 in 2022. In the fourth quarter of 2023, our Gross Transaction Value and transactions of homes sold increased by approximately 5% and 5%, respectively, compared to the 2022 fourth quarter.
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These distinguishing qualities position us to capitalize on opportunities in the U.S. res idential real estate market.
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We believe the increases in the fourth quarter of 2023 reflected the gradual stabilization of home purchasing activity during 2023. This trend resulted in our first year-over-year increases in quarterly revenue, Gross Transaction Value and transactions since the first quarter of 2022.
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By comparison, our transactions increased by 1% to 21,781 in 2024 from 21,606 in 2023. We began to see a stabilization in our revenues during 2023. This trend continued throughout 2024, and our revenues were 4% more than in 2023.
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Our Elliman Everywhere initiative provides agents with the robust virtual and mobile resources they desire and will need to transact business from anywhere in the world, including markets where we do not have offices. This cloud-based agent portal includes workflow processing, a commission system, customer acquisition tools, an Innovation Lab and more, enhancing the agent experience and agents’ efficiency.
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Based on cash receipts in January and February 2025, we expect these increases to continue in the first quarter of 2025 and the NAR and other real estate industry consortiums are forecasting similar increases in the U.S. residential real estate market in 2025.
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It has built a solution that provides single-family homeowners a digital experience and offers a dedicated in-person home management team with a single point of contact and 24/7 support. The service employs data and insights to avoid reactive and expensive home maintenance issues.
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In partnership with residential real estate brokerages, LiveEasy is delivered in a white-labeled format that features the name and contact information of the selling agent.
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The investment will complement Douglas Elliman’s business in the Hamptons and align Humming Homes’ geographical growth with Douglas Elliman’s footprint in locations such as Aspen, Florida and Southern California. • LiveEasy: a client- and customer-facing digital concierge service designed to assist clients and customers moving into and “setting up” their new homes, while offering additional services to maintain their homes.
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In 2024, New Valley Ventures monetized two PropTech investments, LiveEasy and Bilt, and recorded gains of $4.6 million and $1.0 million respectively, for the year ended December 31, 2024. Our Competitive Strengths Leading luxury brand with a strong presence in markets where we have brand recognition and brand equity.
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These town halls are intended to promote a spirit of camaraderie and educate our employees and agents. • In addition, in 2023 we launched a Learning Management System to support employee continued professional development. • In 2023, we launched the inaugural “Agents of Change” initiative.
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We define principal agents as number of teams, plus the number of individual agents not on teams. Forbes recognized Douglas Elliman in its 2021 list of America’s best large employers. Leading new development marketing platform.
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These town halls are intended to promote a spirit of camaraderie, educate our employees and agents, and strengthen our culture of connectivity and entrepreneurialism. • In 2024, we hosted the record-breaking virtual Elliman Summit, a three-day event that brought together 9,786 agent participants across 31 sessions.
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The Summit featured top coaches and agents from around the country who shared their expertise, strategies, and experiences. 11 Table of Contents • We also introduced Elliman Empower where we provided open office hours, offering personalized support 3–4 times per week to answer questions, explore tools, and refine skills to enhance the success for our agents. • In 2023, we launched the inaugural “Agents of Change” initiative.
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The series will be an ongoing process designed to foster a respectful and supportive workplace that enables Douglas Elliman to attract and retain a diverse workforce that represents our customers and its communities.
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We value employee wellness and as such, we also provide an Employee Assistance Program offering virtual support services from healthcare to mental health, along with access to financial advisors through Morgan Stanley, both fully employer paid. We will continue to listen, while engaging and connecting with our employees and agents, to further our human capital management objectives.
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Government Regulation We operate in an increasingly complex legal and regulatory environment. Our business and the products and services that we offer are affected by a continually expanding and evolving range of local, state, federal, and international laws and regulations.
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For additional information on government regulation refer to Part I, Item 1A “Risk Factors—Risks Related to Our Real Estate Business—Industry structure changes that disrupt the functioning of the residential real estate market, including as a result of litigation or regulatory scrutiny, could materially adversely affect our operations and financial results.” Available Information Our website address is www.elliman.com.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeLack of available credit or lack of confidence in the financial sector could adversely impact the real estate market. 10 Table of Contents Any of the following could be associated with cyclicality in the real estate market by halting or limiting a recovery in the residential real estate market, and have an adverse effect on our business by causing periods of lower growth or a decline in the number of home sales and/or property prices which in turn could adversely affect our revenue and profitability: • periods of economic slowdown or recession; • rising interest rates and inflation; • the general availability of and cost of mortgage financing; • a negative perception of the market for residential real estate; • commission pressure from brokers who discount their commissions; • an increase in the cost of homeowners’ insurance for owners of single-family homes and condominium associations; • weak credit markets; • a low level of consumer confidence in the economy and/or the real estate market; • instability of financial institutions, which may result in, among other things, depository banks not honoring escrow and trust deposits held by certain of our subsidiaries; • legislative, tax or regulatory changes that would adversely impact the real estate market, including, but not limited to, potential reform relating to Fannie Mae, Freddie Mac and other government sponsored entities that provide liquidity to the U.S. housing and mortgage markets, and potential limits on, or elimination of, the deductibility of certain mortgage interest expense and property taxes; • adverse changes in economic and general business conditions in the New York metropolitan area or the other markets in which we operate; • a decline in the affordability of homes; • declining demand for real estate; • declining home ownership rates, declining demand for real estate and changing social attitudes toward home ownership; • acts of God, such as hurricanes, earthquakes and other natural disasters, or acts or threats of war or terrorism; and/or • adverse changes in global, national, regional and local economic and market conditions, particularly in the New York metropolitan area and the other markets where we operate, including those relating to pandemics and health crises, such as the COVID-19 pandemic.
Biggest changeAny of the following could be associated with cyclicality in the real estate market by halting or limiting a recovery in the residential real estate market, and have an adverse effect on our business by causing periods of lower growth or a decline in the number of home sales and/or property prices which in turn could adversely affect our revenue and profitability: • periods of economic slowdown or recession; • rising interest rates and inflation; • the general availability and cost of mortgage financing; • a negative perception of the market for residential real estate; • commission pressure from brokers who discount their commissions; • an increase in the cost of homeowners’ insurance for owners of single-family homes and condominium associations; • weak credit markets; • a low level of consumer confidence in the economy and/or the real estate market; • instability of financial institutions, which may result in, among other things, depository banks not honoring escrow and trust deposits held by certain of our subsidiaries; • legislative, tax or regulatory changes that could adversely impact the real estate market, including, but not limited to, potential reform relating to Fannie Mae, Freddie Mac and other government sponsored entities that provide liquidity to the U.S. housing and mortgage markets, and potential limits on, or elimination of, the deductibility of certain mortgage interest expense and property taxes; • adverse changes in economic and general business conditions in the New York metropolitan area or the other markets in which we operate; • a decline in the affordability of homes; • declining demand for real estate; • declining home ownership rates, declining demand for real estate and changing social attitudes toward home ownership; • acts of God, such as hurricanes, earthquakes and other natural disasters, or acts or threats of war or terrorism; and/or • adverse changes in global, national, regional and local economic and market conditions, particularly in the New York metropolitan area and the other markets where we operate, including those relating to pandemics and health crises. 13 Table of Contents We are impacted by the performance of the real estate markets in the New York metropolitan area and there may be a reduction in the attractiveness of those markets as well as the other markets in which we operate.
The health of the U.S. real estate industry impacts our success and the industry is significantly affected by changes in economic and political conditions of the United States as well as real estate markets, which could adversely impact our real estate business, returns on our investments, trigger defaults in project financing, cause cancellations of property sales, reduce the value of our properties or investments and could affect our results of operations and liquidity.
The health of the U.S. real estate industry impacts our success and the industry is significantly affected by changes in economic and political conditions in the United States and internationally as well as real estate markets, which could adversely impact our real estate business and returns on our investments, trigger defaults in project financing, cause cancellations of property sales, reduce the value of our properties or investments and could affect our results of operations and liquidity.
Douglas Elliman’s brand value could diminish significantly if any such incidents or other matters erode consumer confidence in it. The failure of third-party vendors or partners to perform as we expect or appropriately manage risks, or our failure to adequately monitor third-party performance, could result in harm to our reputation and generate revenue.
Douglas Elliman’s brand value could diminish significantly if any such incidents or other matters erode consumer confidence in it. The failure of third-party vendors or partners to perform as we expect or appropriately manage risks, or our failure to adequately monitor third-party performance, could result in harm to our reputation and ability to generate revenue.
This strategic alliance subjects Douglas Elliman to some risks, including risks associated with the sharing of proprietary information between parties, non-performance by Douglas Elliman or Knight Frank Residential of obligations under the strategic alliance agreement, disputes over strategic or operational decisions or other matters and reputational risks, as well as litigation risks associated therewith.
This strategic alliance subjects Douglas Elliman to risks, including risks associated with the sharing of proprietary information between parties, non-performance by Douglas Elliman or Knight Frank Residential of obligations under the strategic alliance agreement, disputes over strategic or operational decisions or other matters and reputational risks, as well as litigation risks associated therewith.
Real estate commission rates vary somewhat by market, and although historical rates have been relatively consistent over time across markets, there can be no assurance that prevailing market practice will not change in a given market, or across the industry, in the future.
Real estate commission rates vary by market, and although historical rates have been relatively consistent over time across markets, there can be no assurance that prevailing market practice will not change in a given market, or across the industry, in the future.
The loss of some of our existing relationships with listing providers, whether due to termination of agreements or otherwise, changes to our rights to use listing data, or an inability to continue to add new listing providers, may cause our listing data to omit information important to our agents or clients.
The loss of existing relationships with listing providers, whether due to termination of agreements or otherwise, changes to our rights to use listing data, or an inability to continue to add new listing providers, may cause our listing data to omit information important to our agents or clients.
On October 31, 2023, a federal jury in the Western District of Missouri found in favor of a class of plaintiffs of home sellers from April 2015 to June 2022 in three states, and awarded damages of approximately $1.78 billion (which is subject to statutory treble damages) for anticompetitive behavior in violation of federal antitrust laws arising from the NAR’s requirement that sellers’ agents for MLS-listed properties offer to pay a portion of commissions received on the sale of such properties to buyers’ agents (the Sitzer/Burnett case).
On October 31, 2023, a federal jury in the Western District of Missouri found in favor of a class of plaintiffs of home sellers from April 2015 to June 2022 in three states, and awarded damages of approximately $1.78 billion (which was subject to statutory treble damages) for anticompetitive behavior in violation of federal antitrust laws arising from NAR’s requirement that sellers’ agents for MLS-listed properties offer to pay a portion of commissions received on the sale of such properties to buyers’ agents (the Sitzer/Burnett case).
We are periodically subject to claims, lawsuits, arbitration proceedings, government investigations and other legal and regulatory proceedings in the ordinary course of business, including those involving labor and employment, anti- discrimination, commercial disputes, competition, professional liability and consumer complaints, intellectual property disputes, compliance with regulatory requirements, antitrust and anti-competition claims (including claims related to NAR or MLS rules regarding buyer-broker commissions as further described in Note 13 to our combined consolidated financial statements included elsewhere in this Form 10-K), securities laws and other matters, and we may become subject to additional types of claims, lawsuits, government investigations and legal or regulatory proceedings if the regulatory landscape changes or as our business grows and as we deploy new offerings, including proceedings related to our acquisitions, securities issuances or business practices.
We are periodically subject to claims, lawsuits, arbitration proceedings, government investigations and other legal and regulatory proceedings in the ordinary course of business, including those involving labor and employment, anti- discrimination, commercial disputes, competition, professional liability and consumer complaints, intellectual property disputes, compliance with regulatory requirements, antitrust and anti-competition claims (including claims related to NAR or MLS rules regarding buyer-broker commissions as further described in Note 14 to our consolidated financial statements included elsewhere in this Form 10-K), securities laws and other matters, and we may become subject to additional types of claims, lawsuits, government investigations and legal or regulatory proceedings if the regulatory landscape changes or as our business grows and as we deploy new offerings, including proceedings related to our acquisitions, securities issuances or business practices.
Although the legal relationship between residential real estate brokers and licensed real estate agents throughout most of the real estate industry historically has been that of independent contractor, newer rules and interpretations of state and federal employment laws and regulations, including those governing employee classification and wage and hour regulations in our and other industries, may impact industry practices and our company owned brokerage operations.
Although the legal relationship between residential real estate brokers and licensed real estate agents throughout most of the real estate industry historically has been that of independent contractors, newer rules and interpretations of state and federal employment laws and regulations, including those governing employee classification and wage and hour regulations in our and other industries, may impact industry practices and our company-owned brokerage operations.
Numerous factors can influence our results of operations, including: 19 Table of Contents ◦ our ability to attract and retain agents; ◦ our ability to develop innovative solutions and offer new services on our platform; ◦ changes in interest rates or mortgage underwriting standards; ◦ the actions of our competitors; ◦ costs and expenses related to the strategic acquisitions, investments and joint ventures; ◦ increases in and timing of operating expenses that we may incur to grow and expand our operations and to remain competitive; ◦ changes in the legislative or regulatory environment, including with respect to real estate commission rates and disclosures; ◦ system failures or outages, or actual or perceived breaches of security or privacy, and the costs associated with preventing, responding to, or remediating any such outages or breaches; ◦ adverse judgments, settlements, or other litigation-related costs and the fees associated with investigating and defending claims; ◦ the overall tax rate for our business and the impact of any changes in tax laws or judicial or regulatory interpretations of tax laws, which are recorded in the period such laws are enacted or interpretations are issued and may significantly affect the effective tax rate of that period; ◦ the application of new or changing financial accounting standards or practices; and ◦ changes in real estate market conditions; ◦ changes in regional or national business or macroeconomic conditions, including because of a pandemic, which may impact the other factors described above.
