San Francisco Bay Area based luxury broker Pacific Union GMAC Real Estate will be sold to a smaller brokerage as part of ongoing efforts by its parent company to convert corporate-owned offices into independent franchisees.
Canadian-based Brookfield Residential Property Services, which acquired GMAC Home Services LLC last year, plans to drop the GMAC name and rebrand its U.S. network of real estate companies by the end of the year. In the meantime, it is carrying out a reorganization that has included the sale of company-owned GMAC Real Estate offices in New Jersey and Massachusetts.
Brookfield RPS managing partner and chief executive officer Graham Badun last month told Inman News the company will sell its U.S. brokerage offices only to owners who agree to continue as company franchisees (see story).
In the latest such move, Pacific Union GMAC is to be acquired by the principals of Morgan Lane Marin Inc., who will operate the companies under their existing names as independently owned and operated franchised companies within Brookfield RPS’s U.S. real estate network.
Based in affluent Marin County north of San Francisco, Morgan Lane Marin brokered $315 million in sales in 2008. The firms are expected to handle a combined $2.2 billion in sales this year, the companies said, implying that Pacific Union has about six times the sales volume of Morgan Lane Marin.
"I have a couple of investors … who understand the business," said Morgan Lane Marin’s Chief Executive Officer, Mark McLaughlin, when asked how Morgan Lane was able to acquire a larger competitor. "We understand it’s a hand-in-glove opportunity to bring two of the best brands in the Bay Area together at an opportune time, when the markets are starting to cycle back up."
McLaughlin will head up the leadership team of both companies, and Pacific Union CEO Avram Goldman will serve as a "strategic adviser." The goal of the combined operations is to become "the Bay Area’s leading luxury real estate brand," the companies said in a press release.
Pacific Union has 13 offices in locations including San Francisco; wealthy East Bay communities such as Berkeley, Montclair and Danville; and wine-growing regions of Napa and Sonoma counties. Morgan Lane Marin has four offices in Marin County, staffed by about three dozen agents, according to the company’s Web site.
The combined companies will have 17 offices and employ more than 430 real estate professionals, the companies said, and will seek to grow by "retaining and recruiting the industry’s top-producing professionals" and by using the international marketing programs of Christie’s Great Estates.
McLaughlin said no layoffs in management are expected as a result of the deal, which is expected to close in August. Pacific Union will continue to be managed locally by its existing team of executives, the companies said.
Badun revealed last month that the Pacific Union deal was one of three sales of company-owned GMAC Real Estate brokerages in the works, with negotiations to sell Chicago-based Koenig & Stray GMAC also well under way.
Brookfield RPS’s Canadian brokerage brands — which include Royal LePage, La Capitale, Johnston & Daniel and Centract — are not a part of the GMAC Real Estate reorganization.
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