President and CEO of Douglas Elliman Real Estate
A self-described Cinderella story, Dottie Herman’s path to creating the fourth largest real estate company in the country is replete with hard work and determination. The President and CEO of Douglas Elliman chronicles her journey to success in one of America’s most ruthless cities, from hosting her weekly radio show to taking a $75 million loan she had no way of paying back.
NAWRB: How did you get to where you are today, head of one of the largest real-estate companies in America?
Dottie Herman: About 15 years ago, I was running a 40-office company on Long Island and the Hamptons. I saw the evolution of public companies and thought, “I’m not going to be able to compete with that without a partner.” My attorney then introduced me to Howard M. Lorber, who became my partner. Within a year, we were offered a substantial amount of money for the company.
I told Howard I didn’t want to sell. He asked me, “Are you crazy?” I said, “No, I really feel we should expand into the City because there are no companies from Manhattan to Montauk and I feel strongly about creating that.” He looked at me and said, “Well, I think that’s nuts, but if you really want to do this, and you really want to put it all on the table and open up in the City, then I’ll go along with you.”
So we turned down the offer, and pursued finding companies in the City. We ended up buying the number one firm in Manhattan, Douglas Elliman, from Insignia a year after 9/11. My banker said to me, “Are you crazy and am I crazy to lend you this money?” I said, “Let’s just go with it.” And, of course, that’s what we did. I made the announcement about our company the day President Bush announced the war in the Middle East. I stood in front of 1,600 brokers from New York City who asked what my credentials were. I said to them, “I’m a broker so I know what it’s like to wake up and not know where your next deal is. I don’t believe in getting respect because you have a title, I believe in earning respect. All I ask is that you give me an opportunity to earn it.”
I liked the competitiveness of the City and I got good media coverage. I don’t believe anything ever happens alone. It was a joint effort and, together with Howard, we really built a wonderful company and connected the dots from Manhattan to Montauk. I could not have done that without everyone’s help. They stuck with me and we built a family. I believe strongly in company culture. Everybody was important. It didn’t matter what your job was, everybody contributed something.
When we went into the recession, it was really tough for us, everything stopped and our expenses were high. Every night after work, I sat with our CFO and a couple of my managers who were good with finances, and we made a million cuts. Then I said to everyone that we could either let people go, which I preferred not to do, or we could all take a cut in salary. Everyone pulled together and unanimously agreed to take cuts in salary. We didn’t have to let anyone go and at the end of the day we got through a very tough time together.
NAWRB: Why did you get involved in ownership in the real estate industry?
Dottie Herman: Before I met Howard, I worked for Merrill Lynch back in the ’80s, and I loved that company. I learned a lot from them and had a pretty big position for somebody my age. I was probably about 30. Merrill announced they were selling the real estate division and my job was to keep my area together until they found a new buyer. A year later they found Prudential. However, Prudential didn’t want to have a national company like Merrill Lynch. Instead, they wanted to franchise it and that’s when I decided to buy it. I said to my colleagues, “I’m buying this company, so let’s stick together because together we’re strong.”
They knew I didn’t have the money but they wanted to stay together. Their spouses came in and helped me write business plans and I started making calls to banks who said, “What are you crazy? We wouldn’t lend you money for one office, let alone a company like that.” And then they hung up on me. So, I basically wrote a letter to Prudential telling them I had the money as well as venture capital money, which I didn’t, and they ending up lending me the money.
A few weeks ago, I spoke to 35 of the wealthiest Japanese bankers and entrepreneurs and they asked, “Okay, what’s the real story? Nobody lends money to someone who doesn’t have any way of paying it back.” I said the real story is that I asked and I was just lucky that they believed in me. That’s how I started. At that time if I had $1,000 in the bank it would have been a lot. That doesn’t normally happen and people say it sounds like fiction, but it isn’t. I have a sign in my office that says, “Success is failure turned inside out.” If you’re afraid to fail, you’ll never succeed.
The worst that can happen is someone says no. But I think a lot of people are afraid to fail, or can’t handle rejection, so they don’t even try. People who never fail have never tried anything, but the people that are successful failed many times. Successful people pick themselves up, maybe have a good cry, and then get back in the ring. I learned at a young age not to be afraid of failing and I think that’s a big part of what holds people back. They listen to others tell them they’re not going to make it. I can’t tell you how many people told me I’d never be where I am today.
NAWRB: You host a weekly radio show every Saturday. Is this something you have always been interested in or was your involvement in radio serendipitous? What is your favorite aspect of or the most interesting thing you have learned being a radio host?
Dottie Herman: About seven years ago, the manager of WOR radio called me up and said, “You should do a radio show!” I said, “You know, I work 24/7 and I don’t think I have time.” He thought it should be a two-hour call-in show and I thought, “Two hours? I can’t talk for two hours.” I told him I’d give it a whirl. I put together a team, including a finance guy and a real estate attorney. They were all my friends and I said, “You’ve got to do this with me.” We started and we just talked about different real estate things.