Numerous factors can influence our results of operations, including: • our ability to attract and retain agents; • our ability to develop innovative solutions and offer new services on our platform; • changes in interest rates or mortgage underwriting standards; • the actions of our competitors; • costs and expenses related to the strategic acquisitions, investments and joint ventures; • increases in and timing of operating expenses that we may incur to grow and expand our operations and to remain competitive; • changes in the legislative or regulatory environment, including with respect to real estate commission rates and disclosures; • system failures or outages, or actual or perceived breaches of security or privacy, and the costs associated with preventing, responding to, or remediating any such outages or breaches; • adverse judgments, settlements, or other litigation-related costs and the fees associated with investigating and defending claims; • the overall tax rate for our business and the impact of any changes in tax laws or judicial or regulatory interpretations of tax laws, which are recorded in the period such laws are enacted or interpretations are issued and may significantly affect the effective tax rate of that period; • the application of new or changing financial accounting standards or practices; • changes in real estate market conditions; • changes in our leadership or senior management; and • changes in regional or national business or macroeconomic conditions, including because of a pandemic, which may impact the other factors described above.
Accordingly, for U.S. federal income tax purposes, the Distribution, excluding the distribution of our common stock with respect to Vector Group stock option awards and restricted stock awards, together with certain related transactions is not expected to result in the recognition of gain to Vector Group with respect to the distribution of our common stock to the Vector Group stockholders in respect of such Vector Group common stock and, except to the extent a stockholder received cash in lieu of fractional shares of our common stock, no income, gain or loss will be recognized by, and no amount will be included in the income of such holder upon the receipt of shares of our common stock pursuant to the Distribution.
Accordingly, for U.S. federal income tax purposes, the Distribution, excluding the distribution of our common stock 26 Table of Contents with respect to Vector Group stock option awards and restricted stock awards, together with certain related transactions is not expected to result in the recognition of gain to Vector Group with respect to the distribution of our common stock to the Vector Group stockholders in respect of such Vector Group common stock and, except to the extent a stockholder received cash in lieu of fractional shares of our common stock, no income, gain or loss will be recognized by, and no amount will be included in the income of such holder upon the receipt of shares of our common stock pursuant to the Distribution.
Any of the foregoing litigation (including any related settlement agreement) or subsequent regulatory action, if successful, could result in significant changes or disruptions to industry practices of the residential real estate market, including changes or disruptions to buyers’ agent’s commissions, and could negatively affect our financial condition and results of operations.
Any of the foregoing litigation (including any related settlement agreements) or subsequent regulatory action, if successful, could result in significant changes or disruptions to industry practices of the residential real estate market, including changes or disruptions to buyers’ agent’s commissions, and could negatively affect our financial condition and results of operations.
The attractiveness of New York City may also be negatively affected by other factors, including high residential property sales prices or rents (or a risk or perceived risk of a fall in sales prices in the future), high costs of living, the impact of the Tax Act, the impact of changes in state tax law, such as the real estate transfer tax on luxury property, and 11 Table of Contents negative perceptions surrounding quality of life, safety and security (including the risk or perceived risk of acts of terrorism or protests).
The attractiveness of New York City may also be negatively affected by other factors, including high residential property sales prices or rents (or a risk or perceived risk of a fall in sales prices in the future), high costs of living, the impact of the Tax Act, the impact of changes in state tax law, such as the real estate transfer tax on luxury property, and negative perceptions surrounding quality of life, safety and security (including the risk or perceived risk of acts of terrorism or protests).
There can be no assurances as to whether the Department of Justice (the “DOJ”) or FTC, their state counterparts, or other governmental body will determine that any industry practices or developments have an anti-competitive effect on the industry.
There can be no assurances as to whether the Department of Justice (the “DOJ”) or FTC, their state counterparts, or other governmental bodies will determine that any industry practices or developments have an anti-competitive effect on the industry.
This decline has caused more homeowners to remain in their homes, reducing the volume of home sale transactions closed by our brokers and agents. Historically low home inventory levels could have a material adverse effect on our business, financial condition and results of operations . Consumers may adopt alternatives to full-service agents.
This decline has 14 Table of Contents caused more homeowners to remain in their homes, reducing the volume of home sale transactions closed by our brokers and agents. Historically low home inventory levels could have a material adverse effect on our business, financial condition and results of operations . Consumers may adopt alternatives to full-service agents.
Customary commission rates could change due to market forces locally or industry-wide, as well as due to regulatory or legal changes in such markets, including because of litigation or enforcement actions. In addition, there can be no assurance that we will be able to maintain the percentage of commission income that we collect from our agents.
Customary commission rates could change due to market forces locally or industry-wide, as well as due to regulatory or legal changes in such markets, including because of litigation or enforcement 16 Table of Contents actions. In addition, there can be no assurance that we will be able to maintain the percentage of commission income that we collect from our agents.
Changes in the Federal Reserve Board’s policies, the interest rate environment and mortgage market are beyond our control and difficult to predict. In 2022, the cost of financing for homebuyers increased significantly, which resulted in higher monthly payment costs that make homes less affordable to purchasers and these conditions continued in 2023.
Changes in the Federal Reserve Board’s policies, the interest rate environment and mortgage market are beyond our control and difficult to predict. Beginning in 2022, the cost of financing for homebuyers increased significantly, which resulted in higher monthly payment costs that make homes less affordable to purchasers and these conditions have continued.
In addition, the success of any future acquisition strategy we may pursue will depend upon our ability to fund such acquisitions given our total outstanding indebtedness, find suitable acquisition candidates on favorable terms and for target companies to find our acquisition proposals more favorable than those made by other competitors.
In addition, the success of any future acquisition strategy we may pursue 20 Table of Contents will depend upon our ability to fund such acquisitions given our total outstanding indebtedness, find suitable acquisition candidates on favorable terms and for target companies to find our acquisition proposals more favorable than those made by other competitors.
Industry structure changes that disrupt the functioning of the residential real estate market, including as a result of litigation or regulatory scrutiny, could materially adversely affect our operations and financial results.
Industry structure changes that disrupt the functioning of the residential real estate market, including as a result of litigation or regulatory scrutiny, could materially adversely affect the Company’s operations and financial results.
Given economic uncertainty and other factors affecting management’s assumptions underlying the valuation of our goodwill and indefinite-lived intangible assets, the assumptions and projections used in the analyses may not be realized and our current estimates could vary significantly in the future, which may result in an additional goodwill or indefinite-lived intangible asset impairment charge.
Given economic uncertainty and other factors affecting management’s assumptions underlying the valuation of our goodwill and indefinite-lived intangible assets, the assumptions and projections used in the analyses may not be realized and our current estimates could vary significantly in the future, which may result in an additional goodwill or indefinite-lived 17 Table of Contents intangible asset impairment charge.
To date, we have experienced 20 Table of Contents no material realized losses on or lack of access to our cash held in operating accounts or our invested cash or cash equivalents, however, we can provide no assurances that access to our cash held in operating accounts or our invested cash and cash equivalents will not be impacted by adverse conditions in the financial markets or the negative performance of financial institutions.
To date, we have experienced no material realized losses on or lack of access to our cash held in operating accounts or our invested cash or cash equivalents, however, we can provide no assurances that access to our cash held in operating accounts or our invested cash and cash equivalents will not be impacted by adverse conditions in the financial markets or the negative performance of financial institutions.
For example, in April 2021, we determined that an unauthorized party gained access 17 Table of Contents to Douglas Elliman Property Management’s IT network, temporarily disrupted business operations and obtained certain files that contained personal information pertaining to owners and others in buildings managed by employees of Douglas Elliman Property Management.
For example, in April 2021, we determined that an unauthorized party gained access to Douglas Elliman Property Management’s IT network, temporarily disrupted business operations and obtained certain files that contained personal information pertaining to owners and others in buildings managed by employees of Douglas Elliman Property Management.
Examples may include claims associated with Real Estate Settlement Procedures Act (“RESPA”) compliance (including, but not limited to, those related to the broker-to-broker exception, marketing agreements or consumer rebates), broker fiduciary duties, multiple listing service practices, sales agent classification, federal 21 Table of Contents and state fair housing laws, and state laws limiting or prohibiting inducements, cash rebates and gifts to consumers.
Examples may include claims associated with Real Estate Settlement Procedures Act (“RESPA”) compliance (including, but not limited to, those related to the broker-to-broker exception, marketing agreements or consumer rebates), broker fiduciary duties, multiple listing service practices, sales agent classification, federal and state fair housing laws, and state laws limiting or prohibiting inducements, cash rebates and gifts to consumers.
ITEM 1A. RISK FACTORS Our business faces many risks. We have described below the known material risks that we and our subsidiaries face. There may be additional risks that we do not yet know of or that we do not currently perceive to be significant that may also impact our business or the business of our subsidiaries.
ITEM 1A. RISK FACTORS Our business faces many risks. Below we described the known material risks that we face. There may be additional risks that we do not yet know of or that we do not currently perceive to be significant that may also impact our business.
Such consequences may reduce our revenues, require additional expenditure, or distract our management’s attention from pursuing our growth strategy. We could experience meaningful changes in industry operations or structure, as a result of governmental pressures, the result of litigation, changes to NAR or MLS rules, the actions of certain competitors or the introduction or growth of certain competitive models.
Such consequences may reduce our revenues, require additional expenditure, or distract our management’s attention from pursuing its growth strategy. 18 Table of Contents We could experience meaningful changes in industry operations or structure, as a result of governmental pressures, the result of litigation, changes to NAR or MLS rules, the actions of certain competitors or the introduction or growth of certain competitive models.
In some instances, search engine companies may change these rankings to promote their own competing services or the services of one or more of our competitors. Our websites have experienced fluctuations in search result rankings in the past, and we anticipate fluctuations in the future.
In some instances, search engine 19 Table of Contents companies may change these rankings to promote their own competing services or the services of one or more of our competitors. Our websites have experienced fluctuations in search result rankings in the past, and we anticipate fluctuations in the future.
The escrowed funds are deposited with various depository banks and may be in excess of the FDIC insurance limit. If any of our depository banks become unable to honor any portion of these deposits, impacted clients could seek to hold us responsible for such amounts. This could negatively impact our liquidity, results of operations and our reputation.
The escrowed funds are deposited with various depository banks and may be more than the FDIC insurance limit. If any of our depository banks become unable to honor any portion of these deposits, impacted clients could seek to hold us responsible for such amounts. This could negatively impact our liquidity, results of operations and our reputation.
We face the same risks with respect to subcontractors that might be engaged by our third-party vendors and partners or their subcontractors. The real estate brokerage business in our markets is extremely competitive. We compete with other multi-office independent real estate organizations and with franchise real estate organizations competing in local areas.
We face the same risks with respect to subcontractors that might be engaged by our third-party vendors and partners or their subcontractors. 15 Table of Contents The real estate brokerage business in our markets is extremely competitive. We compete with other multi-office independent real estate organizations and with franchise real estate organizations competing in local areas.
Section 404 of the Sarbanes-Oxley Act requires any company subject to the reporting requirements of the U.S. securities laws to conduct a comprehensive evaluation of its and its consolidated subsidiaries’ internal control over financial reporting.
Section 404 of the Sarbanes-Oxley Act requires any company subject to the reporting requirements of the U.S. securities laws to conduct a comprehensive evaluation of its and its consolidated subsidiaries’ internal control over financial 25 Table of Contents reporting.
We may fail to satisfy the expectations of investors, employees and other stakeholders or execute our initiatives as planned. We are periodically subject to claims, lawsuits, government investigations and other proceedings.
We may fail to satisfy the expectations of investors, employees and other stakeholders or execute our initiatives as planned. 24 Table of Contents We are periodically subject to claims, lawsuits, government investigations and other proceedings.
In 2023, approximately 65% of our closed sales occurred in New York, California, Connecticut, New Jersey and Massachusetts, and a migration of residents from these markets or a reduction in the attractiveness of these markets as a place to live could adversely impact demand for our products and services.
In 2024, approximately 63% of our closed sales occurred in New York, California, Connecticut, New Jersey and Massachusetts, and a migration of residents from these markets or a reduction in the attractiveness of these markets as a place to live could adversely impact demand for our products and services.
There is no assurance that those activities will maintain or enhance Douglas Elliman’s brand awareness. 12 Table of Contents Brand value can be severely damaged even by isolated incidents, particularly if the incidents receive considerable negative publicity or result in litigation.
There is no assurance that those activities will maintain or enhance Douglas Elliman’s brand awareness. Brand value can be severely damaged even by isolated incidents, particularly if the incidents receive considerable negative publicity or result in litigation.
Federal Income Tax Consequences of the Distribution.” 23 Table of Contents We may have a significant indemnity obligation to Vector Group if the Distribution is treated as a taxable transaction.
Federal Income Tax Consequences of the Distribution.” We may have a significant indemnity obligation to Vector Group if the Distribution is treated as a taxable transaction.
We believe these higher interest rates also reduced home inventory because many sellers considering a move faced higher monthly payment costs because of moving. Consequently, both of these trends resulted in a decline of transaction volume from 2021 to 2022 to 2023 and, if these trends continue, could eventually result in lower home prices.
We believe these higher interest rates also reduced home inventory because many sellers considering a move faced higher monthly payment costs because of moving. Consequently, both of these trends resulted in a decline of transaction volume since 2021 and, if these trends continue, could eventually result in lower home prices.
Each of the risks and uncertainties described below could lead to events or circumstances that have a material adverse effect on the business, results of operations, cash flows, financial condition or equity of us or one or more of our subsidiaries, which in turn could negatively affect the value of our common stock.
Each of the risks and uncertainties described below could lead to events or circumstances that have a material adverse effect on the business, results of operations, cash flows, prospects, financial condition of us, which in turn could negatively affect the value of our common stock.
Our business significantly depends on sales transactions for residential property in the New York metropolitan area, and we derived approximately 50% of our revenues in 2023, 52% of our revenues in 2022 and 55% of our revenues in 2021 from the New York metropolitan area.
Our business significantly depends on sales transactions for residential property in the New York metropolitan area, and we derived approximately 48% of our revenues in 2024, 50% of our revenues in 2023 and 52% of our revenues in 2022 from the New York metropolitan area.
Goodwill and indefinite-lived intangible asset impairment charges may adversely affect our operating results and financial condition. We have a substantial amount of goodwill and other intangible assets on our balance sheet. As of December 31, 2023, we had approximately $32.2 million of goodwill and $73.0 million of trademarks and other intangible assets related to Douglas Elliman.
Goodwill and indefinite-lived intangible asset impairment charges may adversely affect our operating results and financial condition. We have a substantial amount of goodwill and other intangible assets on our balance sheet. As of December 31, 2024 , we had approximately $32.2 million of goodwill and $72.3 million of trademarks and other intangible assets related to Douglas Elliman.
