HOUSTON – (By Michelle Leigh Smith for Realty News Report) – John Daugherty Realtors, a venerable brokerage known for selling mansions in River Oaks, Memorial and other Houston neighborhoods favored by the city’s wealthiest, has been acquired by New York-based Douglas Elliman.
For more than 50 years, generations of old-money clients have turned to John Daugherty Jr. when buying or selling upscale homes and estate properties.
Many of Daugherty’s deals were finalized discreetly—over lunch at Tony’s, in the River Oaks Country Club Grill, in the club’s locker room, or even on quail hunting trips in South Texas.
Although Douglas Elliman operates 120 offices with more than 7,000 sales agents and is a household name in New York, Beverly Hills and Aspen, it has not been widely recognized by Houstonians. Still, Elliman serves clients in markets that closely resemble Daugherty’s clientele.
Positioning and Market Fit
Douglas Elliman has a strong Park Avenue identity and a powerful presence in Palm Beach, Florida—home to The Breakers and Worth Avenue—where luxury and cosmetic-enhancement culture are especially prominent.
This summer, news began to spread that Douglas Elliman was expanding into Texas. The firm first acquired The Sudoff Companies, a high-rise specialist, appointing Jacob Sudoff as CEO of Douglas Elliman Texas.
At the same time, discussions with John Daugherty Realtors—founded in Houston in 1967—continued.
“They’ve been talking with us for more than a year. If we were going to sell, it would have been to Douglas Elliman,” Daugherty says. “They control the high end of the market. They have 120 offices and more than 7,000 sales associates, with advanced technology and extensive training—even for top producers’ assistants. They are the Rolls-Royce of the industry in the U.S.”
Agent Movement and Competitive Pressure
Then an unexpected twist occurred.
Compass, a seven-year-old residential brokerage that recently leased 27,000 square feet of prime space near Highland Village, targeted some of Daugherty’s top agents.
Top producer Laura Sweeney, who closed $130 million in sales in 2018, joined Compass in mid-December. At the same time, Lisa Kornhauser—ranked fourth in Houston after closing $83 million across 61 sales in 2018—also left for Compass.
“This isn’t my first rodeo,” Daugherty says. “We lost agents before in the early 2000s and in the late 1970s. Each time we tightened up, circled the wagons and came back stronger.”
Less than 10 days after the departures were announced, Douglas Elliman’s acquisition of John Daugherty Realtors was confirmed.
“We just reopened the door,” Daugherty says. “I will still be full time. I’m going to focus on what I enjoy most—business development and marketing.”
He expects the new structure to be fully in place by January 2020 and stresses that the company’s core values and approach will remain intact.
“Our firm will keep the same name, with the addition of ‘a Douglas Elliman Company’ in small print,” Daugherty explains. “Our business has always centered on people and homes. We bring them together so life becomes more pleasurable, secure and graceful.”
Daugherty adds that understanding Houston’s neighborhoods requires more than looking at online data. “You won’t learn the nuances of a city by studying charts on the internet. You must live and breathe its history and understand what the future holds.”
The Meeting: John Daugherty and Howard Lorber
Daugherty says he first met Elliman representatives early last summer. “I went to New York and met with Howard Lorber at his office. We lunched with the executive vice president at a private club and spent a day and a half there. We learned a lot and were very impressed.”
He adds, “We wanted to learn more about them before committing. There isn’t another firm in the country that matches their market penetration—they dominate in many luxury markets. We believe we can strengthen our position by joining them. There’s no question we are compatible.”
John Daugherty Realtors currently has 125 agents and two Houston-area offices; Elliman is both large and internationally connected.
In addition to its U.S. operations, Douglas Elliman maintains a strategic alliance with London-based Knight Frank Residential for luxury markets across 60 countries and six continents. Elliman also offers development marketing, property management and commercial real estate services.
“No decisions have been made about locations—we’ll keep our Galleria and The Woodlands offices,” Daugherty says. “All that will remain in place.”
Elliman is especially strong in high-rise luxury towers—Knight Frank reported 41 sales over $25 million last year—but Daugherty says his firm will continue focusing on high-end residential, not vertical marketing.
Longtime company president and chief operating officer Cheri Fama will become president of Elliman’s Houston operation, while Daugherty will serve as chairman.
Will the deal mean more travel to New York and less time quail hunting?
“I hope not,” he laughs, “but I will be going to New York more often.”
Early Years and First Sale
John Daugherty Sr. grew up on Elysian Street in Houston’s historic Fifth Ward and graduated from St. Thomas High School. Born in 1905, he worked in the oilfield service industry, first with an office on Navigation and later downtown in a building owned by George H. Brown.
John Daugherty Jr. grew up in River Oaks, attended Lamar High School and sold his first home in 1966—the Mary Katherine and Howard Creel residence—for $300,000. He founded his own firm a year later.
“I will never forget how excited John was about that first sale,” recalls childhood friend Jack Whitley.
Known affectionately as “Deb’s Delight” during his youth, Daugherty came from a family of social standing. Friends like John Adger, Tom Booth and Ralph B. Thomas, along with Jack Whitley, remain confident that Daugherty will continue to be the go-to agent for Houston’s upper crust regardless of the company name.
Going forward, the firm will be known as “John Daugherty Realtors – A Douglas Elliman Company.” The deal is finalized.
Dec. 23, 2019 Realty News Report Copyright 2019
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