Cody and Zach Vichinsky (Photo by Bill Bernstein)
Cody Vichinsky sat at a corner table in the CORE club. His locks were flowing, his skin bronze despite the winter and he sported a plaid overshirt of crisscrossed earth tones. He asked for a plate of fruit — off the menu — and a pot of tea. He seemed born to this lifestyle, as at home in this elite Midtown Manhattan haunt as he would be on the ski slopes of Gstaad or the polo clubs of the East End.
The reality is quite different. Today one of the premier home peddlers in the Hamptons, only touching product priced at $10 million or up, Cody was born in the Massachusetts hinterlands and grew up in Three Villages on Long Island, more Queens than Sagaponack. His perch today as a major player on the Hamptons’ high-end home scene is a product of 35 years of continuous hustle.
Cody and his brother, Zach, founded Bespoke Real Estate in 2014, and they’ve ruffled feathers ever since. They’ve disrupted old-boy networks with a more sophisticated, data-driven approach to the market, and looked to push pricing into realms their competitors describe as fanciful. They’ve also rattled the business of brokerage itself, opting to hire salaried staffers to sell homes rather than independent contractors. All that growth and disruption comes with a spotlight, but Cody says he’s keen to avoid it.
“You’ve got to get past it, being the best or the number one. By that metric, I’ve been the biggest broker in the country many times over for under-30. At 28, I think I sold like $600 million in real estate and I didn’t take any credit for it,” Cody said, taking at least some credit for it.
And if Bespoke has any intention of flying under the radar, it doesn’t show. The firm pulled off last year’s priciest Hamptons deal, a $105 million to-do with bay views, ocean views and a private pond.
Overall, it closed $1.6 billion in deals in the Hamptons last year, including at least three of the 10 biggest sales, all while adding listings in new markets such as South Florida, New York and the Caribbean.
Data bros
After their parents split early, the brothers were raised largely by their father, a construction manager whose work often meant spending long hours in Queens. By 16, Cody was stocking shelves in a liquor store to pay for his own apartment. Zach skipped college to start a painting business and bought a house in Rocky Point.
“My dad was very philosophical and he didn’t have much to offer financially, but he had a tremendous amount to offer in terms of love and perspective and the things that he didn’t have,” Cody said. “When you grow up in that type of environment, you become driven and you become self-sufficient. You don’t go home for dinner at six o’clock every night.”
Cody landed a scholarship to New York University, double-majoring in finance and technology, and found a job working for a cloud-computing advisor. For nine months a year, he traveled the world advising governments and companies on data strategy.
In the mid-2010s, Zach informed him that he was moving to the Hamptons to become a real estate agent. Neither had worked in the field before, but Zach assured Cody it was the move.
“This is the land of milk and honey, it’s a fantastic place,” Cody remembers Zach telling him. “The brokers here, they’re pretty lazy and they make all this money.”
Ever the grinder, Cody was intrigued. As soon as he arrived in Sagaponack, he started hitting the phones. Without the connections or the institutional knowledge of established brokers, the brothers were immediate outsiders in a world of insiders. They might not be able to change the past, but they could work hard enough to make up for it.
Even his fiercest competitors, people with hardly a good word to say about him, will admit Cody is a workhorse. So when the Vichinskys set their sights on conquering the Hamptons, you can bet they mounted a high-octane, diesel-powered assault.
They set up shop in a rental farmhouse in Sagaponack, spending long days and nights amassing data on the granular details of Hamptons deals.
“It was a completely arbitrary market at the time,” said Cody. “No quantifiable metrics, no price per square foot, no linear frontage on the beach, no price per acre. So we took a very scientific approach to create value in the marketplace when there really was none.” A house might sell for $14 million around the corner from one that went for $3 million, with little reason to justify the difference besides the agent’s estimate of a good price.
The data dive also helped them overcome their carpetbagging, as they became intimately familiar with how their desired customers lived. They learned where they worked, where their kids went to school, what kind of bagels they preferred, anything to better understand that peculiar little world on the East End.
Raining money
Before the pandemic, home prices in the Hamptons spent a decade moving between $825,000 and $1 million, the line graph a series of minor peaks and valleys like a toddler’s drawing of a mountain range. Then came Covid.
As you’ve read a million times by now, many of New York City’s anxious and wealthy fled to the East End. In the last quarter of 2020, 803 homes sold in the Hamptons, the highest quarterly total in at least a decade, according to data from real estate appraisal firm Miller Samuel. At the same time, the median home price jumped 17 percent quarter-over-quarter to $1.4 million, another record at the time.
But that was for the average home. And the Vichinskys aren’t interested in the average home.
Bespoke says it only sells homes worth $10 million or more, and if you focus on that ultra-high-end niche, the homes break out into a class separate from the luxury market altogether. You enter what Jonathan Miller, president of Miller Samuel, calls “a circus sideshow,” where a home’s price is almost entirely disconnected from the market it’s located in.
“When we start getting to $50 million or more, that market starts to have less to do with local conditions and more to do with national or global, where these are trophy properties that are rarely available and are highly sought after,” Miller said.
The pandemic has been a great time to be wealthy. The S&P 500 is up 31 percent from its pre-Covid watermark. Wall Street bonuses grew at their highest level since the Great Recession.
“People are just fucking killing it in the stock market. They just don’t care,” said Christopher Burnside, a Hamptons agent for Brown Harris Stevens who also specializes in the high end.
“If you’re not making money you’re a fucking [idiot],” said another top agent who spoke on condition of anonymity. “It’s raining money.”