Vector Group provides Douglas Elliman with certain business services that were performed by Vector Group prior to the Distribution, such as information technology, accounts payable, payroll, tax, certain legal and accounting functions, human resources, insurance and risk management, government affairs, investor relations, corporate communications, benefit plan administration and reporting, and internal audit functions as well as certain marketing functions.
From December 30, 2021 to December 20, 2024, Vector Group provided Douglas Elliman with certain business services that were performed by Vector Group prior to the Distribution, such as information technology, accounts payable, payroll, tax, certain legal and accounting functions, human resources, insurance and risk management, government affairs, investor relations, corporate communications, benefit plan administration and reporting, and internal audit functions as well as certain marketing functions.
These services include the collection and storage of certain personal information regarding employees and/or customers as well as information regarding Douglas Elliman, Vector Group and our counterparties. We pay Vector Group $350,000 per month for these services as well as office space and secretarial and administrative services provided to members of our management team.
These services included the collection and storage of certain personal information regarding employees and/or customers as well as information regarding Douglas Elliman, Vector Group and our counterparties. Prior to December 21, 2024, we paid Vector Group $350,000 per month for these services as well as office space and secretarial and administrative services provided to members of our management team.
Litigation , investigations, claims and regulatory proceedings against other participants in the residential real estate or relocation industry may impact us when the rulings or settlements in those cases cover practices common to the broader industry and which may generate litigation.
Adverse decisions in litigation or regulatory actions against companies unrelated to us could impact our business practices. Litigation , investigations, claims and regulatory proceedings against other participants in the residential real estate or relocation industry may impact us when the rulings or settlements in those cases cover practices common to the broader industry and which may generate litigation.
Following the federal jury decision in the Sitzer/Burnett case on October 31, 2023, several additional putative class action lawsuits were filed against the NAR and additional real estate brokerage firms, including Douglas Elliman or its subsidiaries, alleging anticompetitive conduct similar to that in the Sitzer/Burnett case in violation of federal and state antitrust laws, consumer protection claims and allegations of unjust enrichment.
Following the federal jury decision in the Sitzer/Burnett case on October 31, 2023, several additional putative class action lawsuits were filed against NAR and additional real estate brokerage firms, including the Company, alleging anticompetitive conduct similar to that in the Sitzer/Burnett case in violation of federal and state antitrust laws, consumer protection claims and other state law claims.
Through our brokerages, we participate in MLS and are a member of the NAR and state real estate associations and, accordingly, are subject to each group’s rules, policies, data licenses, and terms of service. The rules of each MLS to which we belong can vary widely and are complex.
Through its brokerages, the Company participates in MLSs and is a member of NAR and state real estate associations and, accordingly, is subject to each group’s rules, policies, data licenses, and terms of service. The rules of each MLS to which the Company belongs can vary widely and are complex.
If the carrying value of intangible assets or of goodwill were to exceed its fair value, the asset would be written down to its fair value, with the impairment loss recognized as a non-cash charge in our consolidated statement of operations. Changes in our future outlook of the Douglas Elliman Realty, LLC reporting unit could result in an impairment loss.
If the carrying value of intangible assets or of goodwill were to exceed its fair value, the asset would be written down to its fair value, with the impairment loss recognized as a non-cash charge in our consolidated statement of operations.
Global cybersecurity threats and incidents can range from uncoordinated individual attempts that gain unauthorized access to information technology systems, both internally and externally, to sophisticated and targeted measures, known as advanced persistent threats, directed at us and our affiliated agents.
Global cybersecurity threats and incidents can range from uncoordinated individual attempts that gain unauthorized access to information technology systems, both internally and externally, to sophisticated and targeted measures, known as advanced persistent threats, directed at us and our affiliated agents. The use of emerging artificial intelligence technologies (“AI”), which are becoming increasingly sophisticated, may further intensify cybersecurity threats and incidents.
Defending or enforcing our trademark rights, branding practices and other intellectual property, and seeking an 16 Table of Contents injunction and/or compensation for misappropriation of confidential information, could result in the expenditure of significant resources and divert the attention of management.
Even where we have effectively secured statutory protection for our trademarks and other intellectual property, our competitors may misappropriate our intellectual property. Defending or enforcing our trademark rights, branding practices and other intellectual property, and seeking an injunction and/or compensation for misappropriation of confidential information, could result in the expenditure of significant resources and divert the attention of management.
These proceedings could also result in harm to our reputation and brand, sanctions, consent decrees, injunctions or other orders requiring a change in our business practices. Any of these consequences could adversely affect our business, financial condition and results of operations.
It is possible that a resolution of one or more such proceedings could result in substantial damages, settlement costs, fines and penalties that could adversely affect our business, financial condition and results of operations. These proceedings could also result in harm to our reputation and brand, sanctions, consent decrees, injunctions or other orders requiring a change in our business practices.
Because of such variability, our historical performance, including from recent quarters or years, may not be a meaningful indicator of future performance and period-to-period comparisons also may not be meaningful. We are a holding company and depend on cash payments from our subsidiaries to pay dividends on our common stock.
Because of such variability, our historical performance, including from recent quarters or years, may not be a meaningful indicator of future performance and period-to-period comparisons also may not be meaningful.
Changes in these rules or their interpretations or changes in underlying assumptions, estimates or judgments made by management could significantly change our reported results. Risks Relating to the Distribution Following the Distribution, we are materially dependent on Vector Group’s performance under various agreements.
Changes in these rules or their interpretations or changes in underlying assumptions, estimates or judgments made by management could significantly change our reported results. Risks Relating to the Distribution Prior to December 2024, Douglas Elliman was materially dependent on Vector Group’s performance under various agreements. Subsequent to the termination of such agreements, Douglas Elliman has operated as a standalone company.
Accordingly, our financial results depend upon the operational and financial success of our brokerage offices and our agents. As mentioned above, there is significant competition among brokerage firms for the services of high producing agents and we may be unable to recruit and retain agents. Contractual obligations related to confidentiality and noncompetition may be ineffective or unenforceable against departing employees.
Our real estate brokerage offices generate revenue in the form of commissions and service fees. Accordingly, our financial results depend upon the operational and financial success of our brokerage offices and our agents. As mentioned above, there is significant competition among brokerage firms for the services of high producing agents and we may be unable to recruit and retain agents.
The ability of our brokerage offices to retain agents is generally subject to numerous factors, including the sales commissions they receive, advertising support and perception of brand value. Our real estate brokerage business depends on the success of our agents. Our real estate brokerage offices generate revenue in the form of commissions and service fees.
The ability of our brokerage offices to retain agents is generally subject to numerous factors, including the sales commissions they receive, advertising support and perception of brand value. Failure to compete effectively could have a material adverse effect on our business, financial condition and results of operations. Our real estate brokerage business depends on the success of our agents.
Such companies typically have obtained capital in the form of debt and/or equity to expand rapidly, reorganize operations, acquire other businesses, or develop new products and markets.
Such companies typically have obtained capital in the form of debt and/or equity to expand rapidly, reorganize operations, acquire other businesses, or develop new products and markets. These activities involve a significant amount of change in a company and could give rise to significant problems in sales, manufacturing, and general management of these activities.
In the quarterly period ended December 31, 2023, we utilized third-party valuation specialists to prepare a quantitative assessment of goodwill and trademark intangible assets related to Douglas Elliman, based on the current market conditions in the residential real estate brokerage industry.
In the three months ended September 30, 2024, we utilized third-party valuation specialists to prepare a quantitative assessment of the Company’s goodwill and trademark intangible assets, based on the current market conditions in the residential real estate brokerage industry which did not result in impairment charges related to its goodwill or trademark for the year ended December 31, 2024.
Enforceability of the non-compete agreements that we have in place is not guaranteed, and contractual restrictions could be breached without discovery or adequate remedies. 13 Table of Contents On July 9, 2021, President Biden signed an executive order encouraging the Federal Trade Commission (“FTC”) to curtail unfair use of non-compete agreements and other agreements that may unfairly limit worker mobility.
On July 9, 2021, President Biden signed an executive order encouraging the Federal Trade Commission (“FTC”) to curtail unfair use of non-compete agreements and other agreements that may unfairly limit worker mobility.
These activities involve a significant amount of change in a company and could give rise to significant problems in sales, manufacturing, and general management of these activities. 18 Table of Contents We may engage in business activities that could result in us holding investment interests in entities which could subject us to regulation under the Investment Company Act of 1940.
We may engage in business activities that could result in us holding investment interests in entities which could subject us to regulation under the Investment Company Act of 1940.
Our receipt of cash payments, as dividends or otherwise, from our subsidiaries is an important source of our liquidity and capital resources.
In addition to our own cash resources, our ability to pay dividends on our common stock depends on the ability of our subsidiaries to make cash available to us. Our receipt of cash payments, as dividends or otherwise, from our subsidiaries is an important source of our liquidity and capital resources.
Regulation of Douglas Elliman as an investment company would significantly impair our business plan and operations. Risks Relating to Our Structure and Other Business Risks Our quarterly results and other operating metrics may fluctuate from quarter to quarter, which makes these metrics difficult to predict.
Any of these factors could adversely affect our business, financial condition, and results of operations. Risks Relating to Our Structure and Other Business Risks Our quarterly results and other operating metrics may fluctuate from quarter to quarter, which makes these metrics difficult to predict.
Furthermore, under certain circumstances, we have contractual and other legal obligations to indemnify and to incur legal expenses on behalf of our business and commercial partners and current and former directors, officers and employees. Adverse decisions in litigation or regulatory actions against companies unrelated to us could impact our business practices.
Any of these consequences could adversely affect our business, financial condition and results of operations. Furthermore, under certain circumstances, we have contractual and other legal obligations to indemnify and to incur legal expenses on behalf of our business and commercial partners and current and former directors, officers and employees.
It is unclear if and when a final rule will become effective and whether it would be subject to legal challenges. In addition, the New York state legislature passed legislation in 2023 that would have prohibited most non-compete agreements between employers and workers in New York State, although it was not ultimately enacted.
However, the FTC may appeal the discussion and the outcome of the FTC ruling is uncertain. In addition, the New York state legislature passed legislation in 2023 that would have prohibited most non-compete agreements between employers and workers in New York State, although it was not ultimately enacted.
Significant agent reclassification determinations in the absence of available exemptions from minimum wage or overtime laws, including damages and penalties for prior periods (if assessed), could be disruptive to our business or constrain our operations in certain jurisdictions. 14 Table of Contents We may not be able to maintain or establish relationships with multiple listing services (“MLSs”) and third-party listing services, which could limit the information we are able to provide to our agents and clients.
Significant agent reclassification determinations in the absence of available exemptions from minimum wage or overtime laws, including damages and penalties for prior periods (if assessed), could be disruptive to or otherwise have an adverse effect on our business or constrain our operations in certain jurisdictions.
Our ability to attract agents and to appeal to clients depends upon providing a robust number of listings. To provide these listings, we maintain relationships with multiple listing services and other third-party listing providers and aggregators, as well as our agents themselves to include listing data in our services.
To provide these listings, we maintain relationships with multiple listing services and other third-party listing providers and aggregators, as well as our agents themselves to include listing data in our services. Certain of our agreements with real estate listing providers are short-term agreements that may be terminated with limited notice.
In addition, we could also be subject to litigation and regulatory claims arising out of their performance of brokerage services, which if adversely determined, could result in substantial financial or legal penalties. There may be adverse financial and operational consequences to us if independent real estate agents are reclassified as employees.
In addition, we have previously been subject to and could continue to be subject to public scrutiny as well as litigation and regulatory claims arising out of our agents’ performance of brokerage services or other conduct, which if adversely determined, could result in substantial financial or legal penalties.
We entered into various agreements with Vector Group related to the Distribution, including a Distribution Agreement, a Tax Disaffiliation Agreement, a Transition Services Agreement, an Employee Matters Agreement and Aviation Agreements. 22 Table of Contents These agreements included the allocation of employee benefits, taxes and certain other liabilities and obligations attributable to periods prior to, at and after the Distribution.
These agreements included the allocation of employee benefits, taxes and certain other liabilities and obligations attributable to periods prior to, at and after the Distribution.
The results of any such claims, lawsuits, arbitration proceedings, government investigations or other legal or regulatory proceedings cannot be predicted with certainty. Any claims against us or investigations involving us, whether meritorious or not, could be time-consuming, result in significant defense and compliance costs, be harmful to our reputation, require significant management attention and divert significant resources.
Any claims against us or investigations involving us, whether meritorious or not, could be time-consuming, result in significant defense and compliance costs, be harmful to our reputation, require significant management attention and divert significant resources. Determining reserves for our pending litigation is a complex and fact-intensive process that requires significant subjective judgment and speculation.
Our operations are dependent on the efforts, abilities and experience of our employees, and we compete for their services. We have contracts with certain employees that include provisions preventing them from competing with us both during and after the term of our employment contracts with them.
We have contracts with certain employees that include provisions preventing them from competing with us both during and after the term of our employment contracts with them. Enforceability of the non-compete agreements that we have in place is not guaranteed, and contractual restrictions could be breached without discovery or adequate remedies.
If we are required to indemnify Vector Group under the circumstances set forth in the Tax Disaffiliation Agreement, we may be subject to substantial liabilities. The tax rules applicable to the Distribution may restrict us from engaging in certain corporate transactions or from raising equity capital beyond certain thresholds for a period of time after the Distribution.
If we are required to indemnify Vector Group under the circumstances set forth in the Tax Disaffiliation Agreement, we may be subject to substantial liabilities. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Douglas Elliman may become involved in additional legal proceedings concerning the same or similar claims. We are unable to reasonably estimate the financial impact of these matters.
In addition, we may become involved in additional legal proceedings concerning the same or similar claims and currently are a defendant in the buyer-side class action Lutz lawsuit, pending in the United States District Court for the Southern District of Florida, No. 4:24-cv-10040 (KMM). We are unable to reasonably estimate the financial impact of any remaining matters.
In January 2023, the FTC proposed a rule that, if enacted, would prohibit employers from entering into non-compete clauses with workers and require employers to rescind existing non-compete clauses. The FTC is expected to vote on a final rule in April 2024.
