Jerry Mooty on Compass Acquisition of @properties and Christie’s: ‘We Did Not Get Bought’
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About that @properties and Christie’s International Real Estate acquisition by Compass announced Monday … We had plenty of questions, so we turned to who I consider the face of @properties Christie’s International Real Estate in Texas, Jerry Mooty, for an in-depth discussion on what this acquisition means for North Texas real estate.
Compass announced on Monday that it would acquire @properties and Christie’s International Real Estate plus its affiliated title and mortgage businesses, Proper Title and Proper Rate, in an estimated $444 million transaction. Compass, already the nation’s largest residential real estate brokerage by sales volume, expanded its portfolio earlier this year with acquisitions in Tennessee and Louisiana.
The announcement caught some off guard, as the Real Deal reported, saying “Texas affiliates were blindsided” and “Chicago brokers were stunned.”
Mooty told me (with a chuckle) that he spent a good part of the day explaining to folks they wouldn’t go to sleep Monday as @properties agents and wake up Tuesday morning as Compass agents.
1. Texas @properties franchises not included in the transaction
Brokerages and affiliates under the Christie’s umbrella will operate independently from Compass as they already have, Compass corporate says. But Texas is not included in the transaction. If anything, it sets apart Mooty’s @properties Christie’s International Real Estate in a great way.
“We did not get bought,” Mooty told me. “The only thing that has changed with this acquisition for us is the entity our royalties go to has changed. Our LLC is privately owned, but this transaction has huge potential for my Texas team. I’m honestly more than psyched!”
Compass merely bought corporate-owned brokerages from @properties and Christie’s International, not privately owned franchises, such as Mooty’s shops in North Texas and Austin.
Mooty has been building a team of luxury agents from scratch, growing three DFW offices, and expanding into Austin and Central Texas. He has hired a herd of powerhouse agents and leaders including Romeo Manzanilla, former regional Vice President of Compass, as COO and managing broker in Austin, Eric Eversgerd in Dallas, Eve Henry in Frisco, and Michael Hoover in Fort Worth. Mooty has added focused divisions to his brokerage including Land + Ranch, Sports & Entertainment, and a full-service Developer Services Division which provides brand development and design, digital and social media marketing, and sales and consulting for small, medium, and large developers.
“A Christie’s agent is not a Compass agent now,” says Mooty. “Their license is still under my brokerage, and we are the exclusive Christie’s affiliate in our territories.”
The acquisition only affects the corporate-owned @properties offices in regions such as Chicago, where the brokerage was founded, swaths of midwestern brands, and Atlanta’s toney Ansley Real Estate brand, recently purchased by @properties. It was so complicated Compass PR was busy updating press releases on Monday, as our Shelby Skrhak reported:
A Compass press release listed @properties operations in Greater Chicago, Indiana, Michigan, Wisconsin, and Metro Atlanta through the Ansley Real Estate brand as part of the merger — NOT Texas. Actually, Compass had to revise the press release Monday after its first edition didn’t specifically name one of the powerhouse franchises, the Metro Atlanta group founded by Atlanta entrepreneur Bonneau Ansley, in the headline.
2. Why the acquisition?
Real estate brokerages can be complicated to dissect. Are they all one big company? Why so many divisions, franchises, and LLCs? Why so many companies under one umbrella?
The answer has to do with localization and branding. Real estate is one of the most highly localized industries in the world. Example. Say you move to Toledo, Ohio, from Denton, Texas. You need an agent who knows Toledo to help you BUY a new home there, and you need an agent in Denton to sell your old home in North Texas for best results.
To find those agents, you don’t know specific names so you might look to a big real estate brand to narrow the field. The goal of branding is to earn space and trust in the minds of the target audience and become their preferred option for doing business.
Brands are the way companies communicate their vision and clarify what a company stands for, be it luxury homes, farm and ranch, or first-time homes. That’s one reason why real estate conglomerates tend to buy several brands in the very same market competing against each other.
We have a perfect example in Dave Perry-Miller Real Estate, Ebby Halliday Realtors, Allie Beth Allman & Associates, and Fort Worth’s Williams Trew. They are ALL owned by Berkshire Hathaway. These brands are competitors but by uniting they share synergies and realize certain savings.
Or take New Jersey-based Anywhere Real Estate, which used to be Realogy Holdings Corp. Two years ago the conglomerate re-branded as “Anywhere” and traded on the New York Stock Exchange under the ticker symbol, “HOUS”.
HOUS includes the collective real estate brands of Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, Corcoran, ERA, and Sotheby’s International Realty, as well as national title, mortgage origination, and home services. RealTrends lists them as the second largest brokerage in the U.S. with a 2023 sales volume of $176,229,465,000 for all those entities. $176 billion!
Compass is listed by RealTrends as the 4th largest U.S. brokerage with 2023 Sales Volume totaling $184,452,364,253. @properties is the 8th largest U.S. brokerage with 2023 Sales Volume of $22,610,457,904.
You can see how these two combined brokerages can overtake Anywhere in terms of sales volume.
3. Mooty, CEO of @properties Lone Star Christie’s International Real Estate Is Excited About the Transaction.
Mooty is really upbeat about the news:
“I think it’s going to be very helpful ultimately, and it’s a great additional relationship for us to have,” he told me. “Now we are a luxury arm of the #1 brokerage based on volume in the luxury market — Compass. Our agents are loving it.”
Christie’s International Real Estate will continue to operate independently from Compass, and the Christie’s International Real Estate brand itself will not change. Compass will not use the Christie’s International Real Estate brand. Christie’s International Real Estate affiliates will maintain exclusivity in the markets they own, and will not share a brand with Compass or any other local brokerage. Agents will see no change in the proprietary technology, marketing, training, and affiliate services, including the auction house connection.
“This is a total boost to our brand, and will make our affiliate Christie’s brand even more powerful,” says Mooty. “Christie’s International Real Estate will be bigger, stronger and better for all of us.”
Now, I hear the word in the industry was that Compass, which has grown extraordinarily since its incubation in 2012-2014, was getting beat internationally by Christie’s International. To get a bigger slice of that pie, Compass did overseas what it did in the US: buy market share. The firm is hyper-focused on serving its agents above everything, as Reffkin told me when he first came to town:
“The agent is our customer,” Robert told me over coffee at Hotel ZaZa, where he stayed recently on his first trip to Dallas to meet The Collective, the brokerage firm with which his company had just merged. “Realtors are the most underserved base of customers in this country. 1.2 million of them. Every day we ask agents, what can we do to make your life better, how can we help you save time, sell more, and have a greater quality of life?
The industry actually works, Robert says, it is just overwhelmingly fragmented: 800 MLS’s, 10,000 brokerages, 300 or more software products.
@properties was built from the ground up by two Chicago real estate agents in 2000 with similar missions: support agents, utilizing prop-tech platforms in an era of industry disruption. @properties is high on technology as well as a back-end academy that provides training and support. The heart of the system is the proprietary platform, from which an agent can work their entire day.
“Agents can log into their property folders marketplace and all the materials are there, even social media,” says Mooty. “Basically you never have to leave the technology.”
That sounded a little Compass-esque at the time
“I don’t think Compass offers this level of support,” says Mooty.
Now, they do.
