John L. Scott plans to expand in downturn

Looking to grow during the downturn, John L. Scott Real Estate has hired a former RE/MAX International Inc. franchise sales consultant, Tim Wynne, to scout the Northwest for brokerages to acquire.

As John L. Scott's new director of franchise development, Wynne's main responsibility will be to find opportunities to acquire companies in Washington, Oregon and Idaho, the company said.

"The main reason for hiring Tim is the sheer fact that there are a lot of companies looking for exit strategies right now," said Joe Spencer, president and chief operating officer of John L. Scott. "We did not have enough personnel to handle the inquiries we are getting."

As the market becomes more challenging, a lot of companies are also looking to realign their affiliation, Spencer said.

Although Seattle-based John L. Scott is having discussions with real estate brokerages that want to affiliate themselves as company franchises rather than put themselves up for sale, the main goal is "to acquire companies we can roll into existing operations," Spencer said.

John L. Scott has 32 company-owned operations and 102 franchised offices, Spencer said, and Wynne will also provide assistance to John L. Scott franchises looking to make acquisitions.

Sometimes we get a call from a franchise owner looking for expertise on acquiring another company, and at the same time, he is out talking to independent companies about their interest" in being acquired, Spencer said. "Every once in awhile we do get a random call from someone that is interested in selling their company."

Before serving as RE/MAX's franchise sales consultant for Nevada, Utah, and parts of northern and central California, Wynne's more than 20 years of industry experience included stints with Fidelity National Real Estate Solutions, Stewart Realty Solutions, GMAC, and Prudential Real Estate Affiliates.

Spencer noted that John L. Scott has completed two acquisitions in the last 90 days -- Prudential Kelstrup Realtors in Bellingham, Wash., and a Prudential NW office in Scappoose, Ore. He said three or four other deals are likely to close by the end of the year.

Although John L. Scott has grown steadily over its 78-year history, "Typically most our spurts of growth have happened in more challenging markets," Spencer said. "This is a natural process -- it happened back in the 70s, and again (in) the 80s -- it's not a big surprise. But not everybody is in a position to grow their company in this market."

John L. Scott currently claims more than 4,000 sales associates in 140 offices in Washington, Oregon and Idaho, who last year closed more than 44,000 transactions totalling $14.6 billion dollars.

The most attractive companies for acquisition are those within 7 or 8 miles of an existing company-owned or John L. Scott franchise office, Spencer said, although the company is "not opposed" to acquiring operations in major markets that are farther away from existing offices.

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