In April 2024, the FTC enacted a rule that prohibited employers from entering non-compete clauses with workers and require employers to rescind existing non-compete clauses. Shortly after enactment, the rule was subject to various legal challenges and the rule was set aside by the U.S. District Court for the Northern District of Texas.
Any such determination could result in industry investigations, legislative or regulatory action, private litigation or other actions, any of which could have the potential to disrupt our business. 15 Table of Contents On July 1, 2021, the DOJ announced its withdrawal from a settlement agreement reached during the prior adminis tration with the NAR in relation to claims of anticompetitive behavior with respect to commissions received by buyers’ agents from sellers’ agents.
Any such determination could result in industry investigations, legislative or regulatory action, private litigation or other actions, any of which could have the potential to disrupt the Company’s business.
While the quantitative assessments did not result in impairment charges to goodwill or to the trademark intangible assets as of December 31, 2023, we could experience an impairment of goodwill and other intangible assets if current market conditions continue to deteriorate. Such a situation could then result in an impairment loss.
If we fail to achieve the financial projections used in the quantitative assessments of fair value and current market conditions deteriorate, impairment charges could result in future periods, and such impairment charges could be material.
Removed
We are impacted by the performance of the real estate markets in the New York metropolitan area and there may be a reduction in the attractiveness of those markets as well as the other markets in which we operate.
Added
Lack of available credit or lack of confidence in the financial sector could adversely impact the real estate market.
Removed
Certain of our agreements with real estate listing providers are short-term agreements that may be terminated with limited notice.
Added
Contractual obligations related to confidentiality and noncompetition may be ineffective or unenforceable against departing employees. Our operations are dependent on the efforts, abilities and experience of our employees, and we compete for their services.
Removed
The settlement previously required the NAR to adopt certain rule changes, such as increased disclosure of commission offers from sellers’ agents to buyers’ agents. In January 2023, a federal court ruled that the DOJ must uphold the settlement agreement. The DOJ appealed the district court’s January 2023 ruling.
Added
There may be adverse financial and operational consequences to us if independent real estate agents are reclassified as employees.
Removed
The appellate court heard argument on the appeal on December 1, 2023, but has not yet issued a decision.
Added
We may not be able to maintain or establish relationships with multiple listing services (“MLSs”) and third-party listing services, which could limit the information we are able to provide to our agents and clients. Our ability to attract agents and appeal to clients depends upon providing and maintaining a robust number of listings.
Removed
The withdrawal of the DOJ from this settlement and the executive order signed by President Biden on July 9, 2021, which, among other things, directs the FTC to consider additional rule making pertaining to the real estate industry, indicates increased regulatory scrutiny of the real estate industry.
Added
For example, changes in our future outlook of the Douglas Elliman Realty, LLC reporting unit could result in an impairment loss.
Removed
Certain of the defendants have indicated that they intend to appeal the judgment in the Sitzer/Burnett case and final resolution is not expected in the near term. Douglas Elliman is not a defendant in the Sitzer/Burnett case.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+1 added−0 removed15 unchanged
Biggest changeOur CTO, who has more than 25 years of information security and cybersecurity experience, manages cybersecurity at the corporate segment and oversees a team of dedicated cybersecurity personnel employed in our real estate brokerage segment.
Biggest changeOur CTO manages cybersecurity at the corporate segment and oversees a team of dedicated cybersecurity personnel employed in our real estate brokerage segment, including a Chief Information Security Officer.
These processes and procedures include, among others, a diligence review conducted by our information technology team of substantially all of our external business partners and a focused review of any such third parties’ cybersecurity audit attestations, such as Service Organization Controls, NIST 800 alignments, ISO certifications, PCI 25 Table of Contents DSS compliance or other recognized external reviews.
These processes and procedures include, among others, a diligence review conducted by our information technology team of substantially all of our external business partners and a focused review of any such third parties’ cybersecurity audit attestations, such as Service Organization Controls, NIST 800 alignments, ISO certifications, PCI DSS compliance or other recognized external reviews.
Pursuant to this response plan, if an incident occurs, a multi-disciplinary team is assembled that includes our CTO and General Counsel and, if appropriate, our COO and CFO, which in turn may leverage the expertise of third-party consultants, external legal counsel and other resources.
Pursuant to this response plan, if an incident occurs, a multi-disciplinary team is assembled that includes our CTO and the General Counsel of Douglas Elliman Realty LLC and, if appropriate, the CFO of Douglas Elliman Realty LLC, which in turn may leverage the expertise of third-party consultants, external legal counsel and other resources.
In addition to regular reporting, we have procedures by which potential cybersecurity incidents are reported in a timely manner to the Chief Technology Officer, who then notifies the Chief Operating Officer and General Counsel of cybersecurity incidents and they collectively determine if a specific incident warrants escalation to the Audit Committee and the Board of Directors.
In addition to regular reporting, we have procedures by which potential cybersecurity incidents are reported in a timely manner to the Chief Technology Officer (CTO), who then notifies the Chief Executive Officer of cy bersecurity incidents and they collectively determine if a specific incident warrants escalation to the Audit Committee and the Board of Directors.
Added
The 27 Table of Contents acting CTO is our Executive Vice President, Chief Financial Officer, Treasurer, and Secretary, who took over responsibilities in October 2024 upon the departure of the Company’s prior CTO.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed0 unchanged
Biggest changeAs of December 31, 2023, the properties leased by Douglas Elliman are as follows: Type Number of Offices Location Owned or Leased Approximate Total Square Footage Offices 26 New York City, NY Leased 308,000 Offices 37 Long Island, NY Leased 121,000 Offices 23 Florida Leased 60,000 Offices 4 Westchester County, NY Leased 7,000 Offices 14 California Leased 82,000 Offices 27 Other Leased 57,300
Biggest changeAs of December 31, 2024, the properties leased by Douglas Elliman are as follows: Type Number of Offices Location Owned or Leased Approximate Total Square Footage Offices 22 New York City, NY Leased 230,000 Offices 35 Long Island, NY Leased 118,000 Offices 26 Florida Leased 75,000 Offices 5 Westchester County, NY Leased 8,000 Offices 11 California Leased 73,000 Offices 22 Other Leased 51,600
ITEM 2. PROPERTIES Our principal executive offices are located in Miami, Florida. Douglas Elliman leases 131 offices and its leases expire at various times between 2024 and 2033.
ITEM 2. PROPERTIES Our principal executive offices are located in Miami, Florida. 28 Table of Contents As of December 31, 2024, Douglas Elliman leases 121 offices and its leases expire at various times between 2025 and 2033.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS Reference is made to Note 13 to our combined consolidated financial statements included elsewhere in this report which is incorporated by reference and contains a general description of certain legal proceedings to which we, or our subsidiaries, are a party. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 26 Table of Contents PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS Reference is made to Note 14 to our consolidated financial statements included elsewhere in this report which is incorporated by reference and contains a general description of certain legal proceedings to which we, including our subsidiaries, are a party. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 29 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

14 edited+11 added−18 removed2 unchanged
Biggest changeThe chart does not reflect the Company’s forecast of future financial performance. 12/30/21 12/31/21 12/31/22 12/31/23 Douglas Elliman Inc. 100 95 35 27 S&P 500 100 100 82 103 S&P 600 100 100 84 97 Peer Group Index 100 100 41 67 Unregistered Sales of Equity Securities and Use of Proceeds No securities of ours which were not registered under the Securities Act of 1933 were issued and sold by us during the three months ended December 31, 2023. 28 Table of Contents Issuer Purchase of Equity Securities Our purchases of our common stock during the three months ended December 31, 2023 were as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1 to October 31, 2023 — $ — — — November 1 to November 30, 2023 — — — — December 1 to December 31, 2023 781,907 2.53 (1) — — Total 781,907 $ 2.53 — — (1) Represents withholdings of shares as payment of payroll tax liabilities incident to the vesting of various employees’ shares of restricted stock.
Biggest changeThe chart does not reflect the Company’s forecast of future financial performance. 12/30/21 12/31/21 12/31/22 12/31/23 12/31/24 Douglas Elliman Inc. 100 95 35 27 15 S&P 500 100 100 82 103 129 S&P 600 100 100 84 97 106 Peer Group Index 100 100 41 67 72 30 Table of Contents Unregistered Sales of Equity Securities and Use of Proceeds No securities of ours which were not registered under the Securities Act of 1933 were issued and sold by us during the three months ended December 31, 2024.
(ZG), loanDepot, Inc. (LDI), Opendoor Technologies Inc. (OPEN), Colliers International Group Inc. (CIGI), eXp World Holdings, Inc. (EXPI), Stewart Information Services Corporation (STC), Newmark Group, Inc. (NMRK), Redfin Corporation (RFIN), Offerpad Solutions Inc. (OPAD), Radian Group Inc. (RDN), Walker & Dunlop Inc. (WD), Lending Tree, Inc. (TREE), Marcus & Millichap, Inc. (MMI), Doma Holdings Inc. and RE/MAX Holdings, Inc. (RMAX).
(ZG), loanDepot, Inc. (LDI), Opendoor Technologies Inc. (OPEN), Colliers International Group Inc. (CIGI), eXp World Holdings, Inc. (EXPI), Stewart Information Services Corporation (STC), Newmark Group, Inc. (NMRK), Redfin Corporation (RFIN), Offerpad Solutions Inc. (OPAD), Radian Group Inc. (RDN), Walker & Dunlop Inc. (WD), Lending Tree, Inc. (TREE), Marcus & Millichap, Inc. (MMI), and RE/MAX Holdings, Inc. (RMAX).
We selected our Peer Group Index based on the peer group used by our compensation and human capital committee, as recommended by its outside consultant, which consists of 17 publicly traded, national and regional companies conducting business in the real estate and financial services industry.
We selected our Peer Group Index based on the peer group used by our compensation and human capital committee, as recommended by its outside consultant, which consists of 16 publicly traded, national and regional companies conducting business in the real estate and financial services industry.
He joined Vector Group in September 2020 as Vice President Innovation after serving as Vice President of Enterprise Innovation at Ladenburg Thalmann Financial Services Inc. from January 2018 to February 2020, after serving as a full-time consultant to Ladenburg Thalmann since October 2015. Mr.
Sachar serves as Vice President Innovation and Managing Director of New Valley Ventures. He joined Vector Group in September 2020 as Vice President Innovation after serving as Vice President of Enterprise Innovation at Ladenburg Thalmann Financial Services Inc. from January 2018 to February 2020, after serving as a full-time consultant to Ladenburg Thalmann since October 2015. Mr.
The shares were immediately canceled. 29 Table of Contents EXECUTIVE OFFICERS OF THE REGISTRANT The table below, together with the accompanying text, presents certain information regarding all our current executive officers as of March 8, 2024.
The shares were immediately canceled. 31 Table of Contents EXECUTIVE OFFICERS OF THE REGISTRANT The table below, together with the accompanying text, presents certain information regarding all our current executive officers as of March 17, 2025.
Each of the executive officers serves until the election and qualification of such individual’s successor or until such individual’s death, resignation or removal by the Board of Directors. Name Age Position Year Individual Became an Executive Officer Howard M. Lorber 75 Chairman, President and Chief Executive Officer 2021 Richard J.
Each of the executive officers serves until the election and qualification of such individual’s successor or until such individual’s death, resignation or removal by the Board of Directors. Name Age Position Year Individual Became an Executive Officer Michael S. Liebowitz 56 President and Chief Executive Officer 2024 J.
Larkin is known as a trusted media source for trends in luxury living and market information and analysis. He has served as Executive Vice President and Chief Communications Officer of Douglas Elliman since September 2020, after serving as Vice President of Public Relations from December 2016 to September 2020. Prior to beginning his tenure at Douglas Elliman, Mr.
He has served as Executive Vice President and Chief Communications Officer of Douglas Elliman since September 2020, after serving as Vice President of Public Relations from December 2016 to September 2020. Prior to beginning his tenure at Douglas Elliman, Mr. Larkin served as a Director of Relevance International, an international public relations firm, from February 2015 to December 2016. Mr.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed and traded on the New York Stock Exchange under the symbol “DOUG.” At February 29, 2024, there were approximately 1,176 holders of record of our common stock. 27 Table of Contents Performance Graph The following graph compares the cumulative total annual return of our Common Stock, the S&P 500 Index, the S&P Small Cap 600 Index, and our Peer Group Index by assuming that $100 was invested in each investment as of December 30, 2021, which represents the day our common stock began trading on the NYSE, and that all cash dividends and distributions were reinvested.
Performance Graph The following graph compares the cumulative total annual return of our Common Stock, the S&P 500 Index, the S&P Small Cap 600 Index, and our Peer Group Index by assuming that $100 was invested in each investment as of December 30, 2021, which represents the day our common stock began trading on the NYSE, and that all cash dividends and distributions were reinvested.
Durkin 61 President and Chief Executive Officer, Douglas Elliman Realty, LLC 2021 Stephen T. Larkin 54 Vice President of Communications 2021 Daniel A. Sachar 48 Vice President Innovation and Managing Director of New Valley Ventures LLC 2021 Lisa M. Seligman 47 Vice President of Human Resources 2023 Howard M.
Bryant Kirkland III 59 Executive Vice President, Secretary, Treasurer and Chief Financial Officer 2021 Stephen T. Larkin 55 Vice President of Communications 2021 Daniel A. Sachar 49 Vice President Innovation and Managing Director of New Valley Ventures LLC 2021 Lisa M. Seligman 48 Vice President of Human Resources 2023 Michael S. Liebowitz serves as our President and Chief Executive Officer.
Larkin served as a Director of Relevance International, an international public relations firm, from February 2015 to December 2016. Mr. Larkin previously served as a principal of Larkin Public Relations from October 2005 to February 2013 and a Vice President of The Corcoran Group from August 2003 to October 2005. Mr.
Larkin previously served as a principal of Larkin Public Relations from October 2005 to February 2013 and a Vice President of The Corcoran Group from August 2003 to October 2005. Mr. Larkin graduated from Wheaton College in Massachusetts and received a Master of Science from the Columbia University Graduate School of Journalism. Daniel A.
