Realogy Corp.’s  relocation services subsidiary, Cartus Corp., has acquired Memphis-based Primacy Relocation, expanding the company’s global footprint and putting Cartus back in the business of providing relocation services to the government.

Primacy has 700 employees operating in 25 offices worldwide, who managed 51,000 moves and handled $2.88 billion in funds in 2008, according to the company’s Web site. Cartus has 2,500 employees who managed about 135,000 relocations in more than 150 countries for 1,200 clients in 2008.

Terms of the deal were not disclosed. But the acquisition "will significantly expand our global capabilities," said Kevin Kelleher, president and CEO of Cartus, in a press release.

According to The Relocation Intelligencer LLC, a consulting firm for the employee relocation industry, the vast majority of U.S.-based corporations outsource relocations to third-party providers, and Cartus has the biggest slice of that business.

Although there was a trend to bring relocations back in house in 2008, third-party providers still handled 80 percent of moves for US-based corporations that relocate 25 or more employees per year, The Relocation Intelligencer reported in a September, 2008 white paper.

The white paper estimated Cartus’ market share at 32.7 percent of total moves, followed by SIRVA (12.8 percent), Prudential Real Estate and Relocation Services Inc., (9.3 percent), Weichert Relocation Resources Inc. (8.3 percent),  Brookfield Global Relocation Services LLC (6.8 percent), Primacy (5.1 percent), Capital Relo (3 percent), Graebel (2.7 percent, Hewitt Mobility (2.3 percent) and Altair (2.3 percent).

More than three dozen other companies, each with less than 1 percent of the market, accounted for 14.7 percent of moves, The Relocation Intelligencer estimated.

Kelleher said Cartus’ acquisition of Primacy will also enable the company to re-enter the U.S. government relocation business, "an area of historical strength" for the company.

According to Realogy’s most recent annual report to investors, Cartus notified the U.S. General Services Administration in March 2008 that it was exercising its right to cancel a contract under which it provided relocation services for government employees "at risk."

Under "at risk" contracts, Cartus receives a fixed fee to provide relocation services, which is used to cover all direct expenses associated with the sale of a home — including acquisition, carrying and selling costs. Under "at risk" contracts, Cartus also bears any loss on the resale of the home.

With home prices falling, Cartus started losing money on the at-risk government contract in 2007, and canceling the agreement  "significantly reduced the company’s exposure to the purchase of at-risk homes," Realogy said.

The wind-down of the government at-risk portion of Cartus’ business was "substantially completed" by the end of 2008, and was the main factor in a $51 million drop in revenue from at-risk relocations for the year, the company said in its annual report. …CONTINUED

By the end of 2008, "no risk" contracts — in which clients reimburse Cartus for all direct expenses associated with a home sale, and also bear the risk of loss on the resale of the employee’s home — accounted for 99 percent of Cartus’ business.

According to Realogy’s most recent quarterly report to investors, the company’s relocation services segment generated $92 million in revenue during the third quarter of 2009, a 29 percent decline from a year ago. The wind-down of the government portion of Cartus’ at-risk relocation business accounted for an $18 million decrease in revenue for the quarter, the company said.

The acquisition of Primacy will "firmly position" Cartus as "the leading relocation services provider to the government sector," Realogy said today.

The relocation business in general has been hurt by falling home prices, as employees at corporations served by relocation companies have become more reluctant to accept transfers because of fears they will lose money if they sell their home, or have difficulty financing the purchase of a new home (see story).

Realogy said the total number of transferred employees it served during the third quarter ("initiations") fell 16 percent from a year ago, to 28,871. Referrals to real estate brokers that generate revenue for Cartus also fell 7 percent, to 20,320.

In the first nine months of 2009, initiations fell 18 percent from the same period a year ago, to 89,622, and referrals were down 15 percent, to 48,388, Realogy said.


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.
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