Realty Executives renegotiating office leases

Owner reassures agents after employees locked out of 2 offices

Realty Executives owner Richard Rector is assuring the Phoenix-based brokerage’s agents and brokers that their closings, commissions and clients’ earnest money deposits are not in jeopardy after agents were temporarily locked out of two offices as the company renegotiates leases with landlords.

The brokerage, ranked by Real Trends as the 11th largest in the nation in 2009 by number of closed transaction sides, dismissed three top executives in January: CEO Glenn Melton, supervising broker Sandy Young, and Chief Financial Officer Karen Dunham.

"It’s no secret that the Arizona real estate market has suffered and, as such, we have needed to adapt to that," Rector said in an email to brokers and agents this week. "Any staffing and operating changes made during the last three months were done with the intention of returning Realty Executives to break-even cash flow."

Realty Executives is in the process of renegotiating office leases with "various landlords" with the goal of reducing rents "to be more consistent with current market values," Rector said in the email, which was sent after employees were locked out of the company’s North Scottsdale and Arrowhead offices.