Bigger. Better. Bolder. Inman Connect is heading to San Diego. Join thousands of real estate pros, connect with the Inman Community and gain insights from hundreds of leading minds shaping the industry. If you’re ready to grow your business and invest in yourself, this is where you need to be. Go BIG in San Diego!
Compass finalized its acquisition of @properties Christie’s International Real Estate in January — and on Friday it allowed a glimpse inside its balance sheet for the first time since being absorbed by the publicly traded company.
In an audit by PricewaterhouseCoopers, Chicago’s biggest brokerage revealed $8.2 million in profits for 2023, the last full year before Compass acquired it, and a sharp increase to $20.7 million in profits during the first nine months of 2024.
TAKE THE INMAN INTEL INDEX SURVEY FOR MARCH
From transactions details to previously undisclosed commission settlement figures, read further for the data points behind @properties’ public audit.
Thad Wong | @properties Christie’s International Real Estate
$357.4M in assets
The audit found that @properties had $50.5 million in liquid assets, with $27.9 million cash on hand and another $22.6 million in accounts receivable and other incoming revenue, as of October 2024.
In total, @properties had $357.4 million in total assets, much of it intangible, as of October 2024.
The brokerage also boasted $164.4 million in so-called goodwill, or the value of the brand itself.
It also revealed another $79.4 million in intangible assets, which include things like copyrights, patents and trademarks.
Former liabilities
The company reported $201.7 million in total liabilities, with $46.1 million in current liabilities plus $155.6 million in long-term liabilities, such as long-term debt.
The audit said all debt was paid before the merger with Compass closed in January.
$505M per year in commissions
Thad Wong, left, and Mike Golden, right. Co-CEOs of @properties
For all of 2023, @properties brokers pulled in $505.2 million in commission income, according to the audit. Another $21.8 million came from title agency revenues, and $42.8 million in unspecified revenue for a total of $569.8 million.
The brokerage paid its agents $425.5 million, or just over 82 percent of the total commission revenue that year. It paid $62.5 million in wages and benefits.
$11.2 million went to advertising and marketing expenses, and another $13.5 million on rent.
@properties reported spending $7.3 million on recruiting and retention. (For context, Fathom Realty reported spending $2.7 million on recruiting the same year.)
In total, the brokerage reported $548.5 million in operating expenses, and a net profit of $8.2 million after taxes in 2023.
At the end of 2023, @properties had a total retained earnings of $40.9 million.
$1.55B in combined assets
After adjusting for the cash Compass agreed to pay for the merger, the combined companies had $110.5 million estimated cash on hand as of October 2024, according to the audit.
Combined, the two companies would have posted a net loss of $110.9 million for the first nine months of 2024, led by Compass’ net loss of $114.1 million for that timeframe as it continued on its expansion path.
Between Compass’ $1.2 billion in assets and @properties’ $357.4 million in assets, the combined companies have $1.55 billion in total assets as of October.
They had combined liabilities of $878.7 million, although it’s not clear if that accounts for @properties’ payment of debt as part of the deal.
The companies earned a combined $4.6 billion in total revenue after accounting for various divestitures.
Compass CEO Robert Reffkin at Inman Disconnect 2019. Credit: Inman
Other insights
The audit included other details that shed some light on past deals made by @properties, including the purchase prices and revenue generated from marquee investments.
At the beginning of last year, @properties had $149.2 million in loans that are due later this month.
Part of those loans came from the purchase of Christie’s International Real Estate in November 2021. According to the audit, @properties drew $45 million from its delayed draw term loan to finance the transaction.
@properties agreed to pay Christie, Manson & Woods Limited $2 million per year through November 2026 for licensing the brand name Christie’s. It agreed to pay $3 million per year for five years after that date.
In March 2022, when @properties announced it was forming a partnership with Christie’s International Real Estate Sereno, the price of the acquisition wasn’t released. According to the audit, @properties paid $20.8 million for the business.
The companies set additional bonuses for commission targets, which would have paid out up to $8 million. Those targets weren’t hit, so no bonuses were paid out as part of the merger.
In 2019, @properties acquired Ansley Atlanta Real Estate. The acquisition gave it a 37.5 percent stake in Capstone Title Services. That equity holding earned @properties $800,000 in 2023, according to the audit.
The brokerage also owns 49.9 percent of Proper Rate, a mortgage provider. The equity ownership generated $300,000 for @properties in 2023.
When it agreed to settle the Sitzer | Burnett lawsuit in April 2024, @properties didn’t publicly state how much it agreed to pay the class members. According to the audit, @properties agreed to pay $6.5 million, which it submitted in May 2024.
