Simon says he can see the forest for the trees

Real Estate Weekly, Jan 31, 2007 by Linda Barr

Mike Simon, the recently installed president and CEO of the newly created Century 21 NY Metro, just spent the last several days entertaining a delegation of Japanese brokers in town to learn the ways of their American counterparts.

"They were here to talk about marketing property, hiring practices, pricing and really just share information," said Simon, who created the corporation's newest franchise through the purchase and merger of the two Manhattan brokerages, Dwelling Quest and C21Kevin Brown, that he bought last summer with partners, Bob Cohen--better known for his Cohen Fashion Optical business--and Texan entrepreneur, Frank Krasovec, billionaire guru of the promotional products industry.

The Japanese were particularly interested in learning how American women have become so successful in the real estate business and Simon was only too happy to shatter their illusion that the typical female agent is a disgruntled housewife. "While that may be true in some parts of the country, I have to say, they were truly floored when we introduced them to some of our top female producers, career women in their 20s and 30s who are making a lot of money," said Simon.

When the delegates asked the women what they would do when they found a husband, Simon laughed, "I thought the ladies were going to beat the daylights out of them!"

The light-hearted moment brought some welcome relief to Simon, who freely admits his first few months at the helm of the new firm have been far from easy.

"It's been a bumpy integration, but then integrations always are," he confessed. "We've cleaned house and now have 150 brokers [in two offices at 575 Madison Avenue and in Harlem]. The two separate businesses needed a lot fixed. From financial problems to general integration, it was everything I could do to keep us in relaunch mode. But it's my job to manage costs and expand efficiently and I think we have taken two companies and created one much stronger one."

The fact that revenues are up 10% since his restructuring began is testament to Simon's ability to execute even the most complicated of mergers. As a career executive with the former Cendant Corporation (now Realogy and the parent company of Century 21 Real Estate, LLC) he was a major player in several of that corporation's most notable mergers and acquisitions

After an early start in the business as a broker himself in New York City, he very quickly realized his skills were better suited to the boardroom and he flourished as an executive with Cendant's business development, becoming managing director of Cendant's European headquarters office in London, in the Cendant Internet Group, Travel Distribution Division and then, finally, returning to Europe as COO of the Coldwell Banker European Franchise Company.

"What I'm doing today very much reminds me of my work at Cendant. When I first joined the firm, we were buying Coldwell Banker, Century 21 and ERA and creating a consolidated business model. While there were a lot more zeroes attached to that, what I'm doing today is essentially the same thing, so it's definitely not foreign to me."

The idea of establishing an investment/holding company for residential brokerages was incubated during his second tour of duty in Europe as he sought to acquire the assets of a 300-office chain in England. While this transaction was never completed, he and his business partners never lost sight of the opportunity and switched their focus to the domestic market early in 2006.

With the opportunity to acquire the assets of the two agencies and the availability of the Century 21 brand in the New York City market, Simon and his partners found the platform they had been looking for since 2003 and together formed RealStar, LLC, completing the two acquisitions in late July, 2006.

"My partners and I had formed a good plan, but if anyone thinks such plans can be executed without a hiccup then they've never worked in the business before--it's not as simple as you might think. But if you have good partners behind you, even with the hurdles that you hit, you will get there. Six months of suffering is nothing compared to the long term benefits that we will enjoy," he said confidently.

With the majority of the grind now behind him, Simon is now looking towards further expansion, a strategy market watchers say brands such as Century 21 are employing to bridge the gap between their phenomenally successful suburban business and their somewhat stunted success in the city.

Simon himself is a true believer in the power of the brand name. "In slower times, the alignment with large franchise brands increases, since brokers want brand awareness and the marketing advantages afforded by large-scale operations.

"Century 21 is the most recognized brand in the world. It has more than 8,000 independently owned and operated franchised broker offices in over 45 countries worldwide. With over 60% of residential buyers in the New York market originating from outside the city, the breadth, depth and reach of the brand is with out comparison."