Profile: Dorothy Herman
Published by The New York Sun on 2005-02-28
Joe and Louise D'Ambrosio's oldest daughter, who grew up in the modest middle-class community of Syosset, Long Island, now runs the biggest real-estate brokerage and property-management company in the New York area, Prudential Douglas Elliman.
Last year it registered $10.1 billion in sales involving 13,600 transactions, figures that have the firm's agents salivating, competitors fretting, and the city's Establishment welcoming to its rarified rolls -- finally -- an Adelphi University graduate who pushed herself to the top of her game through sheer brass, will power, a shrewd ability to read people, and a preternatural skill in spotting professional opportunities.
This is how lunch with Dorothy D'Ambrosio -- better known as Dottie Herman -- went:
First, she posed for pictures; many of the restaurant's diners -- power players like her, and undoubtedly some having purchased their homes through her company -- stared in obvious admiration at her self-assured elegance.
Then she walked over to a banquette where Klaus Schwab, the founder and executive forum of the Geneva-based World Economic Forum, was eating with Rajat Gupta, a director of McKinsey & Company, the global consultancy, to say a quick hello.
Then she asked questions about the reporter, instantly charming him by characterizing his background as "exotic."
Then she said she'd have only a small salad but then changed her mind when a scrumptious broiled halibut was suggested.
Then she said, "I'm big on vision, I'm big on people. Your business is nothing unless you tend to the people who work with you."
Then she added: "Real-estate -- it's all about creating wealth. That's just the way I sell it."
And all this was just in the first 10 minutes of the interview.
In the 11th minute, she said: "I'm roaring. I believe in success. I love this business. I couldn't do this sort of thing; I couldn't keep these long hours 24/7 if I weren't passionate about it. You've got to go 24/7 just to keep up."
It's hard for a reporter, regardless of his experience with high-profile subjects, to keep up with Dottie Herman. It's hard not to be enthralled by her candor. It's hard not to nod along as she talks about competition being the ethos of New York. It's hard not to agree that owning property these days is like owning gold bullion in days past. It's hard not to be struck by the fact that a typical one-bedroom apartment in Manhattan fetches $521,967, up from 15.6% from $451,632 in 2003, according to a study Ms. Herman cited done last week by Jonathan J. Miller, CEO of Miller Samuel Real-Estate Appraisals -- and that, even at these prices, apartments are difficult to obtain these days. It's equally hard not to be astonished by the revelation that some of her brokers earn commissions in the range of $2 million to $3 million a year.
But this is an interview, and not a charm session -- the sort that Ms. Herman regularly conducts with potential clients and with her 3,000 sales agents and 650 employees servicing Manhattan, Brooklyn, Queens, Nassau, Suffolk and the Hamptons.
So the reporter asks: "Well, what drives you?"
Dottie Herman doesn't miss a beat.
"It's what happened to me when I was 10 years old," she said.
That was when Joe D'Ambrosio, who worked for New York City, had taken Dorothy, her mother, and her two younger siblings Diane and Edward, on a skiing trip to Vermont. On the way back to Syosset, the car skidded, and when Dorothy came to, she found herself in a hospital. She learned that her mother had died in the accident.
"When a girl loses her mother at 10 -- that does something to you," Ms. Herman said. "It was traumatic, it was a defining time."
She resolved that she would make something of herself, even at that terribly tender age. Her father was incapacitated for nearly a year. Her siblings looked to her to be a surrogate mother. She took odd jobs, she sent herself through college, majoring in finance, and she began dabbling in real-estate.
She had become a mother at 19, which meant that she needed money.
"I grew up seeing how other people looked out for us -- I've never forgotten that," Ms. Herman said. "Maybe that's why, regardless how aggressive I may be in my business, I always look out for people who work with me."
That quality -- her perceptiveness about other people's sensitivities and needs -- was recognized by others early on. It may have explained why she was hired by Merrill Lynch at a time when the giant financial-services company was still in real-estate and looking for bright young people to thicken its bottom line. It may have explained why, when Merrill abruptly decided in 1987 to dispose the real-estate division in order to concentrate on its hard-core financial services, and sold the real-estate operations to Prudential, Ms. Herman was able to persuade the new owners to sell her the business.
It happened this way. One of her colleagues, Fern Karhu, who'd mentored Ms. Herman, and who'd seen how hard she'd worked traveling around America in behalf of Merrill and then prudential, said: "Why don't you ask Prudential to sell the business to you?"
"But I don???t have any money," Ms. Herman said to Ms. Karhu (who now works for her at Prudential Douglas Elliman).
"Oh, you'll get it," was Ms. Karhu's response.
Dottie Herman indeed got the money -- $9 million -- from Prudential.
"In effect, they financed my purchase of their company," Ms. Herman said.
But surely, the reporter asked, not without some skepticism, surely the decision-makers at a big company such as Prudential didn???t just go out and give her money without any expectations?
"They expected that I would do well in the business -- after all, I had a very good record," Ms. Herman said. "They -- "
Then she stopped before she completed the sentence, smiled, and said:
"I was pretty brazen. If I want something, I ask for it. At the same time, I never compromise myself. There are successful women out there who try and act like a man. I don???t. I'm a woman. I like being a woman. I don???t act like a man."
If not acting like a man means not being ruthless, relentless and ambitious, then Ms. Herman's competitors -- such as the Corcoran Group -- may have a thing or two to say. She's frequently accused of poaching, of cajoling top performers in rival companies to jump ship, luring them with signing bonuses and other emoluments. Indeed, several of these rivals had, shall we say, somewhat uncharitable things to say about Dottie Herman's style.
