Uncertainty in Residential Real Estate

Realogy shareholders approve $9 Billion dollar buyout by Apolo Management.  For those of you not familiar with who Realogy is, it is a company that spinned off of Cendant just last August and is the leading franchisor of real estate companies that include the Franchises of CENTURY 21, Coldwell Banker, Coldwell Banker Commercial, ERA and Sotheby's International.  (Yes, technically all of these franchises are headquartered in Parsippany, New Jersey under one building.) 

My wife and I had the opportunity to visit this impressive office building in April of 2005 and it is quite an impressive operation.  (I wish I would have taken a picture of it so I could post it here but you can Google Map it and get a pretty good idea of just how big this office complex is in an area of prime real estate.) 

I think what stands out the most in the purchase of Realogy is this statement from the Chairman and CEO of Realogy, Henry R. Silverman: 

"After careful consideration, our board of directors has concluded that this transaction is in the best interests of Realogy and our stockholders," Chairman and Chief Executive Officer Henry R. Silverman said. "It will enable stockholders to realize the value of Realogy's fundamentally strong businesses. At the same time, the valuation takes into account the substantial pressures and uncertainties facing the residential real estate markets that may well continue for some time. Realogy will benefit from ownership by an investor committed to building further on the solid foundation provided by the Company's leading market positions and to developing long-term opportunities for growth."

My reading of this is that even the largest real estate franchise company in the world sees what we do.  Changes in technology are enabling the most experienced and knowledgable real estate agents to start their own companies for there is no longer a reliance on traditional companies that earn their money through franchise fees, higher office fees, or a combination of both. 

• Realogy sells for $9,000,000,000
• Franchise Reality

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