Mr. Sachar received a Bachelor of Arts degree from Swarthmore College and an MBA from Columbia Business School. Lisa M. Seligman serves as Vice President of Human Resources. Ms. Seligman’s experience includes more than 20 years in Human Resources leadership roles at a diverse group of companies with luxury brand names, which include Dow Jones, Chanel, Shiseido and Tiffany.
Seligman’s experience includes more than 20 years in Human Resources leadership roles at a diverse group of companies with luxury brand names, which include Dow Jones, Chanel, Shiseido and Tiffany. Most recently, she has served as Vice President 32 Table of Contents and Global Head of HR at Arcade Beauty from 2015 to 2022.
Kirkland has served as Chairman of the Board of Directors, President and Chief Executive Officer of Multi Soft II, Inc. and Multi Solutions II, Inc. since July 2012. Marc N. Bell is our Senior Vice President, General Counsel and Secretary.
Kirkland also served as Chairman of the Board of Directors, President and Chief Executive Officer of Multi Solutions II, Inc. and Multi-Soft II, Inc., which were subsidiaries of Vector Group, from 2012 to October 2024.
Most recently, she has served as Vice President and Global Head of HR at Arcade Beauty, a private equity-owned company engaged in the manufacture of sampling materials for the beauty industry. 31 Table of Contents ITEM 6. RESERVED Reserved.
Arcade Beauty, a private equity-owned company engaged in the manufacture of sampling materials for the beauty industry. Ms. Seligman received a Bachelor of Arts degree in Communications, with an emphasis on Human Resources, from University of Hartford. 33 Table of Contents ITEM 6. RESERVED Reserved.
Bryant Kirkland III is our Senior Vice President and Chief Financial Officer and was our Treasurer from 2021 to January 2024. He has served as Chief Financial Officer and Treasurer of Vector Group since April 2006 and as Vector Group’s Senior Vice President since May 2016. Mr.
J. Bryant Kirkland III is our Executive Vice President, Secretary, Treasurer and Chief Financial Officer. Mr.
Removed
Lampen 70 Executive Vice President and Chief Operating Officer 2021 J. Bryant Kirkland III 58 Senior Vice President and Chief Financial Officer 2021 Marc N. Bell 63 Senior Vice President, General Counsel and Secretary 2021 J. David Ballard 56 Senior Vice President, Enterprise Efficiency and Chief Technology Officer 2021 Scott J.
Added
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock i s listed and traded on the New York Stock Exchange under the symbol “DOUG.” As of February 28, 2025, there were approximately 1,098 ho lders of record of our common stock.
Removed
Lorber is our Chairman, President and Chief Executive Officer and is Executive Chairman of Douglas Elliman Realty, LLC. He has served as President and Chief Executive Officer of Vector Group since January 2006, and, as a director of Vector Group since January 2001. From November 1994 to December 2005, Mr.
Added
Issuer Purchase of Equity Securities Our purchases of our common stock during the three months ended December 31, 2024 were as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1 to October 31, 2024 115,963 $ 1.86 (1) — — November 1 to November 30, 2024 39,350 1.86 (1) — — December 1 to December 31, 2024 523,551 2.01 (1) — — Total 678,864 $ 1.91 — — (1) Represents withholdings of shares as payment of payroll tax liabilities incident to the vesting of various employees’ shares of restricted stock.
Removed
Lorber served as President and Chief Operating Officer of New Valley Corporation, where he also served as a director. New Valley was merged into Vector Group in December 2005. Mr. Lorber has served as Chairman of the Board of Directors of Nathan’s Famous, Inc.
Added
Mr. Liebowitz is an entrepreneur, private investor, and seasoned business executive with extensive experience founding, acquiring, and monetizing businesses in the insurance and financial industries. In the past 25 years, Mr. Liebowitz has acquired or been a founder of companies, including Harbor Group Consulting LLC, National Financial Partners Corp. (NYSE: NFP), Innova Risk Management, and High Street Valuations.
Removed
(NASDAQ: NATH), a chain of fast-food restaurants, since 1987 and Chief Executive Officer from November 1993 to December 2006; and, since July 2015, a director of Clipper Realty, Inc. (NYSE: CLPR), a real estate investment trust. Mr.
Added
He served as Chairman and Chief Executive Officer of Nocopi Technologies Inc.
Removed
Lorber was a member of the Board of Directors of Morgans Hotel Group Co. from March 2015 until November 2016, and Chairman from May 2015 to November 2016 and was Chairman of the Board of Ladenburg Thalmann Financial Services from May 2001 to July 2006 and Vice Chairman from July 2006 to February 2020.
Added
(OTC QB: NNUP) from October 2022 to February 2025 as well as President and Chief Executive Officer of the Harbor Group Division of Alliant (and Managing Director and Executive Vice President of Alliant) and High Street Valuations until 2023 and Harbor and Innova until 2018 and 2019, respectively, when they were acquired by Alliant. Mr.
Removed
He is also a trustee of Long Island University. Richard J. Lampen is our Executive Vice President and Chief Operating Officer. He was appointed as a director of Vector Group as well as its Chief Operating Officer on January 14, 2021 and has served as Vector Group’s Executive Vice President since 1995. From October 1995 to December 2005, Mr.
Added
Liebowitz also served on the boards of Ladenburg Thalmann Financial Services Inc. (NYSE American: LTS) and The Hilb Group. He has also acted as an advisor to many of the largest financial services companies around the globe on their complex insurance matters within their investment banking/M&A groups. Mr. Liebowitz graduated from CW Post College-LI University with a B.S. in Finance.
Removed
Lampen served as the Executive Vice President and General Counsel of New Valley, where he also served as a director. From September 2006 to February 2020, he served as President and Chief Executive Officer as well as a director of Ladenburg Thalmann Financial Services. Mr.
Added
Kirkland also served as Chief Financial Officer of Vector Group from April 2006 until October 2024, when it was acquired by JT Group Inc., after serving as Chief Financial Officer of New Valley Corporation from 1998 until December 2005, when it was acquired by Vector Group. Mr.
Removed
Lampen also served as Chairman of Ladenburg Thalmann Financial Services from September 2018 to February 2020. From October 2008 to October 2019, Mr. Lampen served as President and Chief Executive Officer as well as a director of Castle Brands Inc. J.
Added
After joining a subsidiary of Vector Group in July 1992, he served in various financial capacities of Vector Group and its subsidiaries until October 2024 and was involved with all aspects of Vector Group’s tax-free distribution of Douglas Elliman, including the legal and income tax structuring, establishment of the transition agreements and initial corporate governance, SEC filings (including the carve-out financial statements), fairness opinions, investor relations and the initial listing of DOUG with NYSE.
Removed
Kirkland served as a Vice President of Vector Group from January 2001 to April 2016 and served as New Valley’s Vice President and Chief Financial Officer from January 1998 to December 2005. He has served since July 1992 in various financial capacities with us, Vector Group, Liggett and New Valley. Mr.
Added
Mr. Kirkland is licensed as a Certified Public Accountant in Florida, New York and North Carolina. Mr. Kirkland is also licensed as a Real Estate Broker in Florida. Mr. Kirkland received a Bachelor of Science in Business Administration from the University of North Carolina at Chapel Hill and received an MBA from Barry University. Stephen T.
Removed
He has served as Vector Group’s General Counsel and Secretary since May 1994 and Vector Group’s Senior Vice President since May 2016. Mr. Bell served as a Vice President of Vector Group from January 1998 to April 2016. From November 1994 to December 2005, Mr.
Added
Larkin serves as Vice President of Communications. With more than two decades of experience in the real estate industry, Mr. Larkin is known as a trusted media source for trends in luxury living and market information and analysis.
Removed
Bell served as Associate General Counsel and Secretary of New Valley and from February 1998 to December 2005, as a Vice President of New Valley. Mr. Bell previously served as Liggett’s General Counsel and currently serves as an officer, director or manager for many of Vector Group’s and New Valley’s subsidiaries. J.
Added
Mr. Sachar received a Bachelor of Arts degree from Swarthmore College and an MBA from Columbia Business School. Lisa M. Seligman serves as Vice President of Human Resources since joining Douglas Elliman in January 2023. Ms.
Removed
David Ballard is our Senior Vice President, Enterprise Efficiency and Chief Technology Officer. He has been Vector Group’s Senior Vice President, Enterprise Efficiency and Chief Technology Officer since July 2020 and, from February 2020 to July 2020, served as a consultant to Vector Group. Prior to joining Vector Group, Mr.
Removed
Ballard served as Senior Vice 30 Table of Contents President, Enterprise Services of Ladenburg Thalmann Financial Services Inc. from April 2019 to February 2020. Prior to joining Ladenburg, he served as President and Chief Operating Officer for Docupace Technologies, a leading digital operations technology provider in the wealth management space from March 2018 to April 2019. Mr.
Removed
Ballard was Executive Vice President and Chief Operating Officer at Cetera Financial Group from April 2015 to March 2018. Prior to his role at Cetera, Mr.
Removed
Ballard spent more than two decades working in executive and management positions at several firms in the independent financial advisory and asset management industries, including AIG Advisor Group, SunAmerica Mutual Funds and AIG Retirement Services. Scott J.
Removed
Durkin has served as President of Douglas Elliman since December 2017 and was named as Chief Executive Officer of Douglas Elliman Realty, LLC in August 2021, after serving as Chief Operating Officer since October 2016. His expertise in Douglas Elliman’s markets spans the past three decades.
Removed
He served as Executive Vice President of Douglas Elliman from January 2016 to October 2016. Prior to 2016, Mr. Durkin enjoyed a 26-year tenure at The Corcoran Group. Stephen T. Larkin serves as Vice President of Communications. With nearly two decades of experience in the real estate industry, Mr.
Removed
Larkin graduated from Wheaton College in Massachusetts and received a Master of Science from the Columbia University Graduate School of Journalism. Daniel A. Sachar serves as Vice President Innovation and Managing Director of New Valley Ventures.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

87 edited+60 added−34 removed52 unchanged
Biggest changeReconciliations of these non-GAAP measures have been provided in the table below. 34 Table of Contents Computation of Adjusted EBITDA attributed to Douglas Elliman Year ended December 31, 2023 2022 Net loss attributed to Douglas Elliman Inc. $ (42,552) $ (5,622) Interest income, net (5,813) (1,779) Income tax (benefit) expense (15,053) 6,503 Net loss attributed to non-controlling interest (614) (777) Depreciation and amortization 8,026 8,012 Stock-based compensation (a) 13,075 11,138 Equity in losses from equity method investments (b) 168 563 Restructuring 2,377 — Other, net (633) (3,429) Adjusted EBITDA (41,019) 14,609 Adjusted EBITDA attributed to non-controlling interest 326 342 Adjusted EBITDA attributed to Douglas Elliman $ (40,693) $ 14,951 Real estate brokerage segment Operating (loss) income $ (36,769) $ 21,993 Depreciation and amortization 8,026 8,012 Stock-based compensation 4,539 4,195 Restructuring 2,377 — Adjusted EBITDA (21,827) 34,200 Adjusted EBITDA attributed to non-controlling interest 326 342 Adjusted EBITDA attributed to Douglas Elliman $ (21,501) $ 34,542 Corporate and other segment Operating loss $ (27,728) $ (26,534) Stock-based compensation 8,536 6,943 Adjusted EBITDA attributed to Douglas Elliman $ (19,192) $ (19,591) Total adjusted EBITDA attributed to Douglas Elliman $ (40,693) $ 14,951 _____________________________ (a) Represents amortization of stock-based compensation. $4,539 is attributable to the Real estate brokerage segment and $8,536 is attributable to the Corporate and other segment.
Biggest changeReconciliations of these non-GAAP measures have been provided in the table below (in thousands). 36 Table of Contents Computation of Adjusted EBITDA attributed to Douglas Elliman Year ended December 31, 2024 2023 Net loss attributed to Douglas Elliman Inc. $ (76,316) $ (42,552) Interest expense 2,939 28 Interest income (5,533) (5,841) Income tax expense (benefit) 1,117 (15,053) Net loss attributed to non-controlling interest (686) (614) Depreciation and amortization 7,736 8,026 EBITDA (70,743) (56,006) Stock-based compensation (a) 6,574 13,075 Equity in (earnings) losses from equity method investments (b) (36) 168 Change in fair value of derivatives embedded within convertible debt 14,978 — Litigation and related settlement expenses (c) (d) 33,333 — Executive severance and separation expenses (e) 2,010 — Restructuring 1,041 2,377 Other, net (5,289) (633) Adjusted EBITDA (18,132) (41,019) Adjusted EBITDA attributed to non-controlling interest 349 326 Adjusted EBITDA attributed to Douglas Elliman $ (17,783) $ (40,693) _____________________________ (a) Represents amortization of stock-based compensation. $4,325 is attributable to the Real estate brokerage segment and $2,249 is attributable to the Corporate activities and other segment.
We are bringing innovative, technology driven PropTech solutions to Douglas Elliman by adopting new PropTech solutions for agents and their clients and also investing in select PropTech opportunities through our subsidiary, New Valley Ventures LLC. Our model is to source and use best-of-breed products and services that we believe will increase our efficiency.
We are bringing innovative, technology driven PropTech solutions to Douglas Elliman by adopting new PropTech solutions for agents and their clients and investing in select PropTech opportunities through our subsidiary, New Valley Ventures LLC. Our model is to source and use best-of-breed products and services that we believe will increase our efficiency.
As a result, during 2023, we have endeavored to adjust our cost structure to better fit our business, including through, among other things, reductions in personnel and incentive compensation expense, eliminating certain corporate sponsorship events, streamlining advertising expenditures and beginning a process of consolidating offices as leases expire.
As a result, during 2023 and 2024, we have endeavored to adjust our cost structure to better fit our business, including through, among other things, reductions in personnel and incentive compensation expense, eliminating certain corporate sponsorship events, streamlining advertising expenditures and beginning a process of consolidating offices as leases expire.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (All dollar amounts included herein are presented in thousands, except as otherwise noted) The following discussion should be read in conjunction with the combined consolidated financial statements and corresponding notes, elsewhere in this Form 10-K.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (All dollar amounts included herein are presented in thousands, except as otherwise noted) The following discussion should be read in conjunction with the consolidated financial statements and corresponding notes, elsewhere in this Form 10-K.
