A housing bubble, personified
by David Atkins
This is the sort of article you see during bubble times:
Leveraging their strongest assets—expertise in banking, investment-return modeling, trust law and tax shelters—some Wall Street executives have quit their jobs to sell luxury real estate.
“I’m not just selling the pretty apartment. My financial acumen is my added value,” said Jack Drapacz, a former hedge-fund vice president who three months ago took at a job as a broker at Douglas Elliman, a luxury brokerage in Manhattan.
Mr. Drapacz, who holds a master’s in business administration and a law degree, spent 14 years on Wall Street. He left his hedge-fund job in late 2012 as the company was downsizing. After taking some time off to travel and consult, he sought out an outlet for his “creative side and entrepreneurialism,” which led him to Elliman. Because Mr. Drapacz is an attorney in New York, he was able to skip the coursework, exams and professional experience normally required to get a broker’s license. He now represents buyers seeking two townhouses and two condominiums, and is working on landing two cooperative-apartment listings and helping to sell a condo.
Sharran Srivatsaa, president and chief operating officer of Beverly Hills, Calif.-based Teles Properties, was a private wealth adviser at Goldman Sachs GS +2.22% and a private banker at Credit Suisse before leaving Wall Street in 2011 to help run the brokerage in South California. Chris Liem, managing director of luxury brokerage Engel & Völkers in Hong Kong, opened the branch of the Germany-based brokerage in 2010 after running Lehman Brothers’ cash-trading division. Tricia Hayes Cole, formerly in equity-derivative trading and sales at Lehman Brothers and Bankers Trust, holds an M.B.A. from University of Pennsylvania’s Wharton School. Today she is the executive managing director of Corcoran Sunshine Marketing Group, the new-development division of Manhattan brokerage Corcoran Group.
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The Wall Street to Elm Street transitions are increasing. Today, 19% of all Realtors come from a management, business or financial-services background, making it the most common previous career, up from 13% in 2003, according to a survey by the National Association of Realtors. The increasing professionalism of new agents underscores a sea change in the industry, said Eric Sussman, senior lecturer at the Ziman Center for Real Estate at the University of California, Los Angeles.
Wherever these types of people end up, that’s where the next bubble is. With income inequality continuing to spike, the top money is looking for greater returns. And the economic grifters who have spent the last decade making themselves rich by finding the plutocrats greater “rates of return” at the expense of everyone else have started to figure out that they can continue the grift with less scrutiny and more flexibility at the top of the real estate market.
Look out below.
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