HomeServices and Brookfield Announce a New Residential Real Estate Franchise Brand—Berkshire Hathaway HomeServices®
“The combined networks of more than 53,000 Prudential Real Estate and Real Living Real Estate agents generated in excess of $72 billion in residential real estate sales volume in 2011, and operate across more than 1,700 U.S. locations.
“Berkshire Hathaway HomeServices is a new franchise brand built upon the financial strength and leadership of Brookfield and HomeServices,” said Warren Buffett, chairman and CEO of Berkshire Hathaway Inc. “I am confident that these partners will deliver value to the residential real estate industry, and I am pleased to have Berkshire Hathaway be a part of the new brand.”
“We are honored and proud to be entrusted with the use of the Berkshire Hathaway name as our new real estate franchise brand,” said Ron Peltier, chairman and CEO of HomeServices. “We will convey the strength of Berkshire Hathaway’s reputation and its associated principles of integrity and financial stability in everything we do.”
The message is loud and clear. Warren Buffett has decided its time to bet on real estate again. And bet BIG.
This is great news for all of us in the real estate industry. But lets peel away the layers of the onion.
If you look up wwww.BershireHathawayHS.com (BHHS) on WhoiS you find out that the URL was purchased by HomeServices back in June of 2012. So either Home Services was already making plans to rebrand itself back then or this deal has been in the works for a long time.
This move solves Brookfield’s brand problem with Prudential. Since the Prudential name was going away they needed to come up with a brand the Pru brokers would not stick their noses up to. How are you going to compete with a “piece of the rock”? I think the Berkshire Hathaway brand will be something that will be very enticing to Pru brokers. I mean, what agent, at a listing presentation wouldn’t want to say that their company is owned by Warren Buffett?
Which brings me to another point. This could be a big risk for Berkshire Hathaway. They are leveraging the Berkshire Hathaway name for the first time. And who are the stewards to this exclusive brand? Real Estate Agents, which are just a couple steps above used car salesmen on the public respect scale.
Ron Peltier as Chairman makes sense. Earl Lee as CEO is interesting. Buffett is famous for being a great business operator and cultivating managerial talent. Broker-owners love Earl, but will he cut the mustard?
The other two execs, recently pictured with Earl on the August cover of RIS Media’s REAL ESTATE Magazine, are also interesting choices.
Aleya Chattopadhay rose from the ranks of Brookfield to become the CMO. She has a lot of experience internationally and in conversations I’ve had with her I can attest to her smarts and passion about the industry.
Steve Phillips came from GMAC Relo division before he joined Brookfield. I wonder since this is technically a JV between BHHS and Brookfield if they are still employees of Brookfield or have they left Toronto for good?
Time will tell.
The rate this industry is changing is dizzying. Think about it.
Here comes the Canadians!
Brookfield acquires GMAC Real Estate
Brookfield acquires Real Living, then merges GMAC Real Estate brand into Real Living.
Here come the “Interlopers”!
Zillow goes public
Trulia goes public
The Old Guard makes a stand!
Realogy goes public
There go the Canadians!
HomeServices acquires majority stake in Real Living and Prudential RE from Brookfield.
My head hurts!
A few takeaways:
HomeServices of America has always had a stable of multi-branded real estate companies. Think Long Real Estate, Edina, Prudential X,Y, Z etc. While I can’t see a company like Edina changing brand names I do see the Prudential brands under HSofA moving toward the BHHS brand. This will give them a web presence they haven’t had before. If I was Zillow and Trulia I would be watching these developments very carefully.
A wise man once told me that Joint Ventures never work. In this case HomeServices owns the majority share, so that will help, and Brookfield gets the cachet of being partners with Warren Buffett.
You gotta feel for the staff at what was GMAC, Real Living and Prudential Real Estate. They been through 3 years of nothing but change, and now this!
The Harley Rouda story that leaked yesterday I reported on. Was it an honest mistake, a crossing of wires due to the Hurricane? Or was Harley tweaking Brookfield’s nose?
No matter. Right now I’m optimistic on real estate’s future.
So Nouriel Roubini can go suck on it. The Housing Recovery is official, Warren Buffett said so!