Mike Glickman Realty Expected to Cease All Operations This Week : Real estate: A shutdown would be an embarrassing turnabout for the 30-year-old who built the Valley’s biggest residential brokerage.
Mike Glickman Realty Inc., the San Fernando Valley’s largest residential real estate brokerage firm, will close all of its offices and lay off its more than 1,200 agents by Wednesday, industry sources and Glickman agents said Monday.
In addition, agents said owner Mike Glickman has told them that he intends to liquidate the company through bankruptcy.
Glickman, who until recently steadfastly denied rumors of impending failure, would not return phone calls. A company spokeswoman said only that a “major announcement” will be made Wednesday morning at Glickman’s Woodland Hills headquarters.
The downfall of the firm would represent an embarrassing turnabout for the 30-year-old Glickman, once a Wunderkind of the local real estate market. Glickman started in the real estate business when he was 15 by delivering flyers for local real estate agents. He started his own company in 1983 and quickly built it into the Valley’s largest brokerage firm. But Glickman’s rapid expansion during the overheated market of 1987 and 1988 and the subsequent slowdown of real estate sales were blamed Monday for the company’s demise.
In April, sales of existing, single-family homes declined 27% in the Los Angeles area from a year earlier, according to the California Assn. of Realtors.
“This is a young man. He built a large organization. He grew too quickly. Frankly, I feel sorry for him,” said Fred Sands, owner of Brentwood-based Fred Sands Realtors.
Some of Glickman’s agents said they were notified at a companywide meeting Sunday night that they were being laid off and that they had until Wednesday morning to clear out of their offices. “He said he’s going to go through bankruptcy and then look for what to do in the real estate business,” said Sammy Yosef, a Glickman agent in Woodland Hills.
On May 1, Glickman closed offices in Brentwood, Beverly Hills and Sherman Oaks and said he would cut his work force--then about 1,600 agents--by about 15% during the next several months. The five remaining offices to close Wednesday are in Woodland Hills, Encino, Sherman Oaks, Northridge and Agoura.
There was speculation throughout the industry Monday that another large real estate company, such as Jon Douglas Co. of Beverly Hills, would buy some of Glickman’s offices. In a phone interview, Douglas would not confirm or deny those rumors but said he hadn’t spoken to Glickman since last week, when he had a “general discussion” with him regarding the real estate market.
Douglas added that “if Mike or his top people were available, we’d be interested.”
Sands said Glickman was letting his agents take their listings with them as they moved to other companies, but Glickman would retain a 10% referral fee.
What remains to be determined is what would happen to commissions on properties currently in escrow if Glickman liquidates his company in bankruptcy court.
After last month’s office closures, rumors proliferated throughout the real estate community that Glickman was in a financial crisis. In an interview with The Times, Glickman admitted that he was behind in payments to creditors and that he was cutting expenses such as free lunches and valet parking for his agents.
Glickman said the company had more than 200 creditors. The Los Angeles Times and the Daily News were the two biggest creditors, and he owed them more than $100,000 apiece, he said.
He also acknowledged that he had sold his interest in seven Valley-area homes in order to raise $150,000 for Glickman Realty.
However, Glickman at the time also said: “We definitely have not considered bankruptcy. I’ll be around forever.”
Ofra Levensohn, an agent at Glickman’s Woodland Hills office, said she was shocked and angry when she learned about the office closures Monday morning. “He kept telling us everything was nice and dandy,” Levensohn said.
But others said they weren’t surprised by Glickman’s announcement. “I knew it was coming for a long time,” said Omar Sadat, also a Glickman agent in Woodland Hills. “The signs started about a month ago, the way he started cutting things.”
Other real estate companies moved quickly Monday to lure Glickman agents--and their listings--to their firms. At various hotels around the Valley, hundreds of Glickman agents met with officials of Fred Sands, Prudential California Realty and other firms.
At the Marriott in Woodland Hills, more than 100 Glickman agents turned out to discuss opportunities with Prudential executives. “Our phones have been ringing off the hook” with calls from Glickman agents looking for work, said Rick Merrill, president of Prudential’s central region, which includes the Valley.