Compass, a fast-growing New York-based real estate firm, plans to buy Pacific Union International as it focuses on expanding in California, according to news reports. Compass plans to make a formal public announcement about the acquisition Thursday, the reports say.
Pacific Union is the nation’s fifth-largest residential real estate firm based on transaction volume; Compass is the sixth, according to real estate news site REAL Trends. Combined, the firms would become the nation’s third-largest residential real estate firm, the San Francisco Chronicle reports.
Pacific Union, which has grown to be the largest independent brokerage in California, completed $14 billion in sales last year and is on track to reach $18 billion in revenue this year. It has 1,700 agents in 54 offices. Compass, which launched in 2012, boasts more than 4,000 agents. The brokerage says it generated $370 million in revenue last year, The Real Deal reports.
Compass is setting out to capture 20 percent market share in 20 U.S. cities. So far, it has acquired nine brokerage firms around the country this year. Two months ago, Compass purchased the Paragon Real Estate Group in San Francisco, which then formed San Francisco’s largest residential brokerage firm.
Mergers within the real estate industry “have picked up considerably” over the past year, REAL Trends President Steve Murray told the Chronicle. “The economics of the industry are getting more difficult,” he says. “The lack of inventory, the decline in unit sales, is putting enormous pressure on brokerage firms and agents.”
Source:
“Compass Buying Pacific Union—its Second SF Real Estate Acquisition in Two Months,” San Francisco Chronicle (Aug. 21, 2018) and “Compass to Acquire Pacific Union in Blockbuster Deal,” The Real Deal (Aug. 21, 2018)
