This is story of Climb Real Estate from my perspective. The story of how a couple of “Jersey Boys” from Bergen County, New Jersey created Climb working out of a dingy live-work loft in San Francisco’s South of Market (SOMA) district, to building one of the top-selling independent brokerages in the U.S. and then, being bought by the leading real estate holding company in America with announced plans to franchise nationwide?
Well, thankfully, for me this story has a happy ending, but it almost didn’t happen that way, and it was a lot closer to disaster than anyone could have imagined.
2006: The boom that would be
The San Francisco Bay Area is indisputably the world’s tech and innovation capital, and in the mid-2000s, San Francisco was booming, driven by the high-flying tech industry. To support that growth, the city needed new housing — lots of it.
At only 7-by-7 miles, San Francisco is one of the smallest “big” cities in the U.S. There just isn’t a lot of land to develop. Plus the city has somewhat of an identity crisis of what it wanted to be: Some wanted to keep it the same, small, quaint, a charming San Francisco; they don’t want another “Manhattan.”
The other side wanted more housing choices and affordable office space. However, all of the venture capital-backed tech companies, with their promise of high-paying jobs and new tax revenue for the city, which would go toward paying for its aging, were pushing the city to redevelop underutilized areas of the city to find a place for all these techies.
It would need to build up, vertically, New York City-style. The only place to really do that was in the southeastern quadrant of the city otherwise known as District 9: the sub-districts of South of Market (SoMa), South Beach, and Mission Bay, a traditionally industrial part of the city much of it formed from filling in San Francisco’s harbor — yes, as in landfill (hear of the sinking Millennium Tower?). These key sub-districts were slated to be completely and radically transformed, changed forever. The city rezoned a swath of these areas for high-density housing and 30,000 housing units were quickly in the development pipeline.
There was opportunity here.
Humility in humble beginnings
I started to build a mini real estate investment empire not just in San Francisco but also in Phoenix, Las Vegas, Austin, one property at a time. I was buying investment properties and renting and flipping them.
In San Francisco, I met Christopher Lim at an open house where he promptly picked me up and brought me over to the city’s largest new development condo at the time The Beacon.
Building wealth by building a portfolio one property at a time is a long-term game, and I quickly found it was taking too long to build up enough of a portfolio of properties that would make an impact on our financial situation. I was starting to get impatient.
One day, Lim persuaded me to get my real estate license, telling me that he thought I’d make a good real estate agent.
Honestly, back then, I took it as a bit of an insult. At the time, being a real estate agent wasn’t exactly a high-status career — maybe a step higher than a used car salesman — and, in some ways, not much has changed about that perception.
Despite that, I still got my license, thinking it would supplement my real estate investment aspirations. I started working with him, and we quickly became close friends. I joined Keller Williams in San Francisco, where I was doing quite well — in fact, I was a natural, selling 20 condos and doing almost $20 million in volume my first year.
Finding my why
Around this time, my first son Mason, was born. He was laying on the delivery table, when the reality of the situation hit me: Life immediately got very real. All of a sudden, I was responsible for the welfare of a new human being.
My wife, Julie, couldn’t work anymore, nor did I want her to. Mason needed his amazing mom, and he was our priority. The pressure to make something happen in my business was on.
Even though I was doing well as an individual, independent agent, I eventually came to the realization that this wasn’t going to make the real difference. My family deserved more. I needed to do something bigger — now.
Being an agent at Keller Williams, it’s impossible to escape their world-class training — and to me one of the best reasons to be there. Gary Keller is a true pioneer and visionary in the industry, and his bestselling book The Millionaire Real Estate Agent left an indelible mark on my psyche.
Keller teaches how to build systems, processes and teams — to bring order to this chaos of being a real estate agent, it sparked a question: Was I meant to be a “lone wolf” real estate agent?
This ignition of thought was an epiphany.
I knew what I wanted to do, what I had to do. I decided that we had build a real estate brokerage. Not just that: We would have to set up shop in probably the greatest concentration of residential housing development in the United States at the time and target the sub-districts of SOMA, South Beach and Mission Bay. We would have to live, breathe and dream about District 9.
There’s more to this opportunity than meets the eye
Yes, the city was planning on allowing more housing to be built in District 9, but there’s more to this opportunity. Let me explain.
