Coldwell Banker Southland Unit Acquires Coast Newport Properties
In a deal that could create the largest residential real estate brokerage in Orange County, Coldwell Banker Southern California has acquired Coast Newport Properties for an undisclosed sum.
Coast Newport, based in Newport Beach, specializes in high-end homes along the county’s coast.
The deal is part of a consolidation trend that has swept the industry over the last three years. Coldwell Banker itself is owned by NRT Inc., the New Jersey company that also controls Century 21 and ERA real estate brokerages.
As the housing industry enjoys some of its best years, many brokerages are more profitable than ever--and more attractive to suitors, analysts said.
Coast Newport and similar mid-sized companies are more receptive to offers as they face larger rivals with more resources to set up Web sites and other services for reaching a larger number of buyers.
“They’re stuck in the middle,” said Steve Murray, co-editor of Real Trends, a Denver-based newsletter and an industry consultant.
Though Coast Newport gained local customers, it could not afford an Internet presence that could draw buyers from around the globe on properties in Orange County. Increasingly, a larger share of buyers are coming from outside Orange County, said Coast Newport President Danny Bibb, who founded the firm in 1990.
Moreover, a growing number of Orange County homeowners are looking for second or vacation homes elsewhere, and without some sort of computer technology, the Newport Beach-based company was hard-pressed to win their business.
“You can’t compete on the technology side,” said Bibb, adding that the acquisition will not result in major changes for his company, which has 175 agents.
Coldwell Banker and Coast Newport sold the most homes combined during the 12 months ended Sept. 30, topping First Team Real Estate and Prudential California-Pickford, according to Pat Veling, an analyst at Dynamic Marketing Resources Inc. of Fullerton.
The combined firms will enjoy a dominant share of the Newport Beach and Corona del Mar markets, which contain some of Orange County’s priciest real estate. Coast Newport accounted for 22% of homes sold in the Newport Beach area, and Coldwell Banker handled 19%, Veling said.
As First Team and Prudential have taken steps to raise their share of luxury homes sold, Veling said, Coldwell Banker felt it needed make a move to secure its position in that highly profitable niche in Orange County.
Coast Newport, which has a reputation for marketing some of the most expensive homes in Orange County, was one of the “last high-end companies left in California that hasn’t merged with someone else,” said Bob LeFever, president and chief operating officer of Mission Viejo-based Coldwell Banker.
The move, LeFever added, strengthens Coldwell Banker’s position in the luxury home market statewide. He estimated that Coldwell already accounts for 75% of the transactions involving homes costing $1 million or more.
One competitor noted, however, that the combined company could lose some agents who were accustomed to a smaller company.
“This business is built around agents,” said Bill Plattos, general manager of First Team Real Estate Inc., who said the company has absorbed a significant number of agents unhappy with previous mergers. “You must cater to their needs.”
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Top 10 Real Estate Brokerages in O.C.
(during 12 months ended Sept. 30)
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Homes Sales Volume Avg. Sale Name Sold (in millions) Price 1. Coldwell Banker Residential 3,643 $1,595 $437,847 * 2. First Team Real Estate 3,642 1,089 299,144 3. Prudential 3,431 1,143 333,071 California-Pickford 4. Re/Max Real Estate Services 2,103 690 328,291 5. Tarbell Realtors 1,671 413 247,435 6. Re/Max Premier Realty 1,157 318 274,920 7. Century 21 Beachside 1,081 262 242,750 8. Star Real Estate 1,066 272 255,181 9. Regency Real Estate 906 263 289,800 10. Century 21 Superstars 786 186 236,775
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* Includes Coast Newport Properties
Source: Dynamic Marketing Resources Inc. of Fullerton
Los Angeles Times