The show addresses anything that has to do with real estate. I’m still doing the show because it’s a service; we provide answers to very complex questions. There’s a lot that goes on in real estate. The internet is not always accurate and the advice can be very “cookie-cutter.” What we offer is a lot more personal.
I’ve tried to really build an audience where attorneys and other professionals listen to the show. Sometimes a caller will have a problem and somebody else will call in with an answer. I write the show myself and really enjoy doing it. It’s been seven years now and the show is every Saturday from 10 a.m.-12 p.m. It’s become pretty big. I built the radio show like we built our company—it’s become a family and people thank me all of the time for what the show provides.
NAWRB: What has been the meaning and importance of philanthropy to your life?
Dottie Herman: I think it goes back to when I was a little girl. My mom died when I was 10, and I was the oldest of three. There were neighbors and my girlfriends’ mothers who would help. If I needed my hair fixed they would do it for me. Sometimes they would come and make breakfast for the three of us. I look at all the people in my life that have really helped me and they all did it because they were good people. When I started doing things for people they would ask, “How can I pay you back?” I would say, “The way to pay me back is to do something for somebody else.” That’s how the circle goes around.
Charity is very personal to me. I had a call from Saul Katz, who was the CEO of Long Island Jewish Medical Center, and his wife, Iris, who is from the Wilpon family that owns the NY Mets. I’ll never forget it and couldn’t figure out why they wanted to speak to me. Iris said, “You know, Dottie, my husband’s the CEO of a hospital and I’m a Wilpon; I get the best medical care possible and I want all women to have that care. We are going to start a women’s hospital because women don’t take care of themselves, they’re always worrying about everybody else first.” And, that’s what we did. It was their vision 12 years ago and I’ve been a part of it ever since.
Katz Women’s Hospital at Long Island Jewish Medical Center is not just a hospital that serves women in that area, it serves all women. They’ve hired doctors who specialize in women’s health because women have different issues from men.
NAWRB: One of the things we do in our magazine every issue is champion an article about women’s health from the City of Hope. We would love to feature an article from the women’s hospital in one of our upcoming issues.
Dottie Herman: I’ll make that happen for you. I think the story of the hospital is a really beautiful story. Another organization I’m deeply involved with is the American Heart Association. It’s very important to make women aware of heart disease, which is the number one killer for women.
NAWRB: What keeps you motivated? In an interview with The Real Deal, you stated you purchased Douglas Elliman because you weren’t done. Do you think there will ever come a point when you feel you are done?
Dottie Herman: I love doing what I do; it’s not a job for me but a passion. My story is like a Cinderella story in that I worked hard and beat a lot of odds. I think that when you hit a bump in the road you’re supposed to do something with it. So, becoming successful and running a huge real estate company to me is the vehicle. I have a lot of people write to me, especially women, who say, “You’re an inspiration.” That’s what keeps me motivated.
NAWRB: You were recently recognized by Crain’s New York Business as one of the Most Powerful Women of 2015. Throughout your life and career, has there been a moment or achievement that is particularly special to you?
Dottie Herman: Well, when I had my daughter, that was a big moment in my life! There have been so many other things, I can’t decide on one. My biggest achievement is probably the company that we’ve built, and I say we because you can’t build a company alone, as well as the culture of the company. It’s like a family. I think that’s really special; to do what you love, to be passionate, and to work in a place and with people that you really love is rewarding. You know, we have our days, nothing’s perfect, but in the end, I think everyone is always there for each other.
NAWRB: What advice do you have for entrepreneurs about not underestimating their potential?
Dottie Herman: I’m somebody who always has to go to the next level and it’s really been a journey. Although it’s cliché, my stationery says, “Life is a journey, not a final destination.” Most people are capable of more than they imagine—if you’re passionate and love something, go for it.
NAWRB: What do you do on a day when work isn’t on your mind?
Dottie Herman: I Soulcycle. I’m a Soulcycle freak and have actually been spinning for many years before Soulcycle started. I also go to the gym and spend time with my family. My family is very important to me. I have friends all the way back to high school but I don’t see them as much as I’d like. I also have a house in The Hamptons because I love the beach, I love the ocean. I try to be around things I love. Work is 24/7 so I’ve incorporated my work into my life.
NAWRB: Can you tell us what Soulcycle is?
Dottie Herman: Soulcycle is pretty big. It’s exercising on stationary bicycles while you spin to music. I love music and I love to dance. Soulcycle has great music and makes for a 45-minute workout that burns 400 calories. If you love music it’s a great way to get fit.
NAWRB: What person has inspired you most throughout your life?
Dottie Herman: I’ve been inspired by a lot of people and I’ve had some great mentors. Early on it was some of the people at Merrill Lynch. Howard Lorber certainly believed in me. Another mentor of mine is Jack Welsh. From the moment I started reading his books, I was so inspired and thought I could do the same thing with my own company. I still carry around a photocopy of Jack’s golden rules in my wallet.
NAWRB: If we could ask 14-year-old Dottie what she wants to be when she grows up, what would she say?
Dottie Herman: I probably would have said two things. I would have said a teacher and then an actress, or maybe the other way around.
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