Investors Buy Grubb & Ellis Residential Unit : Housing: New O.C. owners will focus on luxury market. No layoffs are planned.
Seeking to ride a rebound in upscale housing sales, an investor group headed by two Orange County businessmen said Friday that it has acquired the business of Grubb & Ellis/Better Homes and Gardens in Orange and San Diego counties.
“We have seen a real upturn in the luxury home market in the last 12 months and that prompted our move to purchase the company,” said Dennis Gordon, former senior vice president and director of operations for Coldwell Banker in Southern California.
Gordon said that he and Charles Neubauer, former manager of Coldwell Banker’s Newport Beach office, are both investors in the purchasing group, called Newco Realty Corp. They will manage the Newport Beach-based company, he said, with Gordon serving as president and Neubauer as executive vice president.
Neither Gordon nor Joe Hanauer, chief executive officer of San Francisco-based Grubb & Ellis, would disclose the purchase price of the transaction, which became effective Friday. The purchase included nine residential sales offices, six in Orange County and three in San Diego County, with 325 sales associates and 95 employees.
The Orange County offices are located in Newport Beach, Laguna Beach, Dana Point, Irvine, Mission Viejo and Laguna Niguel.
Hanauer estimated that Grubb & Ellis’s Southern California residential operation last year sold about 3,000 homes with a combined value of $900 million. Hanauer said the residential offices will continue to operate under the name Grubb & Ellis as an independent licensee of Grubb & Ellis.
A major attraction of the investment group’s offer, Hanauer said, was a promise that the offices would continue to operate as a network and not be split off and sold to other brokerages.
“We are keeping all of the managers and support staff and all of the associates,” Gordon said.
Gordon said that Grubb & Ellis residential sales in Southern California are strongest in the market for homes valued at $500,000 or more, which this year have made a faster comeback than less pricey real estate after a deep, three-year recession.
“We are going to continue to focus on the upper end market,” Gordon said. “Our plan is to grow the company throughout Orange and San Diego counties through acquisition, merger and franchising,” he said.
Gordon said the new owners also will retain a franchise membership with Better Homes and Gardens which, among other things, has enhanced the relocation business at Grubb & Ellis offices in Southern California by linking them nationally with other brokerages.
The Southern California sale, Hanauer said, completes a two-year campaign by San Francisco-based Grubb & Ellis to divest all of its residential services in order to concentrate on its mainstay commercial and industrial business.