"Does that bother you, what some people say about you?" the reporter asked.
The subtext of what he was asking was that New York can be a pretty mean city, where selling real-estate is often the gauge of a person's very essence.
"Look, I'm in this business to make money," Ms. Herman allowed. "You'll always have competition. But I don't focus on my competitors. If some else is successful, I wish them well. I believe in generating positive energy, not negative energy. And if I don't have something nice to say about somebody -- well then, I don't say it."
The reporter thought her comments stretched credulity.
"Even in such a brass-knuckle business, generating billions in sales each year, you wouldn't hit back at your rivals?" he said.
Ms. Herman wasn't ruffled.
"I don't think that there are too many out there who're better at doing what I do," she said. "I'm not an angel, but when you run a company as large as the one I do, then your focus has got to be on your daily operations. I'd much rather concentrate on my own staff and their concerns. I believe that if people fail, they fail for one of three reasons: they don???t do their job; they don't know how to do their job; or what they think the job is differs from what you, as their employer, think the job is. That's why I meet often with my staff so that we're all on the same wavelength."
[It's not that Ms. Herman is incapable of being testy. Yesterday, her public-relations representative, Barbara Wagner, reported that Ms. Herman was "uncomfortable" at the prospect that the reporter would be using her maiden name in this article. Dorothy D'Ambrosio became Dottie Herman when she married Jay Herman, a successful lawyer.]
Those who've had operational dealings with her say that Ms. Herman's private persona reflects that of her public demeanor. One such person is Mr. Miller of Miller Samuel.
"Dottie's full of energy, she's very upbeat about her company and about real-estate in general," Mr. Miller told The New York Sun yesterday. "What I like most about her is that she respects you as a professional -- and she leaves you to do what you do best."
That sort of professional respect can be a smart business strategy, especially when you're CEO of a company that, in addition to being the region's biggest real-estate brokerage, is also the largest residential real-estate management company in the New York metropolitan area. According to Daniel Kaplan, Ms. Herman's CFO, the company's division, Douglas Elliman Property Management, manages 45,000 units in a portfolio of 240 buildings.
And, Mr. Kaplan said, Prudential Douglas Elliman provides a full compliment of mortgage and title services through its affiliated companies, Preferred Empire Mortgage Company -- one of the top 10 mortgage companies in New York State -- and Liberty Land Title Agency.
And how did Dottie Herman get into Manhattan from Nassau and Suffolk Counties, where her Prudential real-estate company was flourishing as Long Island's biggest property brokerage?
"Manhattan had always been on my mind," Ms. Herman said.
Once again, it was her brio and brashness that enabled her to persuade Howard Lorber -- whose investments include Nathan's Hot Dogs -- to become a partner in the acquisition of Douglas Elliman. The eponymous firm was founded in 1911 by Elliman, who died in 1972; he was responsible for erecting 998 Fifth Avenue, the fabled building that housed legendary diplomat Elihu Root, and various Astors and Guggenheims. Today, its occupants include Steven L. Rattner, chairman of Channel 13 and a founder of the investment bank, the Quadrangle Group. Ironically, Elliman started his company in a basement store at 421 Madison Avenue, not far from Dottie Herman's offices at 575 Madison Avenue.
How much did the acquisition of Douglas Elliman cost?
"Nearly $72 million," Ms. Herman said. "That's not a bad figure, is it?"
Not bad at all, and there's more to come.
"I always had this vision of becoming the leading real-estate broker on Long Island and in Manhattan -- and to exceed my customers' expectations," Ms. Herman said.
That is why, for example, she personally pays special attention to her company's Web site (www.prudentialelliman.com) because, more and more, customers expect a real-estate brokerage's Internet presence to be richly detailed and easy to navigate. "You've got to be at the leading edge of technology and communications in this business," Ms. Herman said. "Potential customers often look you up on the Web long before they've met you or your brokers."
That is why, for example, Dottie Herman is paying attention to the forces of globalization. She already has projects in Florida, Cayman Islands and the French part of St. Maartens. She's establishing a presence in London. She's been talking to the Japanese. What's that saying -- today, Manhattan, tomorrow, the world. It seemed to the reporter that for Dottie Herman the future had already arrived.
If that was the case, he asked, then wasn't it all a bit heady, a somewhat ego-bloating, swell-head inducing sort of thing?
"Hopefully I???ll never let it go to my head," Ms. Herman said. "I don't see how you can be in a people-oriented business and let success go to your head. It's one thing to be highly motivated, to be aggressive even. But I'm just not the kind of person who'd allow herself to be swept away by her headlines."
She seemed to soften a bit at this point in the conversation, she seemed to the reporter to be decelerating a bit.
"You know, I believe in defining moments," Dottie Herman said. "My mother's death was a defining moment. It made me learn to be independent. Working for Merrill Lynch was a defining moment -- because I learned such a lot there. Buying my first company was a defining moment. Acquiring Douglas Elliman was a defining moment, because it brought me into Manhattan. Defining moments help you to grow. They strengthen you. My defining moments have helped me to do what I love doing most."
The reporter thought: She began as Dorothy D'Ambrosio in Syosset, and now here she is, as Dottie Herman, at the pinnacle of worldly success in Manhattan. What a long, strange trip it must have been.
Senior Writer and Global-Affairs Columnist