The inner politics of luxe brokerage Hilton & Hyland received a public airing this summer, when The Real Deal reported that its star agent Drew Fenton filed papers to start a new residential agency.
Then the Beverly Hills-based firm experienced a second shakeup as its well-regarded general manager Billy Jack Carter left the company Sept. 2 after an eight year run. Carter had no other job lined up. It has not been confirmed if the two events had a connection.
The summer’s developments follow a Hilton & Hyland setback in February when Jeff Hyland, its popular and well-respected co-founder, died from cancer, sparking questions of succession.
The current state of affairs leaves a lot of unexplained threads at the high-profile brokerage that has worked some of Los Angeles’ biggest deals in the past 20 years. One source at the agency said the mood around the office is “quiet” and described it as a wait-and-see moment.
Fenton’s registration papers for a new brokerage, named Carolwood Partners, remain active with the California Secretary of State. Meantime, Fenton continues to be listed as a Hilton & Hyland agent on the firm’s webpage.
Hilton & Hyland also continues to be listed as Fenton’s responsible broker on the state of California’s Department of Real Estate records. According to the Hilton & Hyland website, the boutique brokerage’s annual sales volume is $4 billion and its average price per transaction is $6.87 million.
A source familiar with the firm said that Fenton’s situation is still up in the air. There’s a chance he could stay with the company where he has worked since 2007. He could also make good on plans to hang his own shingle. Hilton & Hyland has not given any indication that it will sever ties with Fenton.
There have been rumors that Fenton had been interested in an unspecified leadership role at Hilton & Hyland, added the source, who requested anonymity.
The source also noted that the players involved are taking on risk. Hilton & Hyland co-founder Rick Hilton risks looking indecisive by retaining an agent who has filed official documents to start what may be a competing company.
But if Fenton does not go forward with starting his own agency, he risks upsetting the people listed as his colleagues in registration papers for Carolwood Partners. Those colleagues were Hilton & Hyland marketing director Ed Leyson, who was listed as a managing member of the entity; and Nick Segal, a veteran brokerage executive who currently serves as Southern California managing director for startup Avenue 8.
In an Aug. 19 story which broke news that Fenton filed papers to start a new brokerage, both Avenue 8 co-founders Michael Martin and Justin Fichelson were aware that Segal was involved with Carolwood Partners. A request for comment sent to Segal was not returned. A Hilton & Hyland representative declined to comment for this story.
If Fenton and Hilton & Hyland part ways, and the brokerage loses a star, it does not mean the end of the company, said Eric Sussman, adjunct professor at UCLA Ziman Center for Real Estate.
“I’m not aware of any individual agent’s departure which had led to serious repercussions for a company. That’s not to say that there isn’t pain. There’s no question that losing a star player is challenging for any firm. But it’s not a death dagger,” Sussman explained.
No law has been broken by Fenton preparing to start a new company, according to Scott Talkov, president of Riverside-based Talkov Law. But according to case law, an agent breaks civil law when the agent actively solicits business for a new company before resigning from his or her old brokerage.
Agents leaving a company also have to deal with intellectual property issues, Talkov said. There are no legal issues for agents taking client relationships to a new shop. However, individual listings are considered property of the brokerage, even if the agent put together a deal, he said.
Drew Fenton claims $5 billion in career sales, according to his website. Some of his significant deals include working on the $150 million closing for the Chartwell Estate in Bel Air in 2019, along with then Hilton & Hyland colleagues Jeff Hyland and Gary Gold. Fenton also worked on major deals for the Playboy Mansion, the Frances Brody Estate and the Doheny Estate.
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