Ryan Serhant of 'Owning Manhattan' leans into commercial real estate

A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox. It’s not often you see a brand new business model in an industry as old as residential real estate. Sure, marketing strategies have evolved with new technology, and commission and pricing structures for agents have shifted to be more competitive. But real estate companies are generally in business to sell properties. Not according to Ryan Serhant, founder of his namesake real estate company. He’s also the executive producer and star of a Netflix reality show, a social media influencer, author and teacher. “We’re not selling property. We sell the people. The agent is our customer every day,” said Serhant, who sat down for the Property Play podcast at his SoHo, New York, headquarters. That means letting his agents lean into what they want – including commercial real estate, which he said is about 10% of his business now but is quickly expanding. That includes multifamily residential buildings. “We’re seeing the money come from people that have never touched commercial real estate before, because in certain parts of not just this city, but parts of Florida, parts of the Carolinas, there is, I think, a price stabilization that has come from just excess debate and thought process,” Serhant said. “And now, honestly, we’ve got three years of high rates. So a lot of these owners, if they’re sitting on adjustable mortgages, if they’re trying to figure out what to do, they’re kind of starting to get realistic for the first time. And so buyers are coming in and pouncing on things.” In his popular Netflix show, “Owning Manhattan,” Serhant purposely highlights a storyline with an agent who is determined to sell a trophy commercial property as an event space on Park Avenue South. Even in the much-beleaguered office sector, he said he wants to capitalize on what he sees as a strong recovery. “Two years ago, we spent a lot of time talking about the difference between tenanted and vacant space, so they might have a lease, but they’re not actually showing up,” he said. “You had really, really dark buildings, but they were fully leased up. Today, you have people coming and going. You can see the traffic, the subway, the restaurants. It’s incredibly, incredibly busy.” Serhant said he sees it all as part of the real estate “ecosystem” he’s building. “We help you where you rent, where you buy, where you work and everything in between. And I think people are looking for consolidation across services, and I think we can provide that in a way that other real estate firms just can’t,” he said. On the residential side, Serhant recently criticized his rival Compass, after it announced the acquisition of Anywhere Real Estate, increasing its agent count dramatically. “Scale does not automatically equal better outcomes,” Serhant said in a video he posted on LinkedIn . “Consolidation doesn’t equal innovation.” He elaborated on that in our conversation. “I think Compass has made, obviously, a very, very big and public bet on saying engagement is the by-product, to bring consumer mind share to a property platform so they can take down Zillow. That’s what they want to do, because Zillow gets to take all the inventory and sell leads back to all the agents with none of the operating expense. That’s why they trade at a higher multiple. They have higher gross margins. And I totally get it and I’m all for that battle, and they should go and do that. We operate very, very differently,” Serhant said. He said he prioritizes tools that help agents have more time to connect with their clients, like his S.MPLE artificial intelligence platform, which automates administrative, marketing and transaction management tasks. The technology doesn’t seem to scare him, and he scoffs at the recent stock routs of commercial real estate companies over AI fears. “AI’s been a huge part of our process from the beginning. I’m a salesperson. If I can use technology to sell property to anyone, anywhere, on any device at any time, I will take that opportunity,” he said. He is also leaning heavily into branded residences, like the Mercedes Benz residences in Miami. Serhant, along with JDS Development Group, a U.S.-based real estate company, announced in March 2024 that they had sold 100 units in the 67-story, mixed-use residential project in Brickell in just four days. Serhant is a big believer that brands go far beyond the actual product itself. “It tells the buyer that there’s certainty of the product. You have connected your brain with luxury when you think of Mercedes, since the 1940s, so it’s still luxury,” Serhant said. “We have people show up from Egypt, and they come with their Mercedes key chain, and they have a Mercedes hat on, and they tell us stories about how they were little kids and they grew up poor. They saw someone go by in a Mercedes Benz, and since they were 8 years old, that, to them, said they’ve made it. So the opportunity to buy an apartment in the first Mercedes-branded residence in North America isn’t even a question.” Last month he launched sales of the first Roche Bobois branded residence in St. Petersburg, Florida, saying it would be sold out “in a matter of weeks.” He also said branded properties could be a strategy for commercial real estate as well. The Serhant brand, however, is his primary focus. Social media photographers swarm his offices on any given day, and he gave a very coy smile when asked if there will be a season three of “Owning Manhattan.” “‘Owning Manhattan’ is a founder’s journey more than anything, right? It’s kind of the ‘me against the world and see what’s going to happen’ and going through the hiring and firing process and the beautiful New York City,” Serhant said. “And, yeah, it’s been a massive global megaphone for me to put out to the world that we’re building something differentiated in the marketplace.”