Pioneering technology-based brokerage ZipRealty Inc. will have a new CEO and president effective Oct. 2, with longtime executive J. Patrick Lashinsky relinquishing the position to Chief Financial Officer Charles C. "Lanny" Baker.
Baker, 43, came to ZipRealty in 2008. His previous experience includes stints as Monster Worldwide Inc.’s chief financial officer, and management positions in the equity research department at Smith Barney, where he covered the Internet, e-commerce, radio and television broadcasting industries.
Lashinsky began his 10 1/2-year career with ZipRealty six months after the company was founded in 1999 by two University of California, Berkeley, business school graduates. He said he has no immediate plans and will "play it by ear" in evaluating future job opportunities.
"There are no disagreements between (Lashinsky and ZipRealty) regarding any matter related to the company’s operations, policies or practices," the publicly traded company said in a regulatory filing.
ZipRealty’s board of directors promoted Baker on Thursday, the regulatory filing said, and Lashinsky resigned from his position the same day, effective Oct. 1.
Under his separation agreement with the company, Lashinsky will receive $300,000 in severance pay — an amount equal to three-fourths of his $400,000 annual base salary — and have until Oct. 1, 2013, to exercise vested stock options.
"I feel great what we've been able to accomplish for our clients and our agents, and being in the forefront in helping people understand that technology is not evil." --Pat Lashinsky, departing CEO, ZipRealty
He held numerous positions at ZipRealty over the years, serving as executive vice president of product strategy and development, vice president of marketing and business development, and vice president of sales.
During that time, "the industry has changed a lot, from people being afraid of the Internet to embracing" technology, Lashinsky said. "I feel great what we’ve been able to accomplish for our clients and our agents, and being in the forefront in helping people understand that technology is not evil."
Lashinsky said there is a window of opportunity at any company when managers have the ability to innovate and transform its operations, and said that after nearly 11 years at ZipRealty he was looking forward to other opportunities to "keep the creative juices fresh."
"I feel like I’m leaving ZipRealty in a great situation — Lanny (Baker) is a great thinker, and I think he’ll be one of the brightest people in real estate from day one," as the company’s new CEO, Lashinsky said.
But it will be hard to say goodbye, Lashinsky said, having hired many of ZipRealty’s employees and "gone through the battles you go through when running a company."
Although some ZipRealty managers have been with the company since before its 2004 initial public offering, Lashinsky’s departure marks another milestone in its history.
Founders Scott Kucirek and Juan Mini parted ways with the company before Lashinsky was named CEO. Kucirek noted Mini’s decision to return to Guatemala to run his family’s real estate business in a 2003 Business Week column.
Kucirek himself left the company and its board of directors in November 2005, later taking positions with Prudential California, Nevada and Texas Realty, and then CALMLS, the California Association of Realtors’ subsidiary working to build a statewide MLS.
ZipRealty made waves when it launched with a commission rebate model the company said was made possible, in part, by its ability to provide services to agents and clients over the Internet rather than through brick-and-mortar offices.
Shortly after ZipRealty launched, co-founder Juan Mini landed on a panel at the Inman Real Estate Connect Conference, where he was received with some skepticism when he acknowledged the company had only four transactions under its belt. When the company went public four years later, it was clear that "Zip (was) not a joke anymore," as the headline on an Inman News article proclaimed.
The company continues to be known as an innovator, in recent months announcing that it was adding "augmented reality" capabilities to its iPhone application, and neighborhood boundary data from Maponics to help clients searching for properties online.
ZipRealty was ranked by Real Trends as the fifth-largest brokerage in the U.S. by closed transaction sides in 2009, and the company’s property search website was the seventh-most popular real estate portal on the Internet in August, according to online metrics firm Experian Hitwise.
Offering virtual office website (VOW) capabilities to registered users, ZipRealty’s website is more popular than property search portals operated by all other brokerages and national franchises, rivaling third-party aggregator sites like MSN Real Estate and Trulia, Hitwise numbers show.
ZipRealty has also differed from many competitors in hiring agents as employees, rather than independent contractors. Although agents earn smaller commission splits, they receive benefits including medical insurance, dental insurance and 401(k) retirement plans But the company announced in July that as a cost-cutting measure, it will convert all of its California agents — representing about 28 percent of the brokerage’s total agents — to independent contractor status (ZipRealty agents in Las Vegas and New York are also independent contractors).
In reporting second-quarter results, ZipRealty said revenue was up 17 percent from a year ago, to $37.6 million, and that the company had trimmed its losses from $2.4 million a year ago to just $225,000.
The company’s 3,251 agents handled 7,100 transaction sides in 35 markets during the quarter, representing buyers nine times out of 10. But the company hasn’t been immune to the downturn, losing $12.9 million in 2009 and expecting another loss, though smaller, this year.
After opening in 10 new markets in 2007, ZipRealty has entered two since then: Hartford, Conn., in 2008, and Portland, Ore., in 2009.
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