By Gabriel Sherman

October 24, 2004 | 8:00 p.m

On

Oct. 18, Michael Shvo, the top-grossing broker for Prudential Douglas Elliman who recorded more than 400 transactions topping $300 million in sales in 2003, announced his resignation from the real-estate giant. His name has been removed from Douglas Elliman’s Web site and his office number disconnected. Immediately, rumors swirled through corridors of the highest echelons of Manhattan’s tight-knit—and hyper-competitive—real-estate world. Mr. Shvo’s announcement comes as he is leaving the 2,000-broker firm to launch his own company, the Shvo Group, which will employ his current 27-person staff and wade into the upper strata of Manhattan real estate. Moreover, he plans to offer consulting services to developers on new construction—an increasingly profitable area for brokers. “I had a phenomenal year, and have been involved in many new developments. I feel there is a place in the market for a new player. A much younger player. Someone who is connected with the buyer,” Mr. Shvo told The Observer. “I wanted to branch out on my own.” Mr. Shvo said he had been contemplating the decision for the past several months, and retains an amicable relationship with his former employer following his departure. “I think in light of everything, people need to do what they need to do. I have a good relationship with Michael, and wish him the best of luck,” Douglas Elliman chief executive Dottie Herman said. At the upper strata of Manhattan real estate, where $10 million deals are common, Mr. Shvo’s departure caps several weeks of speculation and rumor-milling. One high-placed industry source, who spoke to The Observer on condition of anonymity, said Mr. Shvo left the firm due to a complaint filed by the Corcoran Group to the Real Estate Board of New York in the spring, claiming ethics violations on the part of Mr. Shvo. “His actions were detrimental to a new development project in Tribeca,” the source said. Steven Spinola, the president of REBNY, declined to comment on complaints filed by a REBNY member or a ruling by the organization on potential complaints. “We don’t comment on complaints. What we do has to do with our own internal policing of our members. We get complaints and we deal with them,” Mr. Spinola said. When reached for comment, Corcoran’s president and C.E.O. Pamela Liebman declined to comment on Corcoran’s REBNY filing, but said: “I believe every broker has a responsibility to buyers, sellers and fellow brokers to maintain ethical standards and principles that allow this business to function smoothly in the best interests of all parties. We in the industry rely on REBNY to enforce these policies and apply them equally.” Both Mr. Shvo and Ms. Herman batted away talk of a forced departure. “There was a complaint. But it has nothing to do with Michael’s decision,” Ms. Herman said. “Douglas Elliman never asked me to leave. One thing has nothing to do with the other. This decision is something I’ve been working on for the past year,” Mr. Shvo said. “This announcement is not a new thing. It has nothing to do with REBNY. Last year, I was the top producing broker in New York, and there are always going to be rumors, and people are always going to talk. “It’s jealousy,” Mr. Shvo continued. “I couldn’t have been doing the business I’ve been doing, the hundreds of millions of transactions, if I didn’t have great relationships with people in the brokerage community. This is not a business where you play by yourself.” With the launch of the Shvo Group, the Tel Aviv–born former stock broker seeks to replicate his meteoric rise at Elliman, which included netting more than 400 transactions last year, including 30 condos in the Time Warner Center, along with marketing listings like the $19.99 million Sky Studio at 704 Broadway, the triplex loft owned by Israeli investor Jonathan Leitersdorf that served as the backdrop for an episode of Sex and the City, as well as Jerry Seinfeld’s wedding. In August 2004, Donald Trump told the Jerusalem daily Haaretz: “Shvo is an amazing agent. He is young, energetic and very smart.” Still, some industry insiders say part of Mr. Shvo’s hard-driving style that served him well in closing big-ticket sales also fermented friction with other brokers. “[Michael] is very smart. He sees a global perspective, but he’s volatile,” one Elliman broker said. “Michael is an extremely smart man; sometimes his desire for growth and desire to succeed almost escapes him. He was his own worst enemy sometimes,” said Paul Purcell, the former president of Douglas Elliman who now runs his own relocation and consulting firm, Braddock and Purcell. At Elliman, Mr. Shvo operated virtually as a unique entity within the company, managing a staff of more than 20, which will now join him at the Shvo Group. Some industry watchers wonder how the Shvo Group will fare without the marketing apparatus and infrastructure that giants like Corcoran and Elliman bring to the marketplace. “We spent millions of dollars each year to communicate the Douglas Elliman name. It’s incredibly hard to compete with power houses like Corcoran and Douglas Elliman. That’s why brokers stay with firms,” Mr. Purcell said. “Being a broker is the best secret in the world if you want to be a small business owner. The large firms pay for legal advice. They provide your marketing. And they pay for your H.R. costs. Michael will now get to experience firsthand what it’s like running a company.” Which is exactly what Mr. Shvo wants. “I’ve been operating as the Shvo Group for a few years now,” he said. “I decided it was time to branch out on my own. There are lot of great things to be done in real estate.”