In Aspen real estate, merging brokerages has become the norm
The Aspen Times
B.J. Adams recalls a time in Aspen’s real estate arena when most firms were named after their founders.
“When we started 22 years ago in 1994, all of the real estate firms were small,” said Adams, whose BJ Adams & Co. affiliated with Warren Buffett’s Berkshire Hathaway HomeServices in September. Adams runs the firm with her husband, Michael.
“In fact, I think the largest one was 25 people, and they were all named after their founders. That’s the way business was done,” she said.
But the urge to merge, affiliate or be acquired has morphed into a trend of late in a cutthroat market where single-family home sales in Aspen averaged $7.2 million in 2015, while the median price was $5.8 million, according to the Aspen Board of Realtors. Last year, Pitkin County registered more than $1.5 billion in total property sales.
Large, outside firms have been tapping the market at an increasing rate, from the New York powerhouse brokerage Douglas Elliman buying Joshua & Co. in December 2014 to last month’s acquisition of Shane Aspen Real Estate by another New York-based luxury real estate firm, Compass, which has a technology-driven platform. Elliman has four offices between Aspen, Aspen Highlands and Snowmass Village. Berkshire Hathaway has one in Aspen and Snowmass, while Compass has one in Aspen and one at Willits.
Additionally, Europe-based Engel & Volkers opened an Aspen shop in December, hiring Aspen resident Erik Berg to run the firm.
And flash back to 2012, when Morris and Fyrwald Sotheby’s International Realty joined forces with Chaffin Light Real Estate to form Aspen Snowmass Sotheby’s International Realty. That same year, Mason Morse Real Estate merged with Coldwell Banker the Aspen Brokers. Another longtime firm — Coates, Reid and Waldron — was acquired by Joshua and Co., now Douglas Elliman Real Estate/Joshua & Co.
Joshua Saslove, the name behind the 40-plus-broker Joshua & Co., said he linked arms with Douglas Elliman to stay competitive in Aspen’s ultra-high-end market. Elliman, whose website says it is the fourth largest real estate firm in the U.S., gives Saslove more marketing muscle and a greater reach, he said.
“To stay competitive, I’d say you have to have this kind of depth and knowledge and assets available to your brokers,” he said.
In its annual report for 2015, Elliman’s parent company, publicly traded Miami-based Vector Group Ltd., reported it has seven brokerage companies with 79 offices and 5,900 real estate agents “in the metropolitan New York area as well as South Florida; Beverly Hills, California; Connecticut; and Aspen. The companies achieved combined sales of approximately $22.4 billion of real estate in 2015, approximately $18.2 billion of real estate in 2014 and approximately $14.9 billion of real estate in 2013. … Douglas Elliman had revenue of $637 million in 2015, $543.2 million in 2014 and $435.6 million in 2013.”
While Douglas Elliman started in 1911, Compass was launched in 2013 by former Goldman Sachs executive Robert Reffkin and Ori Allon, once the director of engineers at Twitter’s New York offices.
Like Saslove, Shane said he saw the acquisition as giving his clients more resources in a competitive climate, along with having the ability to work with brokers within a larger network.
“When I say that we have a responsibility to our buyers and sellers, I want to make sure that we are aligned for the greatest level of success,” Shane said. “To do that as best as you can and effectively for the buyer, you want to have all of the technological tools that allow you to be ahead of your competition.”
Adams said, “We owed it to our clients to give them a bigger platform, where their properties could not just be found in our little community.”
A depth of resources, however, wasn’t the only factor for Adams to affiliate and Shane and Saslove to sell. Having similar company cultures also was a driving force.
“I wanted to have a culture of brokers similar to myself with my work ethic, who live and breathe real estate,” Shane said. “I didn’t do it as an opportunity for a big payday but more to have a group that’s willing to grind it out and do what’s necessary to sell their clients’ property. I wanted to make sure there would be a network of like-minded workers in other luxury markets so we can refer business back and forth.”
Even with the expanded services and resources, Adams said lining up with a powerhouse brokerage might not be for everybody.
“No, I don’t think that’s necessary,” she said. “This is probably the only affiliation that works for us, given the way the company is run.”
While new restaurants enter the Aspen scene, there are several spaces that will remain empty this winter. Meanwhile, the retail market remains extremely hot.