The real issue is inventory.
90 Jule Pond Drive
“There’s nothing! For 25 million bucks you’re lucky to find a house on an acre and a half,” said Burnside. “There’s just no inventory worth discussing.”
“People who couldn’t sell their homes sold them,” said Harald Grant, a top Hamptons luxury agent with Sotheby’s International Realty.
The “$10 million and up [sector] has greatly benefitted from the current economy,” said Miller.
Games people play
As the power, promise and inevitable buzzwordification of big data invades corporate culture, it makes sense that a brokerage targeting the C-suite would speak its language.
The data can also make price estimates seem less subjective. What’s the price per square foot of beachfront access? How much more should I pay if my pool comes with an enclosed poolhouse? When you reach the top tier of the market, pricing involves a huge amount of guesswork, and very successful people generally don’t like guessing with their money. The data can calm sticker shock.
The Vichinskys have run into criticism for engaging in aspirational pricing, setting outrageously high initial asking prices to score a listing and then letting that price fall back to reality.
In their signature sale, the former Henry Ford II estate at 90 Jule Pond Drive, Bespoke spent four years watching the asking price fall from $175 million, to $145 million, to the final selling price of $105 million.
Jule Pond may be a singular property, but Bespoke’s rivals say it’s part of a pattern.
“They’ve got hundreds of these listings that are overpriced,” said Burnside, the BHS agent.
Susan Breitenbach, a top Hamptons broker for Corcoran who says she’s currently sharing a listing with Bespoke, said she was surprised when she saw them list one property for $34 million after she had recently sold it for $16 million. She called to see what had changed about the property to justify its new price, and learned a tennis court was being added.
“I think they’re trying to just say how good they are,” said Breitenbach. “They don’t care as much about selling it as much as having the listing.”
“I don’t want the hype,” Cody insisted. “What’s the hype do? Feeds my ego. Maybe gets me a listing. I want to win on merit. I want to win because I’m better. If I’m a hyped-up boxer, right? And I’m hyped and I get in a ring and some guy beats the shit out of me? He’s a better boxer. Like I want to be the best boxer that’s not hyped up.”
Breitenbach and Burnside agree that the problem isn’t exclusive to Bespoke, but one that pervades the luxury market.
“You can’t make rhyme or reason for some of the listing prices that some of these brokers come up with and then they sit,” said Burnside. He added that taking the data approach wasn’t unique to Bespoke.
“The data is public information. The data tells you who bought a house where, who owns this LLC,” he said. “We’re all doing it.”
But to others, the data-driven approach is a new way forward in the Hamptons. “That’s the new, upcoming upstarts that do that,” said Sotheby’s Grant.
Either way, it’s expensive, and Bespoke aggressively guards its data. In June, they moved to settle a lawsuit with a former employee accused of stealing information from their database and using it at his new firm, Hedgerow Exclusives, which this year overtook Bespoke for the most top-10 Hamptons sales on The Real Deal’s list. In the suit, the Vichinskys reported spending between $1 and $1.9 million over five years on developing their data and proprietary methodology.
While they aim to upend the Hamptons approach to sales, Bespoke was also taking aim at the brokerage model in general. Rather than working with independent contractors, the firm pays salaries to its sales team and staff. It’s a radical move in brokerage, where just 3 percent of agents receive a salary, according to one survey by the National Association of Realtors.
At least on the sell side, the commission model is designed to incentivize the agent to push for a better price. Bigger pie, bigger slice. But Cody disagrees.
“These commission structures are designed for World War II where your grandparents were buying homes for $15,000,” he said.
Meanwhile, at least in theory, the process is communal at Bespoke. If a broker brings in a buyer, they go into a shared database everyone can access. The entire company can work on one client together, and while that means the commission gets cut in a lot of different directions, it’s designed to encourage collaboration in a business built on competition.
To illustrate the point, Cody gestured to Mike Cantwell, his chief of marketing and childhood friend sitting across the table at the CORE Club.
“Say Mike and I both work for Corcoran or Brown Harris Stevens. We’re sitting next to each other, but I don’t want Mike to know exactly what I’m doing. It makes no sense. Yeah, there’s camaraderie in the umbrella of Compass, but they’re all still competing against each other,” he said.
“We’ve dominated the $10 million-plus market in the Hamptons — it’s because of the model,” he added.
Smart, right? So why hasn’t someone copied it?
“They can’t. It’s taken us seven years to get to a place where it could function,” Cody said.
And not everyone’s interested in imitation. Many of the top Hamptons brokers have been flipping million-dollar homes since the Vichinskys were in middle school, and they’re happy to keep doing just that.
“They say they don’t really have any brokers. I don’t know whether that’s good or bad,” said Breitenbach. “If I had a big listing, I would want a broker that’s going to make a lot of money if he sells it.”
After Cody has mused for about 45 minutes about the merits of salary compensation, it’s time for Cantwell to summarize. “We have converged the role of the brokerage, the independent agent, the broker, marketing, research and all those things into one super thing,” Cantwell said. “So when you’re writing a story about ‘how do you create a mega broker,’ Bespoke is that mega broker.”
That mega broker is Cody’s prime obsession. Individual sales show up on the year-end lists, and he clearly notices, but it’s a sugar rush. Building Bespoke is the only wholesome meal.
“All right, you did four deals out of 10 or you did two deals out of 10. Whoop de do. If you’re living in that cycle, you’re a hamster in a wheel. And that wheel starts January 1st, every year,” he said. “That’s not how I want to live my life. I want to leave a deeper imprint than that.”