In addition to entering into business relationships with these PropTech companies, we are committed to creating over time a dynamic portfolio of PropTech companies by leveraging relationships to provide them access to our agents and their clients, as well as our knowledge and experience.
In addition to entering business relationships with these PropTech companies, we are committed to creating over time a dynamic portfolio of PropTech companies by leveraging relationships to provide them access to our agents and their clients, as well as our knowledge and experience.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission on March 16, 2023. Liquidity and Capital Resources.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission on March 16, 2023. Liquidity and Capital Resources.
Results of Operations The following discussion provides an assessment of our results of operations, capital resources and liquidity and should be read in conjunction with our combined consolidated financial statements and related notes included elsewhere in this Form 10-K.
Results of Operations The following discussion provides an assessment of our results of operations, capital resources and liquidity and should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Form 10-K.
More than a century later, the Douglas Elliman brand is still associated with service, luxury and forward thinking — our markets are primarily international finance and technology 32 Table of Contents hubs that are densely populated and offer housing inventory at premium price points.
More than a century later, the Douglas Elliman brand is still associated with service, luxury and forward thinking — our markets are primarily international finance and technology 34 Table of Contents hubs that are densely populated and offer housing inventory at premium price points.
Certain discussions of the changes in our results of operations and liquidity and capital resources from the year ended December 31, 2022 as compared to the year ended December 31, 2021 have been omitted from this Form 10-K and may be found in Item 7.
Certain discussions of the changes in our results of operations and liquidity and capital resources from the year ended December 31, 2023 as compared to the year ended December 31, 2022 have been omitted from this Form 10-K and may be found in Item 7.
This section provides a discussion of our financial condition and liquidity, an analysis of our cash flows for the years ended December 31, 2023 and 2022, as well as certain contractual obligations and off-balance sheet arrangements that existed at December 31, 2023.
This section provides a discussion of our financial condition and liquidity, an analysis of our cash flows for the years ended December 31, 2024 and 2023, as well as certain contractual obligations and off-balance sheet arrangements that existed at December 31, 2024.
Overview Douglas Elliman Inc. is a holding company and is engaged principally in two business segments: Real Estate Brokerage: the residential real estate brokerage services through our subsidiary Douglas Elliman Realty, which operates the largest residential brokerage company in the New York metropolitan area and also conducts residential real estate brokerage operations in Florida, California, Texas, Colorado, Nevada, Massachusetts, Connecticut, Maryland, Virginia and Washington, D.C.
Overview Douglas Elliman Inc. is a holding company and is engaged principally in two business segments: Real Estate Brokerage: the residential real estate brokerage services through our subsidiary Douglas Elliman Realty, which operates one of the largest residential brokerage companies in the New York metropolitan area and also conducts residential real estate brokerage operations in Florida, California, Texas, Colorado, Nevada, Massachusetts, Connecticut, Maryland, Virginia, Washington, D.C.
In addition, our significant accounting estimates, including our critical accounting estimates, are discussed in the notes to our audited combined consolidated annual financial statements included elsewhere in this Form 10-K. Results of Operations. This section provides an analysis of our results of operations for the years ended December 31, 2023 and 2022.
In addition, our significant accounting estimates, including our critical accounting estimates, are discussed in the notes to our audited consolidated annual financial statements included elsewhere in this Form 10-K. Results of Operations. This section provides an analysis of our results of operations for the years ended December 31, 2024 and 2023.
The forward-looking statements speak only as of the date they are made. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Market Risk” is incorporated herein by reference.
The forward-looking statements speak only as of the date they are made. 48 Table of Contents ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Market Risk” is incorporated herein by reference.
(2) Gross Transaction Value is the sum of all closing sale prices for homes transacted by our agents (excluding rental transactions). We include the value of a single transaction twice when our agents serve both the home buyer and home seller in the transaction.
(2) Gross Transaction Value is the sum of all closing sale prices for homes transacted by our agents (excluding rental tran sactions). We include the value of a single transaction twice when our agents serve both the home buyer and home seller in the transaction.
Based on cash receipts in January and February 2024, we expect these modest increases to continue in the first quarter of 2024 and the NAR and other real estate industry consortiums are forecasting similar increases in the U.S. residential real estate market in 2024.
Based on cash receipts in January and February 2025, we expect these increases to continue in the first quarter of 2025 and the NAR and other real estate industry consortiums are forecasting similar increases in the U.S. residential real estate market in 2025.
In 2023 , cash used in investing activities was comprise d of capital expenditures of $6,143 and the purchase of investments of $515 in our PropTech business. This was offset by $1,420 of proceeds from the sale of liquidation of long-term investments.
In 2023, cash used in investing activities was comprised of capital expenditures of $6,143 and the purchase of investments of $515 in our PropTech business. This was offset by $1,420 of proceeds from the sale of liquidation of long-term investments.
Our market risk management procedures cover material market risks for our market risk sensitive financial instruments. New Accounting Pronouncements Refer to Note 1, Summary of Significant Accounting Policies , to our combined consolidated financial statements for further information on New Accounting Pronouncements . Legislation, Regulation, Taxation and Litigation See Item 1. “ Business,” Item 1A.
Our market risk management procedures cover material market risks for our market risk sensitive financial instruments. 47 Table of Contents New Accounting Pronouncements Refer to Note 1, Summary of Significant Accounting Policies , to our consolidated financial statements for further information on New Accounting Pronouncements . Legislation, Regulation, Taxation and Litigation See Item 1. “ Business,” Item 1A.
Despite various “agentless” models such as “iBuying,” approximately 89% of buyers and sellers were assisted by a real estate agent or broker when purchasing or selling their home between July 2022 and June 2023, according to the National Association of Realtors, or NAR, highlighting the central role agents continue to play in real estate transactions.
Despite various “agentless” models such as “iBuying,” approximately 90% of sellers and 88% of buyers were assisted by a real estate agent or broker when selling or purchasing their home between July 2023 and June 2024, according to the National Association of Realtors, or NAR, highlighting the central role agents continue to play in real estate transactions.
These challenges have been marked by a reduced inventory of homes available for sale, which we believe has been caused by elevated mortgage rates since early 2022. According to the NAR, sales of existing homes of 4.09 million in 2023, which was the lowest amount since 1995, declined from 5.03 million in 2022 and 6.12 million in 2021.
These challenges have been marked by a reduced inventory of homes available for sale, which we believe has been caused by elevated mortgage rates since early 2022. According to the NAR, sales of existing homes of 4.06 million in 2024, which was the lowest amount since 1995, declined from 4.09 million in 2023 and 5.03 million in 2022.
The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We recognize operating lease expense on a straight-line basis over the lease term. Operating leases are included in operating lease ROU assets and lease liabilities on the consolidated balance sheets. Stock-Based Compensation.
The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We recognize operating lease expense on a straight-line basis over the lease term. Operating leases are included in operating lease ROU assets and lease liabilities on the consolidated balance sheets. Embedded Derivatives.
We will continue to employ a disciplined capital allocation strategy aimed at generating sustainable long-term value for our stockholders. Distribution and Basis of Presentation On December 29, 2021, Vector Group distributed all our common stock to its stockholders.
We will continue to employ a disciplined capital allocation strategy aimed at generating sustainable long-term value for our stockholders. Distribution On December 29, 2021, Vector Group distributed all our common stock to its stockholders.
“ Risk Factors, ” Item 3. “ Legal Proceedings ” and Note 13 to our combined consolidated financial statements, which contain a description of litigation. 43 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS In addition to historical information included in this annual report on Form 10-K, this report contains “forward-looking statements” within the meaning of the federal securities law.
“ Risk Factors, ” Item 3. “ Legal Proceedings ” and Note 14 to our consolidated financial statements, which contain a description of litigation. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS In addition to historical information included in this annual report on Form 10-K, this report contains “forward-looking statements” within the meaning of the federal securities law.
(4.26) % 1.30 % _____________________________ (1) We calculate total transactions by taking the sum of all transactions closed in which our agent represented the buyer or seller in the purchase or sale of a home (excluding rental transactions).
(1.79) % (4.26) % _____________________________ (1) We calculate total transactions by taking the sum of all transactions closed in which our agent represented the buyer or seller in the purchase or sale of a home (excluding rental transactio ns).
As of December 31, 2023, we were not aware of any indemnification agreements that would or are reasonably expected to have a current or future material adverse impact on our financial position, results of operations or cash flows. As of December 31, 2023, we had outstanding approximately $3,045 of letters of credit, collateralized by certificates of deposit.
As of December 31, 2024, we were not aware of any indemnification agreements that would or are reasonably expected to have a current or future material adverse impact on our financial position, results of operations or cash flows. As of December 31, 2024, we had outstanding approximately $2,990 of letters of credit, collateralized by certificates of deposit.
After a strong 2021, when existing home sales reported by the NAR reached their highest level since 2006, the residential real estate brokerage industry began experiencing significant challenges in 2022, which have continued to date.
Industry trends in 2024 After a strong 2021, when existing home sales reported by the NAR reached their highest level since 2006, the residential real estate brokerage industry began experiencing significant challenges in the second quarter of 2022, which have continued to date.
Goodwill and Indefinite Life Assets. Goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment on an annual basis, or whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable.
Goodwill and Indefinite Life Assets. Goodwill and intangible assets with indefinite lives are not amortized and are tested for impairment on an annual basis, as of October 1, or whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from our management’s perspective. Our MD&A is organized as follows: Business Overview.
“Business” for detailed overview and description of our principal operations. This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from our management’s perspective. Our MD&A is organized as follows: Business Overview.
Our income tax rates for the years ended December 31, 2023 and 2022 do not bear a customary relationship to statutory income tax rates due to the impact of certain nondeductible expenses, 39 Table of Contents state income tax rates, changes in valuation allowances, and excess tax benefits of stock-based compensation.
Our income tax rates for the years ended December 31, 2024 and 2023 do not bear a customary relationship to statutory income tax rates due to the impact of changes in valuation allowances, state income taxes, certain nondeductible expenses and excess tax benefits of stock-based compensation.
General and administrative expense consists primarily of compensation, stock-based compensation expense and other personnel-related costs for executive management and administrative employees, including finance and accounting, legal, human resources and communications, the occupancy costs for our headquarters and other offices supporting our administrative functions and, after the Distribution (beginning in 2022), include transition service fees paid to our former parent, Vector Group, for the use of office space and employees, professional services fees for legal and finance, insurance expenses and talent acquisition expenses. • Technology .
General and administrative expense consists primarily of compensation, stock-based compensation expense and other personnel-related costs for executive management and administrative employees, including finance and accounting, legal, human resources and communications, the occupancy costs for our headquarters and other offices supporting our administrative functions and, including, until December 2024, transition service fees paid to our former parent, Vector Group, for the use of office space and employees, professional services fees for legal and finance, insurance expenses and talent acquisition expenses. • Technology .
The average transaction value of a home we sold in 2023 was approximately $1.59 million — significantly higher than our principal competitors. We are building on our record of innovation. Douglas Elliman is focused on digitizing, integrating and simplifying real estate activities for agents and elevating their clients’ experiences.
The average transaction value of a home we sold in 2024 was approximately $1.67 million — significantly higher than our principal competitors. We are building on our record of innovation. We are focused on digitizing, integrating and simplifying real estate activities for agents and elevating their clients’ experiences.
We had cash and cash equivalents of approximately $119,808 as of December 31, 2023 and, in addition to cash provided from operations, such cash is available to be used to fund such liquidity requirements as well as other anticipated liquidity needs in the normal course of business.
We had cash and cash equivalents of approximately $135,657 as of December 31, 2024 and, in addition to cash provided from operations, such cash is available to be used to fund such liquidity requirements as well as other anticipated liquidity needs in the normal course of business.
Repeat business, as well the ability to provide ancillary services, allows agents to extend their client relationships and generate significant lifetime value. Industry trends in 2023.
Repeat business, as well the ability to provide ancillary services, allows agents to extend their client relationships and generate significant lifetime value.
We historically estimated our allowance for credit losses on receivables from agents based on an evaluation of aging, agent sales in pipeline, any security, specific exposures, and historical experience of collections from the individual agents. We estimated that the credit losses for these receivables were $5,575 and $10,916 at December 31, 2023 and December 31, 2022, respectively.
We historically estimated our allowance for credit losses on receivables from agents based on an evaluation of aging, agent sales in pipeline, any security, specific exposures, and historical experience of collections from the individual a gents. We estimated that the credit losses for these receivables were $4,783 and $5,575 at December 31, 2024 and December 31, 2023, respectively.
Under the fair value recognition provisions, we recognize stock-based compensation net of an estimated forfeiture rate and only recognize compensation cost for those shares expected to vest on a straight-line basis over the requisite service period of the award. Current Expected Credit Losses.
Our stock-based compensation uses a fair-value-based method to recognize non-cash compensation expense for share-based transactions. Under the fair value recognition provisions, we recognize stock-based compensation net of an estimated forfeiture rate and only recognize compensation cost for those shares expected to vest on a straight-line basis over the requisite service period of the award. Current Expected Credit Losses.
Douglas Elliman has a multi-year services agreement with Rechat for its agents, who are increasingly requesting and requiring superior access to technology and back-office support services.
We have a multi-year services agreement with Rechat for its agents, who are increasingly requesting and requiring superior access to technology and back-office support services.
Agents are able to generate significant repeat business from clients and referrals, with 65% of home sellers and 56% of home buyers between July 2022 and June 2023 choosing to work with an agent they had used in the past or from a referral, according to the NAR.
Agents are able to generate significant repeat business from clients and referrals, with 66% of home sellers between July 2023 and June 2024 choosing to collaborate with an agent they had used in the past or from a referral, according to the NAR.
Douglas Elliman boasts a prestigious luxury brand that is complemented by a comprehensive suite of technology-enabled real estate services and investments. These distinguishing qualities position us to capitalize on opportunities in the U.S. residential real estate market.
We boast a prestigious luxury brand that is complemented by a comprehensive suite of technology-enabled real estate services and investments. These distinguishing qualities position us to capitalize on opportunities in the U.S. res idential real estate market.
Douglas Elliman was recently named the most trusted real estate brokerage firm in the United States as part of the America's Most Trusted Series by Lifestory Research.
We were recently named the most trusted real estate brokerage firm in the United States as part of the America's Most Trusted Series by Lifestory Research.