Back in 2006, there were existing brokerages and agents serving the area, but there weren’t any dominant players. You had large independent brokerages like Zephyr Real Estate with a decidedly uninspiring and poorly located office on a long “mid-block” with little foot traffic.
Independent Vanguard Properties had a lot of sales, but no physical presence in the area (it just wasn’t their focus). You had a small boutique urban shop in “Lofts Unlimited” founded by visionaries Gail Stark and Ray Kalisky.
And there were some traditional brands with after-thought offices with not much of a focus on owning the area. Mixed in were some individual agents who were dominating sales in a neighborhood or condo complex.
Paul Lobosco of TRI Coldwell Banker, back then considered to be the most prestigious brokerage in the city. Lobosco literally owned sales in the crown jewel of South Beach, The Brannan, a 336-unit, posh, sophisticated and timeless complex designed by legendary French designer Christian Liaigre.
A great majority of sales needed to go through him, and with every listing he had, buyers, sellers and agents increasingly became dependent on him as he effectively controlled the market there.
He was so dominant and synonymous with that market that his name became a verb in the local agent community: Lobosco /lo-baas/co/ verb: to take over sales in a building or a neighborhood, to dominate a building.
His success was so profound and unique that it really stuck with me. I kept thinking of how we needed to take his model one step further and “Lobosco” District 9. Combining Gary Keller’s team model with Lobosco’s focused market domination, I started drafting a business plan.
Urban customers underserved
Although we were Jersey Boys, our sensibilities were really all New York City. We grew up in and around the greatest collection of “urbanness” in the world. We felt like we knew what the urban-dweller wanted, and we wanted to bring more of it to San Francisco.
That meant: industrial live-work lofts (both of the exposed concrete and brick and timber variety), high-end lofts with sophisticated interior design, furniture, lighting and high-end architecture. Also, full-amenity modern high-rise buildings, super-luxury condo living. Graffiti not as vandalism, but as art.
Big-box retailers? No. That was out. Urbanness does not reside in a mall, it’s a discrete alley. These customers were also sophisticated and refined. They were city people living the city lifestyle.
The only brokerage really serving this demographic was Lofts Unlimited. With a communal, eclectic group of excellent agents each with an individual personality that really sourced an interesting culture we just hadn’t seen before. Lim and I enjoyed working there and with them. Unfortunately, things changed when they sold and new management came in.
‘Mr. Potter’ Takes Over
Lofts Unlimited was purchased by someone who I consider the equivalent of “Mr. Potter” from It’s a Wonderful Life. He was an ex-banker, who felt to me like he had more of a desire to line his pockets than take care of his agents.
He nickel-and-dimed us every time we wanted to print property fliers. He would leave the office at 3:30 p.m. while we would toil away through the evening just so he could take an increasing chunk of our commission checks. We were getting resentful.
The place changed, we didn’t particularly like paying for his silver Mercedes convertible any longer, and we decided the time was right. Two Jersey Boys felt that San Francisco was ready for and needed an urban real estate brand.
How did we propose to do it?
Here are the three keys we zeroed in on:
Laser-focus on District 9
District 9 was underdeveloped, and there were plans for massive development. Even more specifically, 9H South Beach was slated to have the most high-rise luxury condo buildings built in the city.
I figured that after the full development of the entire district, it would be the No. 1 district in the city, surpassing Pacific Heights and Noe Valley in total sales volume as well as District 9.
In 2006, District 9 represented roughly 16 percent of residential sales (just over $1 billion in total sales volume). In 2018, District 9 commanded 1 out of 4 sales in the city (just over $2 billion in total sales volume).
Create a fresh new brand
There needed to be a fresh urban millennial brand that would resonate with a new generation of homebuyer and seller. The traditional brands were not reaching this new generation who loved their $5 organic coffee from Philz, Ritual and Blue Bottle and stereotypical “avocado toast.”
Lim had something in mind and developed the amazing Climb brand (that eventually Realogy fell in love with and planned to grow nationally).
Brokerages and agents were not fully utilizing technology
With a master’s degree in electrical and computer engineering, and experience as a programmer, everything about the process of real estate was looking like a nail dying for technology to hammer it. There was so much opportunity to use real estate technology to better the experience for agent, brokerages, buyers and sellers (and still is).
