An asset management company that specializes in bank-owned homes has launched a national network to help real estate brokerage firms work with institutional investors interested in distressed properties.
Member firms will be selected by the company, Carrington Property Services. Only firms ranked in the top five in their market in terms of transactions and sales volume, and that have the infrastructure in place to manage business from institutional investors such as banks or pension funds, will be eligible to join the Carrington Property Network (CPN), the company said in an announcement.
Short sales and real estate-owned (REO) homes have accounted for between 25 and 30 percent of overall home sales in the past three years, the company said, and CPN will train and support its members to take advantage of this high-demand market segment. Member brokerages will have access to Carrington’s institutional real estate services, REO listings, short sale leads, investor buyers, and property management and broker price opinion (BPO) services.
"There’s an opportunity that a lot of these brokerages simply haven’t been able to take advantage of in terms of institutional business," Rick Sharga, executive vice president at Carrington Mortgage Holdings, told Inman News. Carrington Mortgage Holdings is a subsidiary of Carrington Holding Co., the parent company of the Carrington family of companies.
The network will allow brokerage firms to complement their traditional resale and relocation services with institutional real estate services, the company said, and Carrington will be able to expand its coverage and offer those services to its customers.
"Really we think it’s a win-win," Sharga said.
Others have tried to put together networks of REO agents and brokers before, he said.
"This is different in two ways. One, we’re not targeting the individual agents; we’re targeting established and successful brokerages in these markets which we think will provide a higher level of service for our clients, and the other is that our definition of institutional business goes beyond just marketing REOs."
The company’s investment group, Carrington Capital Management, raised $450 million earlier this year to buy foreclosed homes to manage as single-family rentals.
"The (CPN) brokers will help us identify and purchase those properties," Sharga said. "They may also work with us in managing the properties once they’re established as rental units and we believe that the brokerages will also be very good at helping us execute short sales, which typically isn’t a specialty of a traditional REO agent."
Carrington owns brokerage firm Atlantic & Pacific Real Estate, which has 30 offices in 22 states and primarily handles REO properties. Carrington is going to "great pains" internally to make sure the network is not competing with its brokerage business, Sharga said.
"You obviously can’t cover the whole country from 30 offices, so we have a lot of opportunity to complement the Atlantic & Pacific offices with Carrington Property Network licensees," Sharga said.
"It’s very likely that our initial CPN members will be in markets where we don’t have any Atlantic & Pacific presence and we’ll obviously be very careful about not overlapping in markets where we do have a presence."
The first brokerage to sign onto the network is Prudential Select Properties, which has 10 offices and more than 600 agents in the St. Louis metro area, according to its website.
"We’re excited about the potential opportunities for business expansion that CPN represents," said George Bruns, the brokerage’s president and CEO, in a statement.
"We believe that partnering with Carrington will open doors for us in the institutional real estate market, and allow us to build on our already-strong residential brand."
Sharga said he did not have exact pricing for network membership fees immediately available. "Prices are available upon request from interested brokerages," he said.