- Independent Arizona brokerage Revelation Real Estate is opening a 20,000 square foot office and lifestyle premises, indicating the industry is still a big tent for different models at extreme ends of the spectrum.
Revelation Real Estate would like to cast its vote for the bricks-and-mortar real estate office, and make it a supersize, please and thank you.
In May this year, the 550 agents with the independent Arizona brokerage and its owners, Chuck and Angela Fazio, will move to a brand new 20,000 square foot premises, an $8 million project currently under construction.
In Chandler, half an hour out of Phoenix in the East Valley, the space will include a state-of-the-art training center, bar and cafe, a Magnus Title company office and conference rooms. The building will also have 6,200 square feet of outdoor patio space.
The office move, a 10-year lease commitment, is raising some eyebrows in the local market. The current trend for brokerages is to make their office smaller or even go virtual.
Chuck said he doesn’t care if people think his brokerage is going against the trend to downsize. “The proof is in my numbers,” is his response.
Agents will be able to sublease office space for teams and in turn defray some of the costs.
The Fazios are certainly putting all their eggs in one basket with this one large office and lifestyle space, but this is their ideal model. They say they have no desire to move to multiple locations.
Work, play, live
The Fazios have planned out the office so that it can work for every type of environment, Angela explains. In Chuck’s words: “Work, play, live.”
Private calling booths, loud active spaces, areas for relaxation, chair massage, recreation opportunities and waiter service throughout the building will all be part of the new location.
The couple has also built a room for collaboration and mastermind accountability groups.
At the “real estate school,” there will be continuing education classes, re-licensing and training activities.
Panels and seminars are also part of the mix, and once a month, client appreciation events will take place, said Chuck.
The Fazios, who believe in working closely with their agents, helping them work their databases and keep up their client “touches,” want the building used regularly for client entertainment. Meanwhile, there will be Friday night get-togethers with vendors.
As Angela puts it: “We already have a culture of high collaboration and community, and our new location will put this concept on steroids.”
Virtual vs. fancy
Dissenters of the bricks-and-mortar model cite shrinking broker margins, the ability to invest in and provide more technology tools to agents and in turn help them close more deals, and the opportunity to offer higher commission splits with money saved from the overhead.
Jared Phillips, managing partner at brand-new brokerage Clockhouse Realty, told Inman: “We quickly realized that by not opening a traditional office, we would be able to offer a much higher commission split to our agents and would also be in a position to offer reduced listing fees to our sellers.”
Big Block Realty, a 100-percent commission brokerage that’s been growing like a weed, falls somewhere in the middle. The company initially thought it would try no offices when it launched in 2012.
Three years later it has three by agent request, and more are likely to follow as it expands north. The reason? Agents wanted more team interaction.
Chuck of Revelation takes a strong stance: “Virtual offices are not healthy — after a while leads start to deteriorate,” he said. “There is a big debate in the industry about going more virtual and getting rid of bricks and mortar. We completely disagree.
“We were created to be around each other.”
At Revelation, new agents either choose a year-long apprenticeship program, which is a 50/50 split for four transactions, and then a 60/40 split for another four transactions. Or, they can choose to come on at 70/30 for their first seven transactions.
There are also two programs for experienced agents, a 90/10 split with a $50 per month fee, and 100 percent commission program that involves paying $350 a month but no transaction fee.
Russ Cofano, president at eXp Realty World Holdings, a virtual operation, says the industry can and will have all kinds of models to suit the community.
His answer to those who say their market wouldn’t stand for an office-less brokerage is: “Those that say ‘the consumer wants this: (insert model here),’ I think, miss that there are many consumer preferences and they, like agents, don’t fall into a ‘one size fits all’ category.”
The one-office model
In 2015, Revelation was ranked the No. 1 single office in Arizona and the 21st largest single office brokerage in the nation by RISMedia, as featured in The Wall Street Journal.
The couple’s vision since launching has been to provide a different environment in a brokerage, a tight-knit culture, excellent customer service and to be about lifestyle.
Their decision not to expand geographically comes back to their culture and their business model.
“We don’t want lots of locations,” Angela said. “We are very passionate about being involved in the way we serve our agents, and it’s not easy to do that in more than one location.”
So what are the numbers?
The Fazios had 450 plus agents when they started as an independent brokerage midway through last year. Prior to that, they were West USA Realty Revelation from 2005 until leaving the franchise in May 2016.
Since starting on their own firm, they have grown to 550 agents. Last year they had a sales volume of $900 million and 3,400 transactions.
The couple, who were in the top 1 percent of producers in the country when working as agents in the early 2000s, hope to have 625 agents by the end of 2017, with a production goal of $1.25 billion, which would require around 4,600 transactions. (The average house price in Phoenix’s East Valley is close to $270,000.)
A former independent company owner, Curtis Johnson, author of Top Dollar brought his team of 25 over to Revelation in October 2016.
He had reached a certain size — his team had 282 sides with $70 million in production last year — and he wanted to take his business further.
“Meeting in a beautiful office sets the tone,” Johnston said. “You are not meeting out of your Mom’s basement. It says: ‘We are professionals, we are here for the long haul;’ it sends a message. People are buying that confidence.”
And whether anyone will be able to get work done with the temptation of bocce ball and the smell of BBQ — time will tell.