Gross Transaction Value by quarter for the year ended December 31, 2023 was $7.3 billion for the three months ended March 31, 2023, $9.9 billion for the three months ended June 30, 2023, $9.3 billion for the three months ended September 30, 2023 and $7.9 billion for the three months ended December 31, 2023.
Gross Transaction Value by quarter for the year ended December 31, 2024 was $7.1 billion for the three months ended March 31, 2024, $10.7 billion for the three months ended June 30, 2024, $9.8 billion for the three months ended September 30, 2024 and $8.8 billion for the three months ended December 31, 2024.
Real estate agent commissions expense, as a percentage of revenues, increased to 73.9% for the year ended December 31, 2023 compared to 72.6% for the year ended December 31, 2022.
Real estate agent commissions expense, as a percentage of revenues, increased to 74.7% for the year ended December 31, 2024 compared to 73.9% for the year ended December 31, 2023.
In addition, in the second quarter of 2024, a lease on property used by one of our subsidiaries will expire and it will move its operations to a new location resulting in an approximate $4,000 reduction in annual occupancy costs on an ongoing basis. Critical Accounting Estimates General.
In addition, in the second quarter of 2024, a lease on property used by one of our subsidiaries expired and it has moved its operations to a new location resulting in an approxim ate $4,000 reduction in annual occupancy costs on an ongoing basis. 38 Table of Contents Critical Accounting Estimates General.
To evaluate our operating performance, we also use Adjusted EBITDA attributed to Douglas Elliman and Adjusted EBITDA attributed to Douglas Elliman Margin and financial measures for the year ended December 31, 2023 (“Non-GAAP Financial Measures”), which are financial measures not prepared in accordance with GAAP. 33 Table of Contents Year ended December 31, 2023 2022 Key Business Metrics Total transactions (1) 21,606 26,573 Gross Transaction Value (in billions) (2) $ 34.4 $ 42.9 Average transaction value per transaction (in thousands) (3) $ 1,592.3 $ 1,616.3 Number of Principal Agents (4) 5,150 5,407 Annual Retention (5) 92 % 87 % Certain GAAP Financial Information Net loss attributed to Douglas Elliman Inc. $ (42,552) $ (5,622) Net loss margin (4.45) % (0.49) % Non-GAAP Financial Measures Adjusted EBITDA attributed to Douglas Elliman Inc. $ (40,693) $ 14,951 Adjusted EBITDA margin attributed to Douglas Elliman Inc.
To evaluate our operating performance, we also use Adjusted EBITDA attributed to Douglas Elliman and Adjusted EBITDA attributed to Douglas Elliman Margin and financial measures for the year ended December 31, 2024 (“Non-GAAP Financial Measures”), which are financial measures not prepared in accordance with GAAP. 35 Table of Contents Year ended December 31, 2024 2023 Key Business Metrics Total transactions (1) 21,781 21,606 Gross Transaction Value (in billions) (2) $ 36.4 $ 34.4 Average transaction value per transaction (in thousands) (3) $ 1,669.6 $ 1,592.3 Number of Principal Agents (4) 5,264 5,150 Annual Retention (5) 89 % 92 % Certain GAAP Financial Information Net loss attributed to Douglas Elliman Inc. $ (76,316) $ (42,552) Net loss margin (7.67) % (4.45) % Non-GAAP Financial Measures Adjusted EBITDA attributed to Douglas Elliman Inc. $ (17,783) $ (40,693) Adjusted EBITDA margin attributed to Douglas Elliman Inc.
Our investment philosophy is to maximize return on investments using a reasonable expectation for return when investing in equity-method investments and PropTech investments as well as making capital expenditures. 42 Table of Contents Cash used in financing activities was $6,212 and $30,003 in 2023 and 2022, respectively.
Our investment philosophy is to maximize return on investments using a reasonable expectation for return when investing in equity-method investments and PropTech investments as well as making capital expenditures. Cash provided by financing activities was $45,452 in 2024, compared to cash used in financing activities of $6,212 in 2023.
We believe Non-GAAP Financial Measures provide a useful measure of operating results unaffected by non-recurring items, differences in capital structures and ages of related assets among otherwise comparable companies.
We believe that Non-GAAP Financial Measures are important measures that supplement analysis of our results of operations and enhance an understanding of our operating performance. We believe Non-GAAP Financial Measures provide a useful measure of operating results unaffected by non-recurring items, differences in capital structures and ages of related assets among otherwise comparable companies.
Income tax benefit was $15,053 for the year ended December 31, 2023 and income tax expense was $6,503 for the year ended December 31, 2022.
Income tax (benefit) expense . Income tax expense was $1,117 for the year ended December 31, 2024 and income tax benefit was $15,053 for the year ended December 31, 2023.
The decline is primarily related to reductions in personnel as well as lower incentive compensation expense in 2023. General and administrative. General and administrative expenses were $97,719 for the year ended December 31, 2023 compared to $104,887 for the year ended December 31, 2022.
General and administrative expenses were $86,726 for the year ended December 31, 2024 compared to $97,719 for the year ended December 31, 2023. The decline is primarily related to reductions in personnel as well as lower incentive compensation expense in 2024 and was offset by litigation expenses, settlement and related expenses. Technology.
After the Distribution, we are incurring expenses necessary to operate a standalone public company, including pursuant to a Transition Services Agreement entered into with Vector Group in connection with the Distribution.
Since the Distribution, we have been incurring expenses necessary to operate a standalone public company, including pursuant to the Transition Services Agreement entered into with Vector Group in connection with the Distribution, which was terminated in December 2024.
In 2023, cash used in financing activities was comprised of dividends and distributions on common stock of $4,222 and the withholding of shares as payment of payroll tax liabilities in connection with restricted stock vesting of $1,990.
In 2023, cash used in financing activities was comprised of dividends and distributions on common stock of $4,222 and the withholding of shares as payment of payroll tax liabilities in connection with restricted stock vesting of $1,990. We paid a quarterly cash dividend of $0.05 per share from March 2022 to March 2023.
Additionally, on June 12, 2023, our Board also declared an annual stock dividend on our common stock of 5%, which was paid on June 30, 2023 to stockholders of record as of the close of business on June 22, 2023.
On June 12, 2023, our Board also declared a stock dividend on our common stock of 5%, which was paid on June 30, 2023 to stockholders of record as of the close of business on June 22, 2023. 46 Table of Contents Real Estate Brokerage Litigation.
Douglas Elliman has joined the Bilt Rewards Alliance, a network of more than 2 million rental units across the country where renters can enroll in the loyalty program to earn points on rent paid.
Douglas Elliman has joined the Bilt Rewards Alliance, a network of more than two million rental units across the country where renters can enroll in the loyalty program to earn points on rent paid. This platform enhances Douglas Elliman’s suite of offerings for both the renters and landlords it represents.
Total transactions by quarter for the year ended December 31, 2023 were 4,627 for the three months ended March 31, 2023, 6,044 for the three months ended June 30, 2023, 5,913 for the three months ended September 30, 2023 and 5,022 for the three months ended December 31, 2023.
Total transactions by quarter for the year ended December 31, 2024 were 4,477 for the three months ended March 31, 2024, 5,885 for the three months ended June 30, 2024, 6,082 for the three months ended September 30, 2024 and 5,337 for the three months ended December 31, 2024.
If such determination is made and future losses are incurred over the period in which the net deferred tax assets are deductible, we believe it will be more likely than not that the benefits of these deductible differences will not be realized, and as a result will be required to maintain a valuation allowance for the full amount of the deferred tax assets.
We have established a valuation allowance because we believe it will be more likely than not that the benefits of these deductible differences will not be realized, and as a result are required to maintain a valuation allowance for the full amount of the deferred tax assets.
Other than the five private funds listed above in which New Valley Ventures invests as a limited partner, all of these companies currently provide technology or services to Douglas Elliman. To date, we have not recognized revenue from these investments and do not anticipate recognizing revenue from these non-controlling PropTech investments.
Other than the five private funds listed above in which New Valley Ventures invests as a limited partner, all of these companies currently provide technology or services to Douglas Elliman.
Factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, without limitation, the following: • general economic and market conditions and any changes therein, including due to macroeconomic conditions, interest rate fluctuations, inflation, acts of war and terrorism or otherwise, • governmental regulations and policies, including with respect to regulation of the real estate market or monetary and fiscal policy and its effect on overall economic activity, in particular, mortgage interest rates, • litigation and regulatory risk, including as a result of litigation or regulatory scrutiny of NAR and MLS rules regarding commission structure, • adverse changes in global, national, regional and local economic and market conditions, including those related to pandemics and health crises, • our ability to effectively manage the impacts of any government-mandated or encouraged suspension of our business operations, • the impacts of the Inflation Reduction Act of 2022 and the Tax Cuts and Jobs Act of 2017, including the continued impact on the markets of our business, • effects of industry competition, • severe weather events or natural or man-made disasters, including the increasing severity or frequency of such events due to climate change or otherwise, or other catastrophic events that may disrupt our business and have an unfavorable impact on home sale activity, • the level of our expenses, including our corporate expenses as a standalone public company, • the tax-free treatment of the Distribution, • our relative lack of operating history as a public company, • the failure of Vector Group to satisfy its respective obligations under the Transition Services Agreement or other agreements entered into in connection with the Distribution; and • the additional factors described under “Risk Factors” in this report.
Factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, without limitation, the following: • general economic and market conditions and any changes therein, including due to macroeconomic conditions, interest rate fluctuations, inflation, acts of war and terrorism or otherwise, • governmental regulations and policies, including with respect to regulation of the real estate market or monetary and fiscal policy and its effect on overall economic activity, in particular, mortgage interest rates, • the impacts of banks not honoring the escrow and trust deposits held by our subsidiaries, • litigation risks, the costs associated with, and the outcome of, litigation and other proceedings to the extent uninsured, including litigation or other claims against companies we invest in or acquire, • adverse changes in global, national, regional and local economic and market conditions, including those related to pandemics and health crises (and responses to them), • the impacts of the Inflation Reduction Act of 2022 and the Tax Cuts and Jobs Act of 2017, including the continued impact on the markets of our business, • effects of industry competition, severe weather events or natural or man-made disasters, including the increasing severity or frequency of such events due to climate change or otherwise, or other catastrophic events that may disrupt our business and have an unfavorable impact on home sale activity, • the tax-free treatment of the Distribution, and • the failure of Vector Group to satisfy its respective obligations under the agreements entered into in connection with the Distribution.
This amounts to approximately 3% of the value of Douglas Elliman’s total assets, which totaled approximately $493 million, as of December 31, 2023. As of December 31, 2023 our PropTech investments include (together, where applicable, investments monetized in 2023): ■ Rechat: a lead-to-close fully mobile technology dashboard for real estate agents including marketing, customer relationship management and transaction-management software.
As of December 31, 2024 our PropTech investments included (together, where applicable, investments monetized in 2024 ): ■ Rechat: a lead-to-close fully mobile technology dashboard for real estate agents including marketing, customer relationship management and transaction-management software.
During 2023, we determined that the fair value of our investment in Audience was zero and reported realized losses on convertible debt securities of $236,000. ■ Tongo: a financial program that gives real estate agents instant access to future commissions up to 60 days before closing. ■ Guest House: a tech-enabled company focused on the home staging market. ■ Alpaca: investment in Getaway House, Inc., a start-up company that provides cabin rental services in rural areas throughout the United States. ■ Infinite Creato r: a Do-it-Yourself video creation app that allows any agent with a phone to walk through a guided process and film the key pieces for a high-end luxury presentation video. ■ PropTech Venture Capital Funds: investments in the following venture capital funds providing New Valley Ventures exposure to opportunities in the emerging PropTech industry. ■ Camber Creek Venture Capital Funds: two funds that invest in a diversified pipeline of new PropTech ventures.
New Valley Ventures monetized 50% of its $500,000 investment in Bilt in 2024 and received approximately $1,282 and recorded a gain of approximately $959. ■ Persefoni AI: a software-as-a-service (“SaaS”) platform built to enable enterprises of all sizes to measure their carbon footprint accurately, dynamically and regularly across all operations. ■ Tongo: a financial program that gives real estate agents instant access to future commissions up to 60 days before closing. 45 Table of Contents ■ Guest House: a tech-enabled company focused on the home staging market. ■ Alpaca: investment in Getaway House, Inc., a start-up company that provides cabin rental services in rural areas throughout the United States. ■ Infinite Creato r: a Do-it-Yourself video creation app that allows any agent with a phone to walk through a guided process and film the key pieces for a high-end luxury presentation video. ■ PropTech Venture Capital Funds: investments in the following venture capital funds providing us exposure to opportunities in the emerging PropTech industry. ■ Camber Creek Venture Capital Funds: two funds that invest in a diversified pipeline of new PropTech ventures.
In 2023, our commission and other brokerage income generated from the sales of existing homes declined by $87,831 in New York City, $37,237 in our Florida market, $30,710 in the Northeast region, which excludes New York City, and $22,828 in the West region, in each case compared to the 2022 period.
In 2024, our commission and other brokerage income generated from the sales of existing homes increased by $22,386 in our Florida market, $12,403 in the Northeast region, which excludes New York City, and $2,761 in the West region, offset by $8,649 in New York City, in each case compared to the 2023 period .
In the quarterly period ended December 31, 2023, we utilized third-party valuation specialists to prepare a quantitative assessment of goodwill and trademark intangible assets related to Douglas Elliman, based on the current market conditions in the residential real estate brokerage industry.
In the three months ended September 30, 2024, we utilized third-party valuation specialists to prepare a quantitative assessment of the Company’s goodwill and trademark intangible assets, based on the current market conditions in the residential real estate brokerage industry which did not result in impairment charges related to its goodwill or trademark for the year ended December 31, 2024.
We paid a quarterly cash dividend of $0.05 per share from March 2022 to March 2023. On June 12, 2023, we announced that our Board had suspended the quarterly cash dividend, effective immediately.
On June 12, 2023, we announced that our Board had suspended the quarterly cash dividend, effective immediately.
Under development marketing service arrangements, dedicated staff are required for a subject property and these costs are typically reimbursed from the customer through advance payments that are recoupable from future commission earnings. 36 Table of Contents Advance payments received and associated direct costs paid are deferred, allocated to each unit in the subject property, and recognized at the time of the completed sale of each unit.
