Real Estate / Houses

Inside a New York Billionaire’s Mega Deal to Buy John Daugherty — Quail Hunting and Shared Worldly Visions of Houston

Founder of Legendary H-Town Real Estate Firm to Stay Very Much Involved

BY // 12.22.19

Even as he negotiated his own deal with influential billionaire Howard Lorber, Houston’s young condo wizard Jacob Sudhoff urged the chairman of Douglas Elliman to pursue John Daugherty. Sudhoff knew that the largest real estate brokerage firm in New York does not go into a new market quietly.

Lorber would want multiple major splashes. And Sudhoff knew just what a blockbuster getting John Daugherty Realtors would be.

“I told Howard that the level that we do in condominiums is what John Daugherty does in residential brokerage,” Sudhoff tells PaperCity.

The 71-year-old Lorber, who counts the president among his close friends, and John Daugherty, who grew his namesake Houston firm up from a relatively modest start into an iconic Bayou City company with more than 50 years of history and built up trust, almost immediately hit it off.

They talked shared passions — including a love of quail hunting — and found plenty of shared business beliefs.

“Howard and John have a lot more in common personally than I do,” says Sudhoff, who built his own bond with Lorber.

Personal connections are great in business, but this is about building a Texas real estate superpower. When Douglass Elliman acquired John Daugherty Realtors in a deal first reported by PaperCity‘s Shelby Hodge, it shook the entire Houston real estate scene because of the magnitude of what it signified. Now, Douglas Elliman — the bold national luxury firm with the splashy listings, celebrity clients and ultra-connected superstar agents — has both John Daugherty and Sudhoff Companies under its new Texas umbrella.

The sale finalized on Friday evening at a time when most of the local and national real estate press was already wrapped up in the weekend and the approaching holidays. Almost half a day would pass before anyone else caught up to Hodge’s exclusive PaperCity reporting. But the entire Texas luxury real estate scene was certainly buzzing — and scrambling all the while.

Now, PaperCity can give exclusive details on how this mega deal came together and what it means going forward.

First, forget any idea of John Daugherty himself fading into the sunset  — or some retirement life of cruise ships and shuffleboard. This new branch of Douglas Elliman Texas will still carry the Daugherty name and be called John Daugherty of Douglas Elliman Texas. And Daugherty tells PaperCity that he will not be taking on a lesser or ceremonial type role.

“Not at all,” Daugherty says when I ask how his duties will change. “I’ll still be doing all the things I have been doing. They’re going to have to carry me out of here with my feet up in the air. I’m having too much fun to do anything else. Real estate is way more exciting and interesting than anything I could be doing in retirement.

“This is what I love.”

If anything Daugherty sounds energized by the monster deal in this hastily arranged Saturday afternoon call. His still booming laugh often fills the call.

John Daugherty’s New Title

Daughtery officially becomes chairman of Douglas Elliman’s Houston brokerage wing with his right-hand woman (and chief operating officer) Cheri Fama taking on the president’s role. The 38-year-old Sudhoff became the CEO of Douglas Elliman Texas when Elliman and Sudhoff Companies entered into their joint venture.

This gives Douglas Elliman Texas some of the most powerful names in Houston real estate from the jump. The Bayou City joins markets like New York, Los Angeles and Miami as Douglas Elliman epicenters, no small status win for the fourth largest city in America. Houston is still not on the East or West Coast, but that clearly no longer matters.

Houston is impossible to overlook now.

Overall, Douglas Elliman boasts more than 120 offices and 7,000-plus sales associates. Real estate mega firms are more and more the dominant players in the industry. In many cases, it’s find the right Goliath or soon find yourself irrelevant. In some ways, it’s like the wild days of college football realignment and super conference jockeying. If you do not add something special, you’ll be left behind.

Douglas Elliman just added the equivalent of an Alabama and an Ohio State to its new Texas operation in a matter of months.

“This will give our clients some exceptional advantages,” Fama says.

For example? Sudhoff tells PaperCity that every John Daugherty house listing over $1 million will be translated into 22 different languages and advertised throughout Douglas Elliman’s worldwide network.

“Houston’s becoming more and more a city of the world,” Daugherty says. “We need this.”

Built in 1936, the Birdsall P. Briscoe home in River Oaks stands as one of the architect’s finest residences. John Daugherty Realtors handled the sale.

Douglas Elliman’s tech tools and use of analytics help set it apart. This is a very data driven innovator, one built around the belief it can give its real estate agents a clear edge over less technologically advanced competitors. If data has now replaced oil as the world’s most valuable resource, Douglas Elliman could be sitting on the ultimate information boom.

“Not at all. I’ll still be doing all the things I have been doing. They’re going to have to carry me out of here with my feet up in the air. I’m having too much fun to do anything else.” — John Daughtery on if his role will change.

Daugherty insists it was not a difficult decision for him to sell and join Douglas Elliman after more than 52 years as an independent firm. After only a few conversations with Lorber and Sudhoff, he became convinced this was the move to make — and it just became about working out the numbers and intricacies of the deal.

Houston’s New Real Estate Landscape

Houston has changed tremendously since John Daugherty first started his firm in 1967. Now, in many ways, the city and its increasingly high-end real estate market, is entering into a new future. There are well-funded players such as Compass eagerly shaking up the status quo and creating something of a talent arms race. Martha Turner Sotheby’s International Realty, the offspring of another monster deal back in 2014, is not going anywhere. And Douglas Elliman’s eyes for Texas are only growing as well.

Daugherty sees a vision as bold as the one he started with back more than half a century ago in Douglas Elliman. Only, it’s on an even grander, worldwide scale.

“We’re very similar in our DNA and the way we’ve built the business,” Daugherty says of becoming part of Douglas Elliman. “This was the right move.”

Houston real estate will never be the same now that it’s happened. There is no doubt the world is coming to Houston now.

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