Home, Woods Bros. owner buys Prudential, Real Living brands

Berkshire Hathaway's HomeServices of America is taking a controlling stake in two competing real estate brands as part of a joint venture with their owner. The deal between HomeServices and Brookfield Asset Management rolls the Prudential and Real Living Real Estate brands owned by Brookfield into a new franchising company called Berkshire Hathaway HomeServices.  The local Prudential Ambassador real estate franchise will become part of the new company, which will have more than 53,000 agents in more than 1,700 U.S. locations.   Financial terms of the deal were not disclosed, but Berkshire's HomeServices of America unit will be the majority owner. HomeServices already owns local brokerages with 16,000 real estate agents in 21 states.  HomeServices of Nebraska, which owns Home Real Estate and Woods Bros. Realty in Lincoln, is a wholly owned subsidiary of HomeServices of America and will not be affected by the deal.  "The new HomeServices franchise will have little impact on our companies here but will expand our national footprint," HomeServices of Nebraska CEO Gene Brake said in a statement.  In a memo sent to Home and Woods Bros. agents, Brake said those companies will continue to compete against the local Prudential franchise.  HomeServices Chairman and CEO Ron Peltier said this deal gives the company a national franchise network with 75,000 to complement its local brokerages. Peltier said in an interview that he wanted to acquire a national franchise because building one would be too costly and take several years.  The Prudential and Real Living brands will be eliminated over the next couple years as franchise agreements expire. Prudential and Real Living franchisees can continue to use those names until their existing agreements expire. They also can choose to adopt the Berkshire Hathaway HomeServices name early if they choose to. It will be available for use by franchisees in 2013.  "The strategy going forward is to migrate the franchises over to one super brand: Berkshire Hathaway HomeServices," Peltier said. That will help the company build one main brand online under the Berkshire Hathaway HomeServices banner.  Peltier said the independent local brokers that HomeServices already owns won't be forced to switch affiliation to the new franchise network, but they will begin noting they are owned by Berkshire Hathaway. For example, CBS Home Real Estate in Omaha will keep its name but add that it's a Berkshire Hathaway affiliate.  Peltier said that will help ensure that both the independent brokers it owns and Berkshire Hathaway HomeServices locations will show up in Internet searches. Berkshire Hathaway CEO Warren Buffett said he's happy to lend Berkshire's name and financial strength to the new company, which will be based in Irvine, Calif., and be led by a team of executives from Prudential Real Estate." 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," Buffett said in a statement. Berkshire owns about 80 subsidiaries. Brookfield, based in Toronto, manages more than $150 billion worth of utility, infrastructure and real estate assets.

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