Under development marketing service arrangements, dedicated staff are required for a subject property and these costs are typically reimbursed from the customer through advance payments that are recoupable from future commission earnings.
Our revenues from commission and other brokerage income were $906,069 for the year ended December 31, 2023 compared to $1,099,885 for the year ended December 31, 2022, a decline of $193,816.
Our revenues from commission and other brokerage income were $946,557 for the year ended December 31, 2024 compared to $906,069 for the year ended December 31, 2023, an increase of $40,488.
The Rechat technology is a key element of MyDouglas, Douglas Elliman’s primary agent portal designed to be our agents’ technology front door, and StudioPro, the cloud-based agent portal and marketing tool recently launched by Douglas Elliman that helps integrate all agent resources in one user-friendly suite. ■ Purlin: an automated intelligence platform to aid in home buying, an agent “paid social media” integration in MyDouglas and Portfolio Escrow client and agent portals that also integrate with MyDouglas. ■ Humming Homes: a tech-enabled home management service that is creating a new category of end-to-end home management.
The Rechat technology is a key element of MyDouglas, our primary agent portal designed to be our agents’ technology front door, and StudioPro, the cloud-based agent portal and marketing tool recently launched by Douglas Elliman that helps integrate all agent resources in one user-friendly suite. ■ Purlin: an automated intelligence company that powers multiple platforms for Douglas Elliman including: a personalized collaboration platform to aid in home discovery for agents’ clients, an agent “paid social media” integration into MyDouglas that enables intelligent campaigns to promote specific listings, and client and agent portals and automated communications for Portfolio Escrow that also integrate with MyDouglas. ■ LiveEasy: a client- and customer-facing digital concierge service designed to assist clients and customers moving into and “setting up” their new homes, while offering additional services to maintain their homes.
Technology expense consists primarily of compensation and other personnel-related costs for employees in the product, engineering and technology functions, website hosting expenses, software licenses and equipment, third-party consulting costs, data licenses of PropTech and other related expenses associated with the implementation of our technology initiatives. 38 Table of Contents Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table sets forth our revenue and operating (loss) income by segment for the year ended December 31, 2023 compared to the year ended December 31, 2022: Year Ended December 31, 2023 2022 (Dollars in thousands) Revenues by segment: Real estate brokerage segment $ 955,578 $ 1,153,177 Operating (loss) income by segment: Real estate brokerage segment $ (36,769) $ 21,993 Corporate and other segment (27,728) (26,534) Total operating loss $ (64,497) $ (4,541) Real estate brokerage segment Operating income $ (36,769) $ 21,993 Depreciation and amortization 8,026 8,012 Restructuring 2,377 — Stock-based compensation 4,539 4,195 Adjusted EBITDA (21,827) 34,200 Adjusted EBITDA attributed to non-controlling interest 326 342 Adjusted EBITDA attributed to Douglas Elliman $ (21,501) $ 34,542 Corporate and other segment Operating loss $ (27,728) $ (26,534) Stock-based compensation 8,536 6,943 Adjusted EBITDA attributed to Douglas Elliman $ (19,192) $ (19,591) Year ended December 31, 2023 Compared to Year ended December 31, 2022 Revenues .
Technology expense consists primarily of compensation and other personnel-related costs for employees in the product, engineering and technology functions, website hosting expenses, software licenses and equipment, third-party consulting costs, data licenses of PropTech and other related expenses associated with the implementation of our technology initiatives. 41 Table of Contents Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table sets forth our revenue and operating (loss) income by segment for the year ended December 31, 2024 compared to the year ended December 31, 2023: Year Ended December 31, 2024 2023 (Dollars in thousands) Revenues by segment: Real estate brokerage segment $ 995,627 $ 955,578 Operating loss by segment: Real estate brokerage segment $ (37,354) $ (36,769) Corporate activities and other segment (31,472) (27,728) Total operating loss (68,826) (64,497) Real estate brokerage segment Operating loss $ (37,354) $ (36,769) Depreciation and amortization 7,736 8,026 Restructuring 616 2,377 Litigation, settlement and related settlement expense (a) 20,488 770 Executive employee severance and separation expense (b) 1,175 — Stock-based compensation 4,325 4,539 Adjusted EBITDA (3,014) (21,057) Adjusted EBITDA attributed to non-controlling interest 349 326 Adjusted EBITDA attributed to Douglas Elliman $ (2,665) $ (20,731) Corporate activities and other segment Operating loss $ (31,472) $ (27,728) Restructuring 425 — Litigation, settlement and related settlement expense (a) 12,845 — Executive employee severance and separation expense (b) 835 — Stock-based compensation 2,249 8,536 Adjusted EBITDA attributed to Douglas Elliman $ (15,118) $ (19,192) _____________________________ (a) Represents unusual litigation expense, settlement and related expenses incurred in connection with industry-wide antitrust class action lawsuits and other matters related to employees and agents.
The following table sets forth our combined consolidated statements of operations data for the Real Estate Brokerage segment for the year ended December 31, 2023 compared to the year ended December 31, 2022: Year Ended December 31, 2023 2022 (Dollars in thousands) Revenues: Commissions and other brokerage income $ 906,069 94.8% $ 1,099,885 95.4% Property management 35,542 3.7% 36,022 3.1% Other ancillary services 13,967 1.5% 17,270 1.5% Total revenues $ 955,578 100% $ 1,153,177 100% Operating expenses: Real estate agent commissions $ 706,162 73.9% $ 836,803 72.6% Sales and marketing 83,670 8.8% 85,763 7.4% Operations and support 70,605 7.4% 72,946 6.3% General and administrative 97,719 10.2% 104,887 9.1% Technology 23,788 2.5% 22,773 2.0% Restructuring 2,377 0.2% — —% Depreciation and amortization 8,026 0.8% 8,012 0.7% Operating (loss) income $ (36,769) (3.8)% $ 21,993 1.9% Revenues.
The following table sets forth our consolidated statements of operations data for the Real Estate Brokerage segment for the year ended December 31, 2024 compared to the year ended December 31, 2023: Year Ended December 31, 2024 2023 (Dollars in thousands) Revenues: Commissions and other brokerage income $ 946,557 95.1% $ 906,069 94.8% Property management 36,785 3.7% 35,542 3.7% Other ancillary services 12,285 1.2% 13,967 1.5% Total revenues $ 995,627 100% $ 955,578 100% Operating expenses: Real estate agent commissions $ 743,819 74.7% $ 706,162 73.9% Sales and marketing 82,606 8.3% 83,670 8.8% Operations and support (1) 69,278 7.0% 69,675 7.3% General and administrative (1) 83,465 8.4% 94,110 9.8% Technology 23,386 2.3% 23,788 2.5% Depreciation and amortization 7,736 0.8% 8,026 0.8% Antitrust litigation settlement expense 17,750 1.8% — —% Stock-based compensation (1) 4,325 0.4% 4,539 0.5% Restructuring 616 0.1% 2,377 0.2% Operating (loss) income $ (37,354) (3.8)% $ (36,769) (3.8)% _____________________________ (1) For the year ended December 31, 2024, $3,261 of stock-based compensation is included within General and administrative expenses and $1,064 is included within Operations and support expenses on the consolidated statements of operations.
Interpretations of and guidance surrounding income tax laws and regulations change over time and, as a result, changes in our subjective assumptions and judgments may materially affect amounts recognized in our combined consolidated financial statements.
Interpretations of and guidance surrounding income tax laws and regulations change over time and, as a result, changes in our subjective assumptions and judgments may materially affect amounts recognized in our consolidated financial statements. 40 Table of Contents We are taxed as a corporation for purposes of U.S. and state and local income taxes and calculate our provision for income taxes based upon our consolidated taxable income at current income tax rates.
The increase in real estate agent commissions expense as a percentage of revenue in 2023 was primarily driven by a higher percentage of revenues being generated in the Southeast (Florida) and West (primarily California), which traditionally pay higher commission rates than other regions, as well as a higher percentage of revenues being generated by top-performing agents and agent teams, who generally receive a higher commission percentage.
The increase in real estate agent commissions expense as a percentage of revenue in 2024 was primarily driven by a higher percentage of revenues being generated in the Southeast (Florida), which customarily pays higher commission rates than the New York City and Northeast regions. Sales and Marketing.
Corporate and other: the operations of our holding company as well as our investment business that invests in select PropTech opportunities through our New Valley Ventures subsidiary. See Item 1. “Business” for detailed overview and description of our principal operations.
Arizona, New Hampshire and Michigan. We also offer, including through our subsidiaries and ventures, ancillary services, such as property management, title and escrow services. Corporate Activities and Other: the operations of our holding company as well as our investment business that invests in select PropTech opportunities through our New Valley Ventures subsidiary. See Item 1.
We have previously established valuation allowances related to separate company federal and state income tax benefits and, to date, have not established any valuation allowances on the remaining net deferred tax assets. We will continue to evaluate the realizability of our net deferred tax assets using all available evidence, which may result in a future change to our valuation allowances.
We will continue to evaluate the realizability of our net deferred tax assets using all available evidence, which may result in a future change to our valuation allowances. 43 Table of Contents Real Estate Brokerage.
The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. Therefore, we are required to make many subjective assumptions and judgments regarding our income tax exposures.
Therefore, we are required to make many subjective assumptions and judgments regarding our income tax exposures.
Development marketing service arrangements also include direct fulfillment costs incurred in advance of the satisfaction of the performance obligation.
Advance payments received and associated direct costs paid are deferred, allocated to each unit in the subject property, and recognized at the time of the completed sale of each unit. Development marketing service arrangements also include direct fulfillment costs incurred in advance of the satisfaction of the performance obligation.
Real Estate Agent Commissions. Because of declines in commissions and other brokerage income, our real estate agent commissions expense was $706,162 for the year ended December 31, 2023 compared to $836,803 for the year ended December 31, 2022, a decline of $130,641 (15.6%).
The primary components of operating expenses are described below. Real Estate Agent Commissions. Because of increases in commissions and other brokerage income, our real estate agent commissions expense was $743,819 for the year ended December 31, 2024 compared to $706,162 for the year ended December 31, 2023, an increase of $37,657 (5.3%).
This was partially offset by equity losses from equity method investments of $168. (Loss) Income before provision for income taxes . Loss before income taxes was $58,219 for the year ended December 31, 2023 and income before income taxes was $104 for the year ended December 31, 2022. Income tax (benefit) expense .
This was partially offset by interest income of $5,533 and investment and other income associated with our investments of our PropTech business of $5,289. Loss before provision for income taxes . Loss before income taxes was $75,885 for the year ended December 31, 2024 and loss before income taxes was $58,219 for the year ended December 31, 2023.
Adjusted EBITDA attributed to Douglas Elliman Margin is the quotient of (x) Adjusted EBITDA attributed to Douglas Elliman divided by (y) revenue. We believe that Non-GAAP Financial Measures are important measures that supplement analysis of our results of operations and enhance an understanding of our operating performance.
We use Annual Retention as a measure of agent stability. Non-GAAP Financial Measures Adjusted EBITDA attributed to Douglas Elliman is a non-GAAP financial measure. Adjusted EBITDA attributed to Douglas Elliman Margin is the quotient of (x) Adjusted EBITDA attributed to Douglas Elliman divided by (y) revenue.
Market Risk We are exposed to market risks principally from fluctuations in interest rates and could be exposed to market risks from foreign currency exchange rates and equity prices in the future. We seek to minimize these risks through our regular operating and financing activities and our long-term investment strategy.
We seek to minimize these risks through our regular operating and financing activities and our long-term investment strategy.
Our revenues were $955,578 for the year ended December 31, 2023 compared to $1,153,177 for the year ended December 31, 2022. The $197,599 decline in revenues was because of lower revenues from existing home sales caused, in part, by lower listing inventory and elevated mortgage rates. Operating expenses .
Revenues . Our revenues were $995,627 for the year ended December 31, 2024 compared to $955,578 for the year ended December 31, 2023. The $40,049 increase in revenues was primarily due to an increase in commissions and other brokerage income because of increased commissions from existing home sales. Operating expenses .
The operating loss at the Corporate and Other segment was $27,728 for the year ended December 31, 2023 compared to $26,534 for the year ended December 31, 2022. Summary of PropTech Investments As of December 31, 2023, New Valley Ventures had investments in PropTech companies and funds (at a carrying value) of approximately $13.4 million.
The operating loss at the Corporate activities and other segment was $31,472 for the year ended December 31, 2024 compared to $27,728 for the year ended December 31, 2023.
The decline was primarily due to reduced advertising expenditures and promotional sponsorships and events in 2023. 40 Table of Contents Operations and support. Operations and support expenses were $70,605 for the year ended December 31, 2023 compared to $72,946 for the year ended December 31, 2022.
Sales and marketing expenses were $82,606 for the year ended December 31, 2024 compared to $83,670 for the year ended December 31, 2023. 44 Table of Contents Operations and support. Operations and support expenses were $70,342 for the year ended December 31, 2024 compared to $70,605 for the year ended December 31, 2023. General and administrative.
Our operating expenses were $1,020,075 for the year ended December 31, 2023 compared to $1,157,718 for the year ended December 31, 2022. The $137,643 decline was due primarily to declines in real estate brokerage commissions of $130,641. Operating loss .
Our operating expenses were $1,064,453 for the year ended December 31, 2024 compared to $1,020,075 for the year ended December 31, 2023.
(b) Represents equity in losses recognized from the Company’s investments in equity method investments that are accounted for under the equity method and are not consolidated in the Company’s financial results. 35 Table of Contents Recent Developments Litigation.
(b) Represents equity in (earnings) losses recognized from our investments in equity method investments that are accounted for under the equity method and are not consolidated in our financial results. (c) Represents unusual litigation expense, settlement and related expenses incurred in connection with industry-wide antitrust class action lawsuits and other matters related to employees and agents.
In 2022, cash used in investing activities was comprised of capital expenditures of $8,537, the purchase of investments of $3,875, and investments of $400 in equity-method. This was offset by $75 of distributions from equity-method investments.
In 2024 , cash used in investing activities was comprise d of capital expenditures of $5,534 and the purchase of investments of $330 in our PropTech business. This was offset by $8,882 of proceeds from the sale of liquidation of long-term investments.

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