Reaction to Canada-based company Brookfield Residential Property Services’ $110 million purchase of Prudential Real Estate and Relocation Services has been largely positive among agents and brokers contacted by Inman News, though worries about whether Prudential affiliates will be allowed to retain the Prudential brand linger.
Despite a press release stating that Prudential Real Estate brokerage affiliates will be able to continue to use the Prudential brand based on the terms of their franchise agreements, some agents and brokers contacted by Inman News said they wonder whether they will be able to keep the branding.
"I don’t know if my broker will keep it. In Utah County we’ve branded ourselves as Prudential so it would be a bad thing to lose that name and branding we’ve built up for so many years," said Chris Nichols, associate broker at Prudential Utah Elite Real Estate in Orem, Utah. The brokerage has about 200 agents and four offices.
"The big thing for me and the other agents that are aware of it is just the branding issue. And we’re frustrated. I know our broker is drafting a statement to make to the agents today, but I don’t think he has all the answers either with regards to the branding and any changes happening here yet," he added.
Brookfield CEO Graham Badun, in an Inman News interview today, assured that affiliates renewing "in the near term" could renew with the Prudential brand name, and that the brand is licensed "for a number of years," though he did not rule out a rebranding in the long run.
London, Ontario-based sales representative Stewart Blair said it had also not been made clear to him whether his brokerage, Prudential Family Realty, will be able retain its branding.
"My hope is that the Prudential franchises in Canada are allowed to remain as Prudential franchises. I have no idea. I’ve been told nothing will be changing for the immediate future, but all we have is the news release," Blair said. He added that he had personally been told of the change through a phone call from his broker Tuesday night.
Dottie Herman, CEO for Prudential Douglas Elliman — which ranked No. 4 among U.S. brokerage companies based on closed sales volume in 2010, according to real estate research firm Real Trends — said she first heard reports about two to three months ago about the possibility that Prudential was considering a sale to Brookfield.
She said she also had heard reports that Warren Buffet’s HomeServices of America was a suitor.
"I don’t think it was a surprise to us, at least in New York," Herman said. "So we weren’t really shocked," she said. Douglas Elliman celebrates its 100th year in business this year, she said, adding that the company’s core brand remains strong, regardless of whether the "Prudential" name sticks or is replaced.
Herman said it’s too early to know whether the company will renew with Prudential once its franchise agreement is up for renewal. "I don’t think anybody knows what they’re going to do. It depends on what the name is," she said. "The (franchisees) who want to keep (the Prudential brand) will keep it" for as long as they can.
"I don’t think anyone’s panicked by (the sale). I really think, at the end of the day, it’s anticlimactic since no one has to get rid of the name," at least for awhile, she said.
Herman noted that Douglas Elliman has been a Prudential affiliate since Merrill Lynch sold its real estate operations to Prudential Insurance Co. of America in 1989 in a deal that was worth $300 million.
She credited Prudential for allowing her to acquire Douglas Elliman. "They lent me some money to buy the company. I have no complaints about them. I was able to grow with them tremendously."
Brookfield’s residential real estate franchises in Canada operate under the Royal LePage, Via Capitale, Johnson and Daniel, and now, Prudential Real Estate, brand names.
Of the 200 largest real estate brokerages in Canada by closed transaction sides in 2010, Re/Max brokerages held 137 of the 200 spots, according to a report by Real Trends, while 21 are under the Royal LePage brand. Only three of the brokerages on the list operate under the Prudential brand name.
Elizabeth St. Cyr, a real estate broker at Prudential Town Centre Realty in Oakville, Ontario, said she doesn’t think the Prudential brand will survive in Canada for the long haul.
"It’s not a huge brand here anyway. I think it’ll be a few more years before it transitions, but I don’t think it will stay," she said.
But she’s not worried, she added.
"We’re hoping that Brookfield will be more invested in the Canadian side of the business," St. Cyr said.
Badun told Inman News "it’s business as usual with the (Prudential) brand and the franchise agreements" in both the U.S. and Canada.
"We’ve licensed the Prudential name for the terms of the franchise agreements that exist today. Anybody that’s renewing in the near term has the opportunity to renew with the Prudential name. (In the long term) we can talk about what a rebranding might look like, but that’s a long time off. We have the brand licensed for a number of years, so we don’t see any changes in the immediate future at all," he said.
Brookfield Residential Property Services entered the U.S. market by acquiring GMAC Real Estate in 2008, which it merged with Real Living when it acquired that franchise network in November 2009.
Badun said that there were no plans to close or consolidate any Prudential or Real Living offices operating in the same market area.
"They’re all independently operated and run and there are no plans to operate them together. There’s lots of room (for both)," Badun said.
"One of the things that appealed to us is (Prudential’s) broad representation across the United States. We were interested in expanding (further) across the United States and this was our opportunity to do so," he added.
Badun cited Prudential’s "upscale positioning" similar to that of its Royal LePage brand as part of the reasoning behind the company’s acquisition.
"We just saw Prudential as a very attractive opportunity as a company that attracts high-quality agents and high-quality brokers and that’s consistent with the sort of business we want to run in the long term," Badun said.
"(Prudential also has) a strong relocation business that is complementary to (Brookfield’s) relocation business," he added.
With the acquisition of Prudential’s relocation network, Brookfield said it is now the world’s second-largest employee relocation services provider — a benefit not lost on Prudential agents and brokers.
"I think based on who Brookfield are, I (expect) enhancements to our referral network and relocation opportunities. We do a lot of relocation from Prudential Relocation (Services) right now so we’re excited about the opportunity to do more," said Candace Adams, president of Prudential Connecticut Realty, which has about 1,550 agents in 52 offices.
"Brookfield — it’s main focus is real estate and relocation and their knowledge and leading-edge tools will be a benefit to our agents," she added, though she said she’s not aware of which tools will be available to Prudential affiliates at this point.
Badun said Prudential agents and brokers should not expect to see any visible changes as a result of the acquisition.
"The biggest change is that Prudential is owned by a company that has a long history with the relocation and brokerage business and seeks to grow the company in recessionary real estate times," he said.
"We’re used to running a multibrand company. Prudential is a high-quality network. We look forward to reaching out to the affiliate base and understanding what their needs are going forward," he added.
Inman News editor Glenn Roberts Jr. contributed to this report.
