Last week, it was announced that Brookfield Residential Property Services, based in Toronto, Canada, would purchase GMAC Home Services LLC, which operates one of the largest real estate brokerage companies in the United States (see Inman News article). Brookfield owns the Royal LePage, La Capitale, Johnston & Daniel, and Centract real estate brands.

Like the banking sector, other industries are expected to consolidate in response to tough economic times. And experts say this is just the beginning of a major marrying of unlikely bedfellows in the real estate industry.

"In the next 12 months we will see incredible consolidation, shocking partnerships. People and companies we would never dream of joining forces will do so," wrote Sherry Chris, president and CEO, Better Homes and Gardens Real Estate, in a Sept. 30 blog post. "My phone is ringing off the hook" — she would not say who was calling.

Better Homes and Gardens Real Estate is part of the Realogy franchise group, which also owns Century 21, Coldwell Banker, Sotheby’s and ERA.

Arguably, the consolidation began in 1995 when Realogy, formerly HFS, acquired Century 21 and ERA. Then in 1996, HFS snatched up Coldwell Banker Corp. for approximately $740 million.

Leveraged buyout artist Henry Silverman created HFS and rode the housing market from 1996 to 2007, when he sold out to an affiliate of private equity firm Apollo Management LP.

Realogy was mentioned among the possible buyers of GMAC, but it has been saddled with debt in the heavily leveraged buyout deal.

The consolidation frenzy that began in the late 1990s was in response to opportunity in the real estate sector. Mergers and buyouts today are more in response to hard and even desperate times for some firms that are having trouble keeping their doors open during this worst housing market in decades.

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