For Los Angeles real estate agents like Umansky who specialize in multimillion-dollar listings, open houses are an opportunity to show potential buyers the type of lives they might lead as owners of a “modern marvel” or a “Bel Air mansion in the sky.”
As the co-founder and chief executive of The Agency Holdco. Inc., Umansky, 50, and his agents were among the first to turn L.A. open houses into elaborate parties with gimmicks like Lamborghinis parked in the driveway and copious amounts of champagne poured by acrobats.
These events have been impossible to replicate during the pandemic, which, due to safety reasons, has reduced open houses to solo showings and virtual tours.
Still, that hasn’t thrown Umansky off his game.
Like other luxury agents, he had a banner year in 2020, generating $322 million in L.A. County sales volume, good for a No. 15 ranking on the Business Journal’s list of residential agents. The Agency’s 16 top agents, Umansky included, reported $2.4 billion in sales volume last year, up from $2.2 billion in 2019.
Umansky is perhaps best known as the husband of “The Real Housewives of Beverly Hills” cast member Kyle Richards, but he has his own claims to fame. He has worked on deals for properties that have belonged to Michael Jordan, Lady Gaga and Hugh Hefner.
In an interview with the Business Journal, Umansky talked about how he has been navigating the pandemic, the benefits of reality TV, competition from Compass and more.
What are you up to now as chief executive at The Agency?
As of six months ago, I stopped getting involved with business admin and all of the operations. My role has changed to really just be in charge of the brand, the face of the brand, and anything and everything that has to do with revenue. That includes franchise sales, listings, new developments, recruiting, etc.
We grew too big and got to a place where I couldn’t do everything. And the truth is my education is not in business administration. … My expertise has always been in branding, marketing and sales. … Once I found Rainy Hake Austin (to serve as president), the decision became, quite honestly, very simple. And now looking back at the last six months … it has been the perfect decision.
Without open houses, how are you getting a grip on inventory? Are you constantly perusing Redfin and Zillow?
Just like the rest of you, (we’re) just on the internet all day long. Sometimes we’re doing previews, but in a lot of cases you have to show a client a house cold, without ever seeing it, because you may not have an opportunity to preview. … I am very much looking forward to the homes opening up again. From an agent’s perspective, our knowledge of the market is critical, and being able to see houses is critical.
How are you finding new clients right now?
You’re seeing a lot more mailers. There’s a lot of digital marketing where you can push your marketing, your campaigns directly to IP addresses. For me, the old-fashioned way, which is great — and I wish more young people would learn how to do it — is calling. They just don’t get that art.
Tell me about why you started The Agency.
We felt that there was a void in the market — that the brokerage firms were all very archaic. There was no change, from the perspective of the way people marketed properties. “The house has four bedrooms, three bathrooms, Viking appliances and granite countertops.” We never talk about that. We talked about the lifestyle. None of the firms were using technology to help agents. Even today, the big firms are still having a hard time with the adoption of technology. You’re not allowed to work at The Agency unless you adopt the technology. You can’t get paid. You can’t order an ad. You can’t communicate. It’s not that we discriminate; you just can’t operate within the company. You’d be lost. The primary system, which is our CRM (customer relationship management) system, we built from the ground up.
What were some of the early challenges you faced?
We launched without raising money. We did it with just ourselves. There were definitely challenges with cash flow. We launched at the right time — launched at the end of the last recession and the beginning of a real estate boom. That was lucky. Or foresight. I don’t know. Maybe a little bit of both.
The Agency hit some bumps in the last couple of years, including a story about how “sharing” listings was benefiting agents at the top, prompting an exodus of employees. Can you talk about that?
There were a few agents who left. A lot of those agents have come back. Even during that time when a few people left to go to Compass, we still had growth in agents. We lost 30, but we still had a net gain of 50.
There’s a misunderstanding of what it means to share a listing. Basically, what it means is if two agents go up for the same listing, very often the collaborative culture of The Agency is to share it. There’s no rule that says you have to share the listing. (Luxury residential real estate is) a very cutthroat business, and it’s very nasty. To have an environment (at The Agency) where you’re not always watching over your shoulder … the agents love it.
What’s The Agency’s office situation like now? Have you had to close any locations because of the pandemic?
When I saw people starting to pull back on office space, that’s when I started to get more aggressive. We definitely got some good deals on leases. We just opened this year offices in Connecticut, Long Island, Maryland … and we have continued our expansion in Northern California. We opened up Aspen during the pandemic. … We are about to open new offices in Pacific Palisades — that’s scheduled to open in a month. And we opened Studio City last week.
How do you determine which markets are a good fit for The Agency?
It has to be a city that I like to visit. It has to have a vibrant market. It has to be big enough where the money flows. It doesn’t have to be expensive, but it has to have a luxury component.
The Playboy Mansion is one of the most famous houses in L.A. What was it like to get to work on that listing?
That was one of the most fun things I worked on. You could really play around with creativity on the marketing side. My video for it had a Playboy bunny, and (visually) we went from black and white into color. I got the listing because I had the video, the brochure all laid out prior to my listing presentation. Showing it was a blast because everybody I was showing it to was very happy to be there.
How much of a threat is Compass, another tech-focused brokerage that has amassed a huge roster of agents across the country, including in L.A.?
I … don’t want to say this but (it’s like) being the Luke Skywalker to Darth Vader. They’re out there, and they’re loud. They’re definitely a competitor. … They took 30 of my agents. (But) I think I’ve taken more agents from them than they’ve taken from me. I think there’s ways to (co)exist. (The Agency and Compass) were born six months apart from each other. If you read all of our old stuff, there are very similar philosophies. They’re definitely paving the way. They’re paving the way toward technology. They’re paving the way for us (to go public), either through a SPAC or IPO. I can definitely see that happening.
You make a lot of appearances on “The Real Housewives.” How much does that help your real estate business?
Having The Agency out on television has helped tremendously. I couldn’t quantify it. I often wonder whether we would be in the same place (without it) … (because) there has also been some negative press. Now as we’re growing and selling franchises around the world, there’s no question that having a high profile helps in other markets and countries.
Have you ever explored getting a show of your own?
I have. I’m exploring it now. Stay tuned.
Besides reality TV, where do you see The Agency in five years?
I see us as a boutique firm, with our openness, collaboration, with everybody having access to the same CRM, with everyone in communication, (and) with global reach in Asia, Europe, the Middle East. I don’t need to be Walmart; I’m more of a Neiman Marcus.
I definitely see it becoming a public company. I’m not telling you that that’s my end goal. I like owning it and being private. But I can definitely see it.
What challenges lie ahead?
The biggest challenge is being able to grow and maintain a family feeling. (And) the markets. We have zero debt. We don’t have any external money. We do things the old-fashioned way, the way Warren Buffet says to do it. We’re pretty healthy right now financially. So, we definitely can handle a small recession, but we can’t handle a big depression.