The beginnings of Climb
Lim and I teamed up to officially start Climb. We set up an office in a dingy live-work loft at 175 Bluxome, a dodgy alley right near 5th and Townsend (think the CalTrain station). It had most of the creature comforts (and some of the creatures) we’d need to start our collaboration.
Lim is a master at branding, marketing (having spent a prodigious early career at Grey Advertising) and real estate sales (he was a top-25 agent in the city, and yet he didn’t even know it). He is truly gifted, and to this day, I have yet to meet many better than him at those three things.
With my engineering background (I was researching and building neural networks back in the early ’90s when it used to take a week for a Pentium computer to learn what it would take a computer 3 seconds today).
I was a natural born entrepreneur. As a kid, I’d sold fireworks, chocolate bars, had a large newspaper route spanning 10 blocks, started a landscaping company, shoveled snow, among other ventures and, more recently, was coming off my first tech startup — a dot-bomb in the first tech boom in 2000 called Gecko Travel, an early version of what is today TripAdvisor. I was also a budding top-producing real estate agent.
That year, we built “Climb Real Estate Group,” a team of seven agents with a focus in District 9, and we set up shop at James Nunemacher’s Vanguard Properties.
Nunemacher and his staff were very gracious and took us in and under his wing. He’d built an outstanding brokerage and brand in Vanguard with a loyal cadre that would follow him to the end of the earth. He had the foresight to invest in San Francisco’s Mission District, renovating an old bank in the heart of it before it became the hipster-techy Mission of today.
He transformed it into one of the most fantastic office spaces we had ever seen: glass walls, a floating glass jewel-box conference room over the middle of an open atrium, beautiful and tasteful finishes everywhere. There was also a completely restored bank vault turned into a private dining and meeting room. It was sophisticated, modern, luxurious and simply stunning. It was seductive, and Lim really wanted to join Vanguard.
We were adding members to our team fast. Lim and I decided we needed to add a third partner (Tiffany Combs) to handle our growth. She was the complete package and a rising superstar in her own right: a great salesperson, ambitious, strategic and rigorous.
She helped us put in sales management, risk management (legal) and accounting systems in place. When we went independent, she was our managing broker, and she kept us out of legal trouble with an unparalleled skill for managing and training our agents to be ethical and lawful agents.
We focused most of our attention in capturing market share in District 9 and, specifically, South Beach 9H, the North East corner of San Francisco.
To live and die by District 9H
As far as my own real estate business, I felt District 9 was just too big of a district to focus on: District 9 today represents 25 percent of the sales in the entire city of San Francisco. With that in mind, I understood that I needed a tighter target.
I decided to focus on South Beach (9H). Not just that: Inspired by what Paul Lobosco did at The Brannan, I wanted to “Lobosco” (dominate) this new 650-unit luxury high-rise built by world-class architecture firm Arquitectonica and developed by New York City developer, Tishman Speyer. It was one of the, if not the, largest residential condominium complex in San Francisco.
The Infinity: Sky-high gemstones in South Beach
The Infinity was (and still is) an absolute stunner: a gorgeous, curvy, emerald-green glass complex consisting of two towers (one 42 stories and the other 38) commanding the skyline above San Francisco’s urban sprawl. It was destined to be the crown jewel of the district — and when the sun shone on it just right, it looked like just that: a shimmering gemstone.
I immediately moved in with my family. From then on, nothing except the Infinity mattered. I believed that if I could dominate the Infinity, we would own South Beach. If we owned South Beach, we would own District 9. And with District 9 poised to explode, we would quickly rise through the ranks of top brokerages.
2010: The year we went ‘indie’
In the midst of the Great Recession and the housing crisis, we decided to go “indie” and opened our HQ office in San Francisco’s Design District. Lim, his talented sister, Stacey Lim and a team of designers did such an incredible job designing the office, with brilliant ideas trying to turn a conventional office space into a home that agents and their clients would absolutely love.
Each of the drop-in conference rooms had a design theme inspired from a neighborhood in the city: We had one that made you feel like you were at the opera (Civic Center/Opera District), another modeled after a night club in the Castro, yet another after a classic mansion in Presidio Heights; however, my favorite room “Forest Hills” featured a living wall and a ceiling that emulated the ever-present fog shrouding the neighborhood. Suffice to say, when agents saw it, they were in awe.
