Dottie Herman is president and chief executive officer of Douglas Elliman, New York’s largest residential brokerage. The firm—which also has offices on Long Island, the Hamptons, Westchester, South Florida, Connecticut, Aspen and Los Angeles—reaches international buyers through its global alliance with London-based Knight Frank Residential.
Ms. Herman, who has more than 30 years of experience in the real estate business, started as a broker with Merrill Lynch’s Long Island real estate division. In 1989 she bought Prudential Long Island Realty and expanded the company into the Hamptons. She later bought Douglas Elliman with Howard Lorber, who became her business partner and is Chairman of Douglas Elliman.
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In 2016, Forbes named Ms. Herman America’s richest self-made woman in real estate.
We caught up with Ms. Herman to talk about her favorite luxuries (views and comfort), a major Hamptons house that got away and much more.
Mansion Global: Describe your dream property.
Dottie Herman: It would be on the ocean, with lots of glass and sun—contemporary and clean. I like something that’s great for entertaining but not too formal that people need to take their shoes off.
MG: Do you have a real estate property that got away?
DH: There are many. In the ’90s, I found a foreclosure on the ocean in Bridgehampton that was 1-year-old. It was 6,000 square feet and cost $750,000, but my accountant told me I could only spend $450,000 so I passed it up. Now it’s worth $20 million.
When I first moved to Manhattan, there was an apartment overlooking Central Park South. It was about 1,800 square feet and was selling for $1 million and renting for $7,000. I decided to rent it. I could have gotten it from the owner for $900,000, but everyone told me not to buy there, that there were no schools and it was too touristy in that area. The Time Warner Center then went up and changed the whole neighborhood. Two years later it sold for $4 million and now that apartment’s worth around $25 million.
That’s just reflective of everything that happens in real estate. You have to be able to hold something. The people who make the most money are the ones who take a shot when everyone else is not. If you can afford to keep it and even rent it out, that’s always a good idea.
MG: What does luxury mean to you?
DH: It’s different to everyone. But to me, luxury is having that magnificent view—whether it’s of the city or the water. Luxury is outside space if you’re in the city.
But it’s not about having the biggest home, necessarily. I live a hectic life, so home has to be where I can be me, somewhere I can unwind, that feels comfortable.
The first thing I do when I have a new home is put the best speakers in, because I love music and have to have it.
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MG: What area do you think is the next hub for luxury properties?
DH: In New York City, the Lower East Side has really come up. It’s still cheaper than a lot of the city, but it’s changing. Battery Park has already changed. The development of Hudson Yards will make that area change, too. Developers are building neighborhoods that reflect what millennials want. They like to be connected.
In West Palm Beach in Florida, we’re seeing a lot of development coming back. Luxury buildings have apartments that are selling for $20 to30 million. Part of it is that there’s no land left in Palm Beach. And they were smart and built bridges that go from Palm Beach to West Palm, which you can bike, skate or walk on.
MG: What’s the biggest surprise in the luxury real estate market now?
DH: Out in the Hamptons, and in L.A., places that are just not vertical, you’re seeing vertical building.
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MG: Where are the best luxury homes in the world and why?
DH: I asked Knight Frank this question, and they said London, Paris, New York, Seattle, Los Angeles., Geneva, Singapore, Hong Kong, Dubai and Sydney. And there are emerging markets like Moscow, Shanghai and South America. But of course there are holiday markets, too—the South of France, the Hamptons, Miami, the Alps.
In Toronto, in particular, value is going up 30%. Los Angeles and San Francisco are coming into play and becoming much more international, too.
MG: What’s your favorite part of your home?
DH: In Southampton, I have a center island and a bar with stools. I also have a pool and tennis court that face south. I like just hanging out there. And I love the flowers and plants.
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MG: What best describes the theme to your home and why?
DH: My house is modern Hamptons. It’s not ultra modern, though, and you’d know it’s a lady’s house. I love shoes and you’ll never see me without high heels. Most of my art is of shoes. And I collect miniature shoes.
MG: What’s the most valuable thing in your home?
DH: Don’t get me wrong, I like nice things. But I’ve collected things from people who are close to me. I have albums that we listen to when I’m with my friends from high school and college. What’s really valuable to me are my friends and our memories.
MG: What’s your best piece of real estate advice?
DH: There’s no bad time to buy. You want to be happy in it, but you also want to make sure you have some analysis and can make a good investment.
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MG: What’s going on in the news that will have the biggest impact on the luxury real estate market?
DH: Before the [U.S.] election, people were holding off buying but it’s picked up again.
I don’t think the politics at the moment have anything to do with whether someone buys a house or not. Even interest rates going up aren’t likely to affect the luxury market. I don’t think they’ll go up enough to do much. And expected revisions of Dodd-Frank will likely make it easier for some people to buy.
I’m not seeing anything right now that’ll be harmful to real estate.
MG: What is the best area now for investing in luxury properties?
DH: There’s no investment that’s a guarantee. You need to look at neighborhoods with new developments and infrastructure going in.
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MG: If you had a choice of living in a new development or a prime resale property, which would you choose and why?
DH: In the city, I’d take new. I like new because it’s gonna be your taste and you can just move in, and in the city my life is so busy and hectic that I don’t want to take the time to renovate.
MG: What area currently has the best resale value?
DH: When New York got hit by the recession, we got a black eye, but we didn’t get killed. Places like Vegas and Atlanta, parts of Miami and Detroit, they got badly hit. Now it looks like they’re appreciating much more than other cities, but it’s just that they were so depressed.
That said, Vegas and Atlanta are really changing a lot and there’s opportunity there. There are places all over the country that are good little pockets. You need to look at emerging markets, too.