GMAC Home ServicesLLC, which operated one of the largest real estate brokerage companies in the United States and also offered relocation and mortgage operations, has been acquired by a Canadian company.

GMAC Real Estate, which ranked fifth in the nation for its company-owned brokerage operations, has been acquired by a Canadian company, Brookfield Residential Property Services.

A Canadian company has entered into a deal to buy GMAC Home Services LLC, which operates one of the largest real estate brokerage companies in the United States.

Brookfield Residential Property Services, based in Toronto, Canada, will gain a fast foothold in the U.S. real estate market with the purchase — the company already operates several brokerage brands in Canada, including Royal LePage, La Capitale, Johnston & Daniel and Centract.

GMAC Real Estate’s company-owned operations ranked 10th in total transaction sides and fifth in transaction volume in 2007 among U.S. real estate companies ranked in an annual survey by real estate research and analysis company RealTrends, and the company also operates a larger franchise network.

Brookfield also gets GMAC Global Relocation Services and GMAC’s GHS Mortgage in the deal — the companies did not reveal the financial terms.

Graham Badun, managing partner and CEO for Brookfield Residential Property Services, a part of global asset management company Brookfield Asset Management Inc., told Inman News that GMAC Home Services is "a good fit as far as our existing businesses."

Brookfield real estate companies had a total agent count of about 15,000, Badun said, and that will grow to about 33,000 or 34,000 once the GMAC deal is finalized.

The GMAC Real Estate Web site states that GMAC Real Estate has franchise operations in the United States, Canada, Puerto Rico and Portugal.

Gina Proia, GMAC spokeswoman, said there are about 1,000 franchise offices and 80 company-owned offices. The company-owned offices have about 1,100 employees.

She said that GMAC will hold onto some loan origination and servicing business, "primarily through our direct lending channels" such as Ditech and GMAC Mortgage Direct. The sale of GMAC’s GHS Mortgage, a part of GMAC Mortgage, is "part of our streamlining initiatives," she said.

GMAC Global Relocation Services is among the largest international relocation and assignment management companies, according to the Web site, servicing about 22,000 transferring employees and international assignees. And GMAC Mortgage has ranked among the largest residential mortgage originators and services.

For now, Badun said, it will be "business as usual" for those working under the GMAC brand while the company sorts out management and other details. The transaction is expected to close during the fourth quarter.

"We’ve got people on both sides of this transaction working with both management teams. There is a lot of talent on both sides," Badun said.

Brookfield’s relocation services operations are the largest in Canada (by some margin), he said, and its real estate brokerage operations are among the largest in Canada. GMAC had some franchise operations in Canada, with about 450 to 500 agents working under the GMAC brand there.

Last year, Brookfield acquired Quebec-based brokerage company La Capitale, Badun said — that company had about 1,500 agents.

"I think the market conditions are right for evaluating international expansion," Badun said, speaking about the industry as a whole.

Rumors about the fate of GMAC’s real estate-related services had been swirling for months. Earlier this month, on Sept. 3, GMAC Financial Services and subsidiary Residential Capital LLC, also known as ResCap, announced actions to close all 200 GMAC Mortgage retail offices and to cut the ResCap workforce by about 5,000 employees, or 60 percent, among other steps. About 3,000 employees would receive termination notices this month, according to the announcement, with the remainder of the reductions expected to occur by the end of the year.

"ResCap will continue to originate loans in the U.S. and internationally where there is a secondary market to sell those loans," the company announced, citing "the downturn in the credit and mortgage markets" as drivers for the move.

Brookfield Chairman George Myhal also referenced "recent market turmoil" in a statement about the GMAC acquisition, and said, "we believe we are well-positioned to grow our market share once this difficult period of adjustment is behind us."

George Slusser, a real estate industry consultant who as worked on mergers and acquisitions for some major companies and is a former real estate industry agent, broker and senior executive for a range of companies, noted in a June 9 blog post that "There have been rumors for a few years that General Motors would like to divest all of GMAC Real Estate," and pondered which company would be the likely buyer.

General Motors in 2006 sold a majority stake in its GMAC business to a consortium of investors and had since maintained its reduced stake.

Slusser noted that GMAC had formerly owned the Better Homes and Gardens real estate brand rights, acquired from publisher Meredith Co. Those naming rights expired this year and were purchased by Realogy Corp., which in July rolled out Better Homes and Gardens as its own real estate franchise brand.

Before the deal was announced, Slusser told Inman News he had heard the Royal LePage (parent company) name mentioned among other potential suitors for GMAC, and said that not all GMAC brokers viewed the potential for new ownership as a bad thing.

"From the people I talk to they are pretty excited about the potential buyer," he said.

Realogy was mentioned among the possible buyers, he noted, though that company has been saddled with debt in the heavily leveraged buyout deal last year by an affiliate of private equity firm Apollo Management LP.

Slusser said the climate is definitely ripe these days for industry acquisitions.

"I would be sure there’s going to be some consolidation. There’s been more conversations than I’ve ever seen. Everyone is talking. As the year goes on people are going to have to dump or close," Slusser said, adding that smaller national players and large regional players may be the ones that are best positioned to make the big moves.

"The semi-weak companies are hoping they have enough revenue to survive the next year," he said, adding that it could be a long and painful winter for those real estate companies that are in particularly dire financial straits.

Brian Sharkey, an agent with All Florida GMAC Real Estate in the Port Saint Lucie, Fla., area, said the news of the acquisition was unexpected. "I was surprised about it," he said.

It’s too early to know what to make of the deal, he said. "The verdict will be out. Nobody’s very sure about anything."

Brookfield Asset Management Co. has about $95 billion in assets under management.

Brookfield reported that that its network included 338 independently owned and operated real estate franchises operating from 644 locations, with about 14,771 Realtors, as of June 30, 2008.

Canada’s housing market has fared much better than the U.S. housing market over the past few years. The Canadian housing market had a 2 percent gain in sales volume for the 12-month period ended June 30 compared to the same period in the previous year, according to the company’s earnings report, fueled by a 6.9 percent increase in the average sales price of a home there. The number of sales, though, declined 4.6 percent compared to the previous 12-month period.

Meanwhile, the National Association of Realtors reported that the sales rate for U.S. resale homes fell 13.2 percent in July compared to the same month last year, with the national median price falling 7.1 percent.

According to RealTrends, GMAC Real Estate’s company-owned operations had a total transaction volume of about $13.2 billion in 2007. In that report, Metro Brokers GMAC Real Estate was the company’s top-ranking franchise with a transaction volume of $1.9 billion. Dilbeck Realtors GMAC Real Estate was the company’s second-ranked franchise in that report, with a transaction volume of $1.4 billion.

***

What’s your opinion? Leave your comments below or send a letter to the editor.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×