There weren’t any assigned desks. There weren’t any office landline phones. There weren’t any cubicles. Some agents were confused. Climb agents loved it; the concept better fit with today’s style of working: the use of open spaces, a mobile lifestyle, collaboration, helping one another as one big Climb team. They loved working and collaborating there, bringing in their clients or showing it off to their families and friends.
That year, we were honored to be ranked 14th in sales in San Francisco. Things were beginning to move at a breakneck rate.
2011: Location, location, location
In 2011, Climb unveiled its Airstream Mobile Office. This was inspired by the disruption that the food truck craze was causing in the restaurant and food industry at large. If food trucks could go to where the action was and do business, why couldn’t real estate? Why couldn’t we?
Of course, I wanted a cheap beater that barely held together or ran — maybe like the one Jon Favreau buys in Chef, but Lim emphatically said, “Over my dead body.”
He found and restored an Airstream camping trailer, and soon, we were showing up to open houses and events, transacting, touring or just being good neighbors in the classy comfort of a very unique, eye-catching and gorgeous office.
2012: Climbing the ranks: No. 10 in San Francisco
Fueled in part by a booming tech industry, the San Francisco real estate market was positively on fire. The strategy to focus on 9H had been instrumental in our capture of District 9, and the massive growth of our brokerage.
Climb was also uniquely positioned as a tech-forward brokerage, appealing to the wave of wealthy tech executives and employees flooding the market.
That year, we were ranked the No. 10 brokerage in San Francisco.
2014: A new horizon
During 2014, we started engaging in talks about a merger/acquisition/partnership with a brokerage known for selling “new developments” — mostly large condo developments — Climb’s bread-and-butter.
One aspect of our growth and market-entry strategy was to focus aggressively on representing buyers in these new projects, sometimes representing upward of 30 percent of the total sales in the building — giving us instant neighborhood market share. A buyer lives in a condo unit (roughly 90 percent of condo sales are one-bedroom or two-bedroom units), and probably 60 percent of owners will live in the unit between two to approximately seven years.
During our discussions, it was hinted to us that we really should consider partnering because there would be a new wave of brokerages armed with proprietary technology funded by venture capital looking to disrupt the current real estate brokerage model.
“Urban Compass,” was one of them, and they had San Francisco in their sights. Despite Climb being known as a tech-forward company with new innovative marketing and a fresh brand, we quickly realized that if Urban Compass was to come to San Francisco (as it was widely quoted as having plans to do so), we would not be able to compete with its venture capital money and aggressive agent acquisition strategies. They would be the new it thing in town, with fresh marketing and proprietary tech.
At the time, it had raised $60 million in VC funding, which was an ungodly figure at that time. I knew we either had to partner with them or fight them. (As of this article writing, it has raised $1.5 billion).
For the next year, I kept a close eye on Urban Compass. It dropped “Urban” from its name in favor of simply: Compass.
Forwarding every new article about Compass’s expansion to my partners, as well as allegations of aggressive and unethical recruiting practices, theft of trade secrets, rumors of big signing bonuses, the fact and fiction of groundbreaking tech, and future plans as to which markets they would target next — my emails acquired a rising tone of urgency.
Through some connections to one of the co-founders, I was able to get an early meeting with Robert Reffkin in San Francisco and then a follow-up meeting with Compass’ leadership team in its headquarters on Fifth Avenue in NYC.
Being in their swanky New York headquarters on Fifth Avenue in Union Square, we were able to see just how real they were. With dozens of software developers building next generation software for agents and brokerages, large marketing and advertising teams pumping out fresh branding and marketing material, armies of support staff for their agents — we saw firsthand just how legit it was.
Never mind that its operation was wildly unprofitable; it was building for the long term. It remains to be seen whether it can ever build a profitable business the way it has set about doing it.
But the bottom line is this: It was and still is playing by a very different set of rules than the rest of the industry was, and it’s going after market share over profitability in the short term to hopefully reinvent the brokerage business as we know it.
Regardless, that year, we were still rising the ranks back at home and were pleased to be recognized as the No. 7 real estate brokerage in San Francisco and in the top 25 for the entire Bay Area.
