One of the San Fransisco Bay area’s major luxury real estate brokerages has been sold to a smaller rival for an undisclosed sum, although we suspect the sum was rather less than might have been expected a few years ago. The ongoing financial crisis continues to put pressure on the amount of brokerages on the ground and this is one