Having brought nearly all of the brokerages that once did business as Prudential Real Estate under its wing, next year Warren Buffett’s new franchise network will fix its sites set on a new target: independent brokerages and companies affiliated with other brands.
That includes overseas firms, says Gino Blefari, who on Jan. 1 will take the reins of HSF Affiliates LLC, the joint venture that runs the Berkshire Hathaway HomeServices, Real Living and Prudential Real Estate brands.
“2015 is going to be all about growth,” said Blefari, who is replacing Prudential Real Estate veteran executive Earl Lee, 69, as CEO of HSF, a joint venture between Buffett’s brokerage company, HomeServices of America, and Brookfield Asset Management.
Since unveiling the Berkshire Hathaway HomeServices brand in March 2013, the network has been focused on converting Prudential affiliates who must eventually rebrand as the Prudential Real Estate name is gradually phased out under the terms of its 2011 sale to Brookfield.
Not only have dozens of independent Prudential affiliates been signing up, but HomeServices of America has acquired some big companies like Philadelphia-based Prudential Fox & Roach Realtors and Chicago’s Prudential Rubloff Properties that are making the switch.
Approximately 85 percent of all former Prudential affiliates have transitioned or committed to transition to BHHS, according to Lee, who is staying on board in an advisory capacity.
That alone has grown the BHHS network to more than 34,000 agents in 47 states. Now, the franchisor is poised to catapult into the global arena and claim its place in the ranks of elite international real estate franchise brands like Re/Max, Keller Williams, Century 21 and Coldwell Banker.
BHHS has a slew of unaffiliated brokerages waiting in the wings to join the network in 2015, HomeServices of America CEO Ron Peltier told Inman earlier this year. The firm just didn’t have the bandwidth to bring them in until taking care of Prudential affiliates who were ready to convert, he said.
The first non-Prudential affiliate to announce its affiliation with BHHS — Fredericksburg, Virginia-based Realty World Select — is planning to roll out new branding for about 70 agents in February.
Pismo Beach, California-based Bishop Hawk Realty announced its affiliation with BHHS on Dec. 18. The 21-agent firm, which will operate as Berkshire Hathaway HomeServices California Properties, acquired a Santa Maria, California-based office already in the BHHS network, bringing its agent count to close to 50.
Independent brokerages may be hot, but the large international franchisors clearly see an opportunity now to rake in business, grow their mindshare and compete.
BHHS launched its national marketing campaign this year, complete with TV ads. Re/Max, Coldwell Banker and Century 21 also rolled out national TV ad campaigns in 2014.
BHHS’s first-ever TV ad ran on cable channels nationwide in 2014.
BHHS could add its first overseas affiliate as soon as the latter part of next year, BHHS President Stephen Phillips told Inman.
Asia is among the burgeoning real estate markets BHHS is looking to set up shop in overseas. “The China market is boiling over,” Phillips said.
BHHS poised to join the group of large global franchisors in 2015
|Franchisor||Countries & Territories||No. of agents|
|Re/Max||95||More than 96,000|
|Keller Williams International||10||Over 107,000|
|Coldwell Banker Real Estate||49||Over 87,000|
|Century 21 Real Estate||78||Over 100,000|
|Berkshire Hathaway HomeServices||1||Over 34,000|
Sources: Realogy, BHHS, Re/Max, Keller Williams Realty
The BHHS brand doesn’t have the international restrictions that Prudential Real Estate had, Lee said. An agreement between Prudential Real Estate’s former owner, Prudential Financial, and Prudential UK restricted Prudential Real Estate’s operations to North America, South America, South Korea and Japan, he said.
In countries where Prudential Real Estate couldn’t use its brand name, it had to rely on a company with a different name — Pricoa — for international relocation business, Lee said.
“Brand is such an important part of building a franchise,” Lee said. “And we just couldn’t do it outside of North America” and the other countries where it was permitted to operate, he said.
Many franchisors operate overseas by selling master franchise agreements to individuals or firms, who contract to provide franchise services to brokerages within a designated region. But Phillips said BHHS may choose to enter into direct relationships with individual brokerages overseas, just as it does in the U.S.
Phillips says BHHS offers its member firms a five-point value proposition:
- A well-respected brand.
- Lead generation, including online, broker-to-broker referrals and relocation.
- Technology and a global network.
- Industry expertise and leadership via the brand’s large brokerage parent, HomeServices of America
- International expansion.
Blefari, who joined HSF in May when HomeServices of America acquired his large Silicon Valley-based brokerage, Intero Real Estate, says he will use his experience as CEO and president of Intero to guide the day-to-day operations of BHHS.
In addition to boosting the productivity of the agents in BHHS’ network, Blefari says he’s squarely focused on making his affiliates, and HSF, more efficient.