Toronto-based Peerage Realty Partners, a subsidiary of private equity firm Peerage Capital, announced Wednesday it had acquired a direct ownership stake in Madison & Company Properties, a boutique brokerage firm serving the residential and commercial real estate markets in the Denver metro area with about 150 agents and staff. Madison was founded in 2008 and has seven offices.
Madison’s founder and CEO, Todd Narlinger, still has a “significant equity stake” in Madison and will continue as Madison’s CEO. Terms of the deal were not disclosed. Both Narlinger and Gavin Swartzman, Peerage’s president and CEO, declined to specify how much of a stake Narlinger retained and Peerage acquired in the deal other that to say “both parties have a very meaningful equity interest in the business.”
This is Peerage’s first brokerage partnership in the U.S., where the company plans to make “several investments” this year and into the future. Expanding its “unique partnership model” to the U.S. real estate brokerage industry is a core part of Peerage’s long-term strategy, said Miles S. Nadal, founder and executive chairman of the Peerage Capital Group, in a statement.
“While the industry is experiencing unprecedented change, our goal is to partner with firms who share our belief in the enduring value of attracting and retaining the best agents and providing them with state-of-the-art tools and resources to provide the highest level of professional advice and service to their clients,” he said.
“From our first meeting with Madison, we knew we had found a partner who shares this passion.”
Peerage’s model is based on “significant retained equity” by its partners, whose leaders plan to be in the business for the long term and want continued operational and cultural autonomy, Swartzman and Narlinger told Inman via email.
“Madison is an independent that has a great leader and a great leadership team that understands the real estate business, delivering exceptional customer service, and solid business acumen,” they said.
“This combined with a culture of success and collaboration has allowed Madison to continue to gain market share and sales volume over the past 10 years, especially given that the firm commenced operations in one of the worst recessions in recent history.”
Peerage provides its partners with “value-added resources and expertise,” such as “[c]apital to support expansion of the existing footprint, the ability to invest further in technology, marketing for their agents and the consumer, as well as for potential further acquisitions. The Peerage team also provides strategic advice and support, along with help in legal, finance, process and operational efficiencies, lead generation, public relations and marketing,” Swartzman said.
Peerage also helps its partners grow their service offerings and increase their value proposition to agents and their clients, he added. When asked what new products or services Madison would offer as a result of the deal, Swartzman declined to specify, saying the two firms “are still working on prioritizing these initiatives.”
Peerage’s investment will accelerate Madison’s expansion and growth plans, which include recruiting more agents and boosting agent productivity as well as acquiring other brokerages in the Denver metro area and other areas in Colorado, according to Swartzman and Narlinger.
“In Peerage, we found an ideal partner with the resources to continue our investments in enhancing our service platform for our agents,” Narlinger said.
“In addition, we also gain invaluable access and business support from Peerage and its network of successful partners. We were particularly impressed by the leading independent brands represented by Peerage’s existing partners, and their long-term track record of owner retention.”
Peerage’s partner brokerages in Canada are Chestnut Park Real Estate Limited, Baker Real Estate, Fifth Avenue Real Estate Marketing and StreetCity Realty and they transact more than $6 billion (Canadian dollars) in residential real estate annually. Chestnut Park and Baker were Peerage’s first partners back in 2007. All four firms remain with Peerage.
“Expansion into the United States is a natural evolution for our firm, as we build upon our success in Canada as a premium operator of full-service brokerage businesses [Chestnut Park and StreetCity] in both the resale and pre-construction sales markets,” Swartzman said in a statement.
“Madison represents the perfect opportunity to initiate our U.S. expansion, given its exceptional management team, strong market position, and abundance of growth opportunities.”