2015: Climb Labs, Million Dollar Listing and fending off Compass
We always believed, and still do, in technology, innovation and experimentation. So in 2015, we launched Climb Labs — an incubator that’s home to the latest in real estate tech.
We already had a pool of agents who were eager to test early products, and our culture of fast adoption led us to have a national reputation as a tech-forward brokerage, which software startups highly desired. We were able to test and try products early and give our agents (and clients) an edge while providing software vendors the valuable feedback they so desperately needed.
Having a technological edge only attracted more agents. We had a great portfolio of cutting-edge tools, for example:
- We were the first brokerage to trial Matterport, the immersive 3D virtual walkthrough photography company now ubiquitous across the nation.
- We were one of the earliest adopters and supporters of RealScout (the venerable buyer collaboration platform).
- Early adopters of Eva Bot (the fastest way to send the right gift to your client).
- Disclosures.io, which started out as a way to handle massive disclosure documents to sell homes, has since become a generalized platform for agents to sell property over in the Bay Area and beyond.
- First.io an amazing app that utilizes predictive analytics and big data to turn the concept of a CRM on its head and tell you with five-times the accuracy when anyone in your contacts is thinking of selling their home.
The list goes on …
Our foray into television also happened in 2015. We were featured on BravoTV’s Million Dollar Listing with one of our agents Justin Fichelson. It was a bit of a challenge to get relatively modest San Francisco buyers and sellers to appear on camera, show us their home and bare all the details of the transaction surrounding it!
Maybe, real estate in San Francisco doesn’t make for quite as interesting a show as Los Angeles or New York does. And maybe we should stick to real estate. Nonetheless, it was a great exposure for Climb on a national TV show, but unfortunately, the show was not renewed for a second season.
The spectre of ‘Compass’
The reality of a Compass – San Francisco was becoming more and more apparent, and it was making us increasingly nervous. We began exploring our options: grow ourselves in the Bay Area, expand outside of the Bay Area (we met with top agents and leaders of brokerages in Lake Tahoe, Napa and the North Bay, Palm Springs, in the East Bay and as far east as Sacramento and Los Angeles), franchise, license our brand, acquire or merge with other brokerages as well as us being acquired.
We started meeting with the best brokerages and brands in the country: APR (Alain Pinel Realtors) the venerable SF Bay Area brand headquartered in Silicon Valley’s Los Altos and ranked No. 6 nationwide (acquired by Compass in early 2019), Pacific Union, another giant of SF (acquired by Compass earlier this year, as well).
We also met with the impressive leadership team of Windermere out of Seattle who were looking to enter San Francisco, as well as Intero, a big “South Bay” real estate brokerage (acquired in 2014 by HomeServices America, a Berkshire Hathaway company). We also had the great pleasure of meeting with David Liniger, the pioneer founder of RE/MAX, and its leadership team to discuss creating a new Climb + RE/MAX venture that would target an area where the venerable RE/MAX had problems penetrating: the city.
We flew out to Austin to meet Chris Heller the CEO of Keller Williams (today the Chief Real Estate Officer at OJO Labs). We met with NRT, the brokerage division of Realogy (the largest real estate operator in the U.S.) and the owner of classic real estate brands and franchises such as: Coldwell Banker, Sotheby’s International, ERA, Better Homes and Gardens, Century 21, and Corcoran out of New York — a company Lim and I looked up to in our days living in New York in the mid- to late-’90s when Barbara Corcoran was the queen of NYC real estate.
After much negotiation and dealing with multiple offers and proposals from various brokerages, we struck a deal to sell to NRT, a division of Realogy, the largest real estate company in the US.
NRT had a vision for Climb that matched ours: Climb Real Estate in all 50 states. It would keep the brand intact and grow it nationally. Additionally, and importantly, it would give us the autonomy to realize our ultimate vision for Climb.
Meanwhile, with the ink on the contract still wet, old brokerages were after our top agents, and we were also starting to get attacked by new competition in town.
Keller Williams was up first, the No. 1 real estate franchise in the country by total sales volume, on its third try to crack San Francisco. It had renewed zest and vigor with new leadership and poached a not-so-insignificant chunk of our agents: three of our top 10 agents, I believe about 10-15 agents left for KW’s new SF office, about 25 percent of our total sales out the door. This was all happening during the due diligence period of our acquisition. Not fun times, I will say.
