Corcoran announced Wednesday that two major indie brokerages are combining to create the company’s first franchise affiliate.
Zephyr Real Estate, the largest San Francisco independent brokerage — and among the top 100 U.S. brokerages in sales volume — and Oliver Luxury Real Estate in Lake Tahoe and Reno are combining to create Corcoran Global Living.
The combined brokerages make Corcoran’s first franchisee 450-agents strong, with 13 offices and a combined 2018 sales volume of more than $2.6 billion, according to Corcoran. At the helm will be CEO Michael Mahon, the founder of Global Living, a coalition of indie brokerages.
“We’re getting the best of both,” Pam Liebman, the CEO of Corcoran told Inman. “We have [Mahon] with his incredible resume and past and then we’re getting two established brands coming under great local leadership to establish Corcoran Global Living.”
“Then, of course, they’ll all get the benefit and the power of the Corcoran brand,” Liebman said. “So you’ve got an amazing operator, two well-known brands with strong market share affiliating with a powerful brand like ours. It’s a tremendous win for everybody.”
Corcoran, which operates Realogy-owned brokerage offices in New York and Florida, is heading west with its first franchise, a place where the company does already have tremendous brand recognition, according to Liebman. When the company decided in January 2019 to begin franchising, it conducted a blind brand study and the results, according to Liebman were eye-opening.
Part of the reason for the brand’s strong national and global recognition is that luxury buyers are often nomadic and own more than property. There’s also Corcoran Sunshine Marketing Group, which has made national headlines with major new development property sales. And of course, Barbara Corcoran’s major national presence helps.
“Our brand recognition is huge in all parts of the country,” Liebman said. “It doesn’t hurt having Barabara Corcoran on Shark Tank, so people definitely know the name.”
Zephyr Real Estate, which finished 96th in sales volume in 2019, according to the Swanepoel Mega 1000, a ranking of top brokerages by 2018 sales volume, has been a sought after indie in an increasingly concentrated San Francisco Bay Area market.
Compass was at one time allegedly so interested in acquiring Zephyr Real Estate — and then subsequently attempting to lure away its managers after the acquisition didn’t work — that Zephyr Real Estate sued Compass for its aggressive tactics.
Zephyr Real Estate will now be under the Realogy Franchise Group umbrella. Realogy is also suing Compass over its allegedly aggressive marketing and recruiting tactics.
Oliver Luxury Real Estate, meanwhile, has roughly 50 agents and operates in the Reno, Nevada and Lake Tahoe area. Sales volume for the company was not immediately available, but Zephyr Real Estate closed roughly $2.4 billion in 2018, according to the Swanepoel Mega 1000, putting Oliver Luxury Real Estate somewhere in the $200 million range.
For Mahon, who also previously held top executive positions as president of the independent brokerages of HER Realtors of the Midwest and First Team Real Estate of Southern California, told Inman that, what’s been missing from the Western region — and the industry at large — is big indie brokerages and larger teams coming together, “with the unified purpose of really making a difference in the community, having the family feel, the cutting edge branding, that is set up to totally make a difference in the communities we’re representing.”
Those markets, especially San Francisco, have become more competitive in recent years. Compass acquired Alain Pinel Realtors, Pacific Union International and Paragon Real Estate in 2018 and 2019. In 2014, Intero Real Estate Services was acquired by HomeServices of America.
I think competition has a lot to do with [the affiliation], in terms of being able to provide the latest in resources in support of our sales associates growth and personal investment,” Mahon said. “The overall marketplace, the margins for real estate brokerages, are only getting tougher and tougher, as well as that for sales associates in terms of promoting their own businesses.”
“Having a unified platform, and the services being provided particularly by Corcoran, does provide a big edge when it comes to being able to compete,” Mahon added.
Corcoran was mum about revealing the total number of franchises sold since the company started franchising a year ago, but Liebman said there are more announcements coming soon. Mahon, said a number of other brokerages will be affiliating with the company soon.
“We’ve chosen Corcoran to be that unifying brand of what’s bringing us as indie brokerages together for one purpose and one voice,” Mahon said.
Finding major indie brokerages to affiliate with Corcoran, rather than smaller brokerages, isn’t explicitly Corcoran’s only growth plan, as the company looks to sell franchises both state-side and, eventually, globally.
“You’ll see us affiliating franchises in markets that we want to be in that might have 20 agents and you’ll see us bringing on much larger franchises like this one,” Liebman said. “We’re not stuck in any particular mold. We’re not saying we’re only going big or we’re only going small. We’re going where our brand is going to work the best and we can affiliate with the best partners.
The news of Corcoran’s first franchise comes weeks after Realogy decided to shutter Climb Real Estate, another company-owned brokerage that Realogy announced would franchise last year.