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The nation’s largest residential real estate brokerage could soon have a presence in Southeast Michigan and across the state.
New York City-based Compass Inc. (NYSE: COMP) announced Monday afternoon that it has reached a deal to acquire Christie’s International Real Estate as well as its @properties brand, which has established a significant presence in Southeast Michigan in recent years. The $444 million deal, expected to close next year, will keep intact the @properties brand, which has become a mainstay on “for sale” signs around the region.
Details on what the acquisition could mean locally are scarce at the moment. Eric Walstrom, co-CEO of the @properties Christie’s International Real Estate Michigan affiliate, declined to comment, pending the deal’s close next year.
“For the brokerage firms, these are areas where much of the money is made since most of a buyer’s or seller’s commission goes to the individual agent,” Connolly wrote in an email to Crain’s. “In the long run, with significant consolidation in the brokerage industry, we could see price increases on title and mortgage fees, although these tend to constitute a small share of any residential real estate transaction.”
Compass’ overall sales volume in 2023 was $184 billion, or about 10 times the size of @properties Christie’s, according to RealTrends. It was the company’s third straight year as the nation’s largest real estate brokerage by volume.
The local @properties affiliate, based in Birmingham, did about $900 million in sales volume in 2023 with 175 agents, and Walstrom told Crain’s earlier this year that he expects to exceed $2 billion this year.
Chicago-based @properties has seen steady growth in the Detroit area in recent years, coming into the market in 2021 via a merger with Alexander Real Estate. Since then, the company has expanded into new markets around the state, most recently early this year with deals for new offices in Ann Arbor and Petoskey.
“We rely more on quality over quantity, (the) quality of agent,” Walstrom said at the time of the company’s strategy. “We tend to (lean) a little bit more toward more experienced agents who provide a higher level of service. And with the market slowdown — the customer, the client and consumer — they’re looking for a higher level of service. So in 2021 and 2022 … you know, my dog could have sold a house in 2022.”
A handful of other local brokerage deals have also occurred in recent months.
Reffkin founded Compass in 2012 and took the brokerage public nearly a decade later. The Christie’s deal helps forge a new expansion path for Reffkin’s company at a time when the housing market remains sluggish because of high mortgage interest rates and prices.
Connolly, the UM professor, also noted that the change in the Realtor commission structure implemented earlier this year as part of a settlement by the powerful National Association of Realtors trade group could play into deals such as what was announced by Compass and @properties.
“(G)iven the possibility that the commission structure may change over time, it would not surprise me if brokerages are consolidating to hedge against the possibility of reduced transaction volume or lower commissions,” Connolly wrote.
— Crain’s Chicago Business and Bloomberg contributed to this report.
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