On top of that, Compass was preparing to enter San Francisco, with $133 million of venture funding raised thus far, the day we feared was fast arriving. Its recruiting staff was calling and recruiting top agents all over the area.
Appointments were being set for Robert Reffkin to meet personally — he met agents one-on-one. We kept hearing of big agents in San Francisco leaving for Compass, and we just thought it was only a matter of time before they started coming for our agents.
We also worked very hard to keep ahead of the situation, meeting with our agents trying to “lock them down” and make sure they were in good spirits and could see a bright future with Climb. We wanted to hear if they were talking to Compass or KW — we had to make sure not a single agent left for Compass.
We felt that once one goes, the floodgates could open from there, jeopardizing our aspirations of joining the Realogy family.
2016: Nearing a precipice
This was another massive year, for a number of reasons. Development in District 9 was at a frenzy, with more and more tech companies calling San Francisco their HQ. All the major tech companies were creating San Francisco presences: Google, Twitter, Facebook, Airbnb, Uber, Lyft, Pinterest, Salesforce, Stripe, Dropbox, Slack, the list is endless.
This created a huge demand for housing. Mission Bay was heated and almost all of the land was developed or planned to be developed including plans for a new home for the Golden State Warriors. Awards for innovation, branding and sales started to flow in as well. From Inman Innovator, SP2017 Trendsetters, RESAAS Innovator, and others, Climb was being widely recognized within the real estate industry.
We also cracked the Top 250 brokerages in the entire U.S. that year (No. 242 in Real Trends 500), doing $1 billion in volume, with just 110 agents, making our agents some of the most productive in the country — attributed to great tech, a business model and market that really maximized sales per agent, our initial business plan was playing out to a tee.
As we were racing to close the deal with Realogy/NRT, Compass kept knocking on our door (on our agent’s door to be more precise). It seemed as if every day there was a report of a meeting with Robert Reffkin with one of our top agents. We were really cutting it tight. The Realogy acquisition of Climb was announced on Aug. 31, 2016.
Two days later, Compass announced San Francisco’s new office.
2019 and beyond: Innovation stops for no one
At Climb and Climb Labs, I was lucky enough to be immersed in and connected to technology, inspirational forward-thinking, great partners and great agents and innovation every single day.
From the brilliance and tenacity of my colleagues and peers, to the imagination and intelligence of innovators as well as all they inspire and beyond — I believe that having an incubator for technology, especially for the specific needs of the real estate industry, run by top real estate professionals is my calling.
I believe that at the intersection of knowledge, imagination, deep professional experience, the burning desire for excellence and the advancement of our craft, we can create a flashpoint for our potential in this industry and beyond.
A few lessons I’ve learned:
- Find your north star: Get everyone to relentlessly pursue that. At Climb, we pursued market share in District 9. Focusing on being the top brokerage in the fastest growing part of San Francisco knowing full well that if we were to succeed at that, only good things could come.
- Everyone can be world-class at something — find it: For us, it wasn’t doing things the old-fashioned and traditional way, but really finding new solutions to the age-old business of real estate. We tried everything, not everything worked, but the things that did work were huge successes and defined Climb.
- You don’t need millions of dollars or millions of fans. You just need thousands: At Climb, we designed a brand and a brokerage that catered to a small group of raving screaming fans. You can’t make everyone like you, but just make sure just enough do. That’s all we needed.
One final lesson in all of this is to find your personal north star or your big why, and for me, that is providing for my family. Mason, who was just born in the beginning of this story is now 13.
Using the lessons I have learned, from a rookie agent to a top producer to a brokerage owner, I’m off on a new journey, HighNote Labs, developing great tools to change the real estate industry. Our vision is to simply make the real estate industry better with incredible tools for the top agent and the brokerage. Great tools for agents, by agents.
I can personally attest to the frustrations and limitations that I have encountered throughout my career. As the co-founder of Climb Real Estate and Climb Labs, I learned in full-color detail that no two agents are the same, and all require their own combination of specific tools and techniques. At Climb Labs, I feel we got close — but there’s so much more to be done.
Now, with HighNote Labs, I feel we’re just getting started with real estate tech and innovation — and I couldn’t be more excited to see where this takes us.
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