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VOL. 126 | NO. 121 | Wednesday, June 22, 2011

Crye-Leike To Close Midtown Branch

By Sarah Baker

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Crye-Leike Realtors Inc. will close its Midtown office by mid-July in efforts to cope with depressed market conditions and improve operating efficiencies, the firm announced Monday, June 20.

The two-story office at 2220 Union Ave. was built in 1973. Harold Crye and Dick Leike – the cofounders of Crye-Leike – bought the site in 1986 and opened an office there. The property was sold as part of a portfolio in 2005, but Crye-Leike remained in the location by leasing from its new owners.

The current lease expires July 15, making that a good time to close the doors there, said managing broker Pat Lichterman.

“We’re not obligated, our lease is out on this building, so that’s the logical choice,” Lichterman said. “The market is off everywhere, there’s no surprise there. Home sales are picking up, but the prices are not picking up. It’s a good business decision not to be paying lease on a building when you’ve got other offices that are tied into a lease.”

Crye-Leike general manager Steve Brown met with agents of the Midtown office Monday morning. The decision, finalized Friday, June 17, was reached as a result of economic viability, Leike said.

“Those agents worked hard under very difficult market conditions and understand the current business climate,” he said. “We don’t like doing this, you don’t like to have to let people go, but when the economy’s in this kind of a situation, we just have to.”

Leike said all 28 agents have indicated that they will stay with Crye-Leike by joining with one of the company’s 16 Memphis-area locations, including the firm’s branches at 8 S. Third St., 585 S. Perkins Road and 6525 N. Quail Hollow Road, where the company is headquartered.

Lichterman will join the latter, stepping down as manager for personal reasons and instead focusing solely on selling real estate. Besides Lichterman, Crye-Leike’s Midtown location employs one full-time support staff member who the company plans to transfer to another local office.

Crye-Leike planned to relocate its Midtown branch to a parcel of land it owns at the intersection of Madison Avenue and Barksdale Street – where Anderton’s restaurant once stood – but was hindered by a cautious and conservative lending environment, Leike said.

“The financial markets haven’t been such that it’s a good time to be able to build a new building,” he said. “It’s very difficult to go out and get a construction loan to build and their requirements today are more down payment, which makes it tough to do in these tough economic times. We would like to build an office there at some point, but it’s got to be economically feasible to do it.”

Crye-Leike does not plan to close any other locations, Leike added, but the firm will continue to evaluate its individual offices on a regular basis.

The firm has maintained its standing as the largest residential real estate firm in the city and the sixth largest nationally, despite sales being considerably down from summer 2007 levels. Since then, independent contractors have gone from about 4,000 to 1,200 in the Mid-South. In Memphis alone, the firm has 833 agents, down from 898 at this time last year.

While Crye-Leike has maintained its market share here in Memphis – with the recent acquisitions of Coleman-Etter, Fontaine Realtors and French & Co. – the market itself is drastically smaller than where it used to be, Leike said.

In 2008, Crye-Leike closed its offices at 1396 E. Shelby Drive in Whitehaven and at 3634 Austin Peay Highway in Bartlett – marking the first time in the company’s history to shut down branch operations. As is the case with the Midtown closure, agents at those branches were consolidated into nearby Crye-Leike locations, but not all employees survived the closures.

“When we started seeing sales start not meeting projections and falling behind the previous years, we started doing a number of things – consolidating some offices, reducing the size of offices,” Leike said. “If you’re not doing the business like you were in 2007, you don’t need as much staff.”

PROPERTY SALES 56 56 9,658
MORTGAGES 49 49 10,665
BUILDING PERMITS 212 212 21,170
BANKRUPTCIES 49 49 6,157