Prudential Preferred acquires Rubloff Residential
(Crain's) — Prudential Preferred Properties acquired Rubloff Residential on Tuesday, combining two big and well-known residential brokerages in the Chicago area.
The acquisition is the latest example of a consolidation trend sweeping through the brokerage business, as firms struggling with slow sales combine to cut costs and ride out the most difficult residential market since the early 1980s. Last week, a unit of billionaire Warren Buffett's Berkshire Hathaway Inc. acquired Koenig & Strey GMAC Real Estate, and in February, Sudler Sotheby's International Realty bought Century 21 Sussex & Reilly.
Under Tuesday's deal, the combined brokerage, named Prudential Rubloff Properties, has about 900 sales and staff members and 17 offices. It is owned and headed by CEO Chris Eigel and President and Chairman Michael Pierson, who held the same titles at Prudential Preferred.
Howard Weinstein and Tom Horwich, who owned Rubloff, will remain on the senior leadership team at the firm. Rubloff President James Kinney also will stay on as an executive.
The two firms say they had combined transaction dollar volume of more than $2 billion last year.
Terms of the transaction were not disclosed. While little change is anticipated in staffing, Mr. Eigel says three or four offices, including a couple satellite offices, almost certainly will close.
Residential brokerages today need to be large if not niche players, and the deal helps give both scale to compete, says Steve Murray, editor of Real Trends, a residential real estate research and consulting firm in Castle Rock, Colo.
"It's a good deal for both companies. That's a good fit," says Mr. Murray, who has represented both men in previous deals but was not involved in this transaction.
Prudential Rubloff would be the fifth-largest brokerage in the Chicago area based on dollar volume of transactions, he estimates.
The brokerage will cover the North Shore, which has been a Prudential Preferred strength, and the city, where Rubloff has been a major presence. It also has an office in Harbor Country in Southwest Michigan.
The opportunity to acquire Rubloff might not have been available in a strong real estate market, Mr. Eigel says. "If anything, the down market was a positive in our thinking, not a negative," he says.
Rubloff has often been approached by prospective buyers, says Mr. Weinstein, who bought Rubloff's residential business with Mr. Horwich in 1996. Rubloff decided on the Prudential deal because it would speed up the firm's growth and perpetuate Rubloff's name in the market, he says.
Prudential Rubloff is an affiliate of Prudential Real Estate & Relocation Services, an operating unit of New Jersey-based Prudential Financial Inc.
