Compass, a real estate company based in New York created in 2012, is working on closing a buyout deal with Pacific Union International Realty. This brokerage is one of the largest on the West Coast with sales reaching $14 billion last year.
The deal was confirmed in an email sent by Compass CEO Robert Reffkin to his employees. Pacific Union CEO Mark McLaughlin told his managers about the deal earlier in the month according to sources. The plan was to announce the deal publicly in August reported Inman.
Pacific Union is the fifth-largest real estate brokerage in the nation. According to Real Trends, a consulting firm based out of Colorado, Pacific Union has 1,700 agents and 54 offices. The San Francisco-based firm is set to hit $18 billion in revenue this year and that is thanks to a recent influx of business acquisitions, stated CEO Mark McLaughlin. Thanks to McLaughlin, the company grew to be one the largest independent brokerage in California. In December 2016, Pacific Union took over the John Aaroe Group which gave them 1,100 more agents and 38 offices.
Eight months after that acquisition, the company merged with Partners Trust a boutique firm with seven offices. Then the large company grew even more by absorbing Gibson International (a Los Angeles firm with four offices), the Mark Company (a San Francisco development sales firm) and Empire Realty Associates (a Chino-based brokerage).
Compass on the other hand now has 4,000 agents and generated $370 million last year. The company has been on a path of acquisitions after getting $450 million from SoftBank in December. This deal bumped up Compass’ value to $2.2 billion. In an attempt to corner 20 percent market share in 20 cities across the country, Compass acquired nine other firms around the U.S. this year including another San Francisco company, Paragon – valued at $2.3 billion.
Compass’ merge with Pacific Union has brought up questions as to what McLaughlin will do after the deal has been closed. McLaughlin publicly criticized Compass, suggesting that the company overstated its market share in the San Francisco area. Earlier in the month, he rejected the merge with Paragon because the deal happened when Compass began its journey into commercial brokerage.
“I got a kick out of Compass’ announcement because they say they’re getting into commercial, but most of the Paragon team joined us about 90 days ago,” he told Inman.
Both Compass and Pacific Union have not responded to requests for comment.
For more information about Compass or real estate in Seattle and Bellevue, contact Mary Pong today 425-829-3417