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Century 21 NY Metro Said To Be On Brink Of Closure, Firm Seeks New Capital
Century 21 NY Metro said to be on brink of closure, firm seeks new capital
November 22, 2010 07:00PMBy Candace Taylor
From left: Marc Lewis, Paul Bologna (top), Jorden Tepper and 228 East 45th Street (building photo credit: PropertyShark)
The management of brokerage Century 21 NY Metro is looking for new investors in a bid to save the company, industry sources said.
The residential and commercial real estate company has been having cash flow problems and recently failed to make payroll, according to several agents who said they are owed commissions. With rumors flying that the company is on the verge of shutting its doors, a large number of agents have left the firm.
Agents were told several weeks ago that the owners were exploring a partnership with the long-established real estate management firms Mautner-Glick Corp. and Wallack Management to inject new capital into the company.
But Marc Lewis, the president and CEO of Century 21 NY Metro, said that deal is not going forward, and the two firms are not involved with his company. He declined to comment further on changes at Century 21 NY Metro, other than to say: "There's nobody that's not going to be paid."
Century 21 NY Metro emerged from the 2006 merger of two firms, Dwelling Quest and Century 21 Kevin B. Brown, along with partners Bob Cohen -- better known for his Cohen Fashion Optical business -- and Texas entrepreneur Frank Krasovec. Original CEO Mike Simon was replaced in 2008 by Lewis, his former boss.
The rental and sales company ran into financial trouble after a lackluster summer, insiders said, and a bevy of agents began moving to other firms.
Jorden Tepper, the company's one-time director of sales, has moved to Prudential Douglas Elliman, where he is heading a team of five agents. About a month ago, Lewis hired former Elliman associate broker Marc Windheuser to replace Tepper as sales director. At the time, Lewis said the move was an attempt to expand the company's sales division by bringing in new blood, but Tepper said the switch was made because Century 21 could no longer afford to pay his salary. That's also what prompted his move to Elliman, he said.
"I left because of their financial difficulties and inability to pay me," said Tepper, who is working out of Elliman's 575 Madison Avenue office.
Lewis denied that he owes Tepper money.
A number of top-producing Century 21 agents have moved to Bond New York Real Estate with their teams, including Paul Bologna -- Century 21's former vice president of rentals -- Lesley Steiner, Joseph Lombardo, Paul Bologna and Andrew Goldsmith.
Bruno Ricciotti, a principal at Bond, confirmed that some 25 former Century 21 agents have come to his company in recent weeks, and that Bond has rented a fourth floor at their 1776 Broadway office to accommodate them. But he declined to comment further.
In March, Century 21 NY Metro relocated to a new 13,000-square-foot office at 228 East 45th Street, between Second and Third avenues. At the time, the firm had around 150 agents. The new office is roughly 40 percent larger than the company's old Madison Avenue office, and can house up to 200 people, according to Lewis, who said at the time he had plans to expand.
The rent is comparable to what the company was paying at the old space, Lewis told The Real Deal then, so it's unlikely that overwhelming overhead was drowning the firm. Other sources said it's more likely that the continued weak economy hurt the company.
"I don't necessarily think [Century 21 NY Metro] was prepared for a tightening market," said one source.
Meanwhile, agents say they are being kept in the dark about what's happening with the company.
"I'm very curious myself," said Windheuser when asked about the rumors. "Nobody's told me anything."