Compass opened offices nationwide in 2018, but they won’t be going into any new markets in 2019, according to CEO Robert Reffkin.
Compass opened offices nationwide in 2018, but the company won’t be going into any new markets this year, according to Compass CEO Robert Reffkin. The brokerage, instead, is drilling down into its current markets with plans to hire more managers and support staff in 2019, he said.
Reffkin sat down with Inman founder Brad Inman for an invite-only discussion at the iconic Carnegie Hall as part of Inman Connect in New York City on Tuesday and confirmed that Compass is going deeper in its current markets and won’t be expanding into new markets.
“For us, this year, we don’t want to spread ourselves thin,” Reffkin said. “Last year we did a bit.”
In certain markets, including Dallas, Reffkin expressed satisfaction with the launch. In other markets – which he didn’t reveal by name – three main issues surfaced: under-supported marketing, not having the right managers and less-than-perfect office space.
Part of Compass’ growth was also fueled by major acquisitions. Compass, flush with venture capital funding, was able to make major acquisitions – like that of Pacific Union – but Reffkin revealed that Compass won’t be spending as much on acquisitions this year.
“We will have acquisitions this year, but in this environment, where the equity markets are softening … we’re not going to be spending as much last year,” Reffkin said, clarifying that he means they won’t pay as much for their acquisitions.
When Inman asked if Compass has any big acquisitions coming up, Reffkin said, “We have things in the pipeline.”
Inman also asked Reffkin about the discrepancy in bonuses paid to agents that are recruited by Compass, versus agents that come over through acquisition. Reffkin admitted he gets a lot of emails about that very topic.
“I care about every agent,” Reffkin said. “When they’re on the phone and they’re saying, ‘Why don’t I get what that person got, it creates a lot of complications.’”
The SoftBank Vision Fund has been one of the leading investors in Compass’ two most recent funding rounds, and Reffkin said that he wasn’t worried about their recent decision to slash the amount of funding it was providing WeWork.
“I’m not worried about that,” Reffkin said. “We’ve had six rounds so far. There’s plenty of people in the world that want to invest in companies.”
Reffkin also weighed in, once again, on the controversy surrounding SoftBank’s financing by Saudi Arabia’s sovereign wealth fund, in the wake of the death of Saudi journalist Jamal Khashoggi.
“I think there’s nothing about that, that is okay, from a human level and from a business level,” Reffkin said, repeating similar statements he made in October. “There’s nothing about that, that I support. It makes me consider what I want to do in the future.”
Reffkin spoke about the strength and state of multiple listing services (MLS) across the country, expressing concern that portals and brokerages like Redfin, which invest in search technology, are pulling agents away from the multiple listing service.
“Our agents and our brokerage firms are getting pulled off the MLS to aggregators and Redfin,” Reffkin said.
It’s an issue in Reffkin’s eyes because the MLS works for the agents, whereas the portals and Redfin’s consumer is the real estate agent’s client.