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Amid an ever-intense battle for top real estate talent, Compass announced Thursday that it is expanding into Arizona after scooping up a top-performing indie brokerage.
The brokerage, Launch Real Estate, is based in the Phoenix suburb of Scottsdale. It’s the No. 1 producing independent brokerage in Scottsdale with “just over 300 agents,” according to a statement from the companies.
Rory Golod
Rory Golod, Compass’ president of growth and communications, described the situation as an “acquisition” in the statement, but noted that the deal is funded on “a deferred basis with no upfront capital.” The deal means Compass is “adding a top regional brokerage under a structure that aligns our interests long-term,” Golod also said in the statement.
The companies did not disclose additional financial details about the deal.
Launch will continue to operate under its own banner but will eventually rebrand to include the Compass name. The brokerage’s leadership and support staff are remaining in place following the deal.
Sean Zimmerman
John Vatistas and Sean Zimmerman founded Launch in 2016. In the statement, Zimmerman — the brokerage’s president — said “we’re keeping our traditions and people while benefiting from Compass’ national network of agents, many of them in markets with natural synergies with Greater Phoenix.”
Launch’s CEO Vatistas also commented in the statement saying “we have a proud culture of collaboration, and joining Compass allows us to build on that foundation throughout Arizona and nationally.”
The acquisition comes at a pivotal time for Compass. Amid a weakening housing market that dinged most major companies, Compass revealed last year that it was looking to cut costs by, among other items, ending lucrative recruiting incentives for agents. The move, while generally lauded by analysts, prompted questions within the real estate industry about whether the company could sustain its steady growth without spending big for talent.
Subsequent earnings reports show that Compass has still managed to add agents after cutting incentives — though that growth has not been especially rapid in recent months. Case in point: Compass had an average of 13,314 agents during the third quarter of 2022 and an average of 13,426 during the fourth quarter.
In that context, picking up a 300-agent brokerage is a major get for the company — though it remains to be seen how many new agents Compass will net this quarter, which of course is a figure determined by both recruiting and departures.
All of this also takes place against a backdrop of a broader battle for agent count that has seen all the major real estate companies compete intensely for the highest producers.
Robert Reffkin
Though observers will have to wait until Compass’ next earnings report to see how overall recruiting has fared lately, the company struck an upbeat tone in its statement on Launch. Robert Reffkin, Compass’ founder and CEO, ultimately concluded that he is “excited to welcome Launch to the Compass family as we continue to grow the Compass footprint in the United States.”
“Launch is a premier luxury brokerage and a great fit for our brand and culture,” Reffkin added in the statement. “We are adding an excellent agent-centric agency in a top U.S. market, creating significant synergies within our vast agent network.”
Correction: Launch is the top independent brokerage in Scottsdale and was founded in 2016. This post originally cited a statement that misreported those facts. The post was updated after Compass provided new information.
