Compass touted unity among the 340,000 real estate professionals it would add under its umbrella by acquiring Anywhere Real Estate, but Texas brokers aren’t clear on how the move will change the game.
The move followed another blockbuster deal. Last year, Compass agreed to acquire Chicago-born @properties for a stunning $444 million. The deal for its competitor in the market built on their first- and second-place spots in the brokerage scene and secured Compass’ foothold. If the merger with Anywhere goes through next year, brands affiliated with Compass will account for most of the sales volume of the top 20 brokerages in Chicago, according to an analysis of last year’s sales.
North Texas is a more varied market. The top 20 brokerages in the Metroplex charted $37.9 billion in volume last year. Compass and the brands that it will absorb completed $12.39 billion altogether, meaning that Compass stands to gain about a third of the market share in North Texas. Other brokerages completed $25.55 billion in volume.
Coldwell Banker Apex, Coldwell Banker Realty, Briggs Freeman Sotheby’s International Real Estate, Century 21 Mike Bowman and Century 21 Judge Fite are the top North Texas brokerages that operate under the Anywhere brand. With Compass, their combined volume of $12.4 billion would dwarf the No. 1 brokerage, Berkshire Hathaway-owned Ebby Halliday Real Estate, which completed $5.84 billion.
A caveat: Coldwell Banker, Sotheby’s International Real Estate and Century 21 are franchisors, so the local offices affiliated with their brand are independently operated. Compass owns its Dallas office, but Anywhere doesn’t own the businesses that pay to use its brands, which compete with each other to varying degrees. The merger won’t combine these businesses into one.
“We have a franchise agreement with Anywhere, and that will stay in place for the long term,” said Jim Fite, owner of Century 21 Judge Fite.
A change in the guard doesn’t make much difference in the day-to-day work of a franchisee, said Jerry Mooty Jr., CEO and broker of Christie’s International Real Estate @properties Lone Star, which Compass also recently acquired.
“We still report to the same Christie’s leadership; if anything’s happened, it’s actually helped us on the recruiting side,” Mooty said, adding that branding matters in the luxury world.
Christie’s brass told agents last year that the Compass name would boost prestige. Not all agents accepted the encouragement. Nancy Almodovar, founder of leading Houston luxury brokerage Nan & Co, said her office was “blindsided” by Compass.
“I actually believe the consumer maybe even pays more attention to the brand of the individual agent than they do the company,” argued Tommy Flood, head of the GO Network, the largest franchise in Keller Williams, which stands to become the second biggest brokerage in the country after the acquisition.
Fite said he doesn’t expect his company or the Century 21 brand to be affected. His primary concern is data sharing.
“The ownership of data is very important. I don’t want my company data in the hands of my competitor, and I believe my franchise agreement prevents that,” Fite said.
Compass can collect “agnostic data” without violating franchise agreements using a multitenant technology structure that would protect each office’s data, Mooty said.
“You can build a technology stack on what’s called a single-tenant model, where everybody plugs in and all that data is included in one big database. That’s what Compass was originally when it was just Compass,” Mooty said. For franchises, though, “there might be some agnostic data or whatever the word is — it’s not identifiable data — that might pool up to where you get a bigger picture of the real estate market.”
Compass ranked second among North Texas brokerages last year in TRD Data, and Century 21 Judge Fite ranked 11th with $1.3 billion in volume. The nearest competitor to Compass under the Anywhere brand is Coldwell Banker Apex, which ranked fifth with $2.2 billion in volume.
“I think our presence is smaller in the more medium price range in the suburbs,” said Michelle Wood, founding partner of the Detwiler+Wood Group, the highest-producing Compass team in the Dallas market.
When asked if the acquisition might resolve any rivalries between brokerages, as it’s expected to in Miami, Wood said that Anywhere brokerages “don’t compete with us in the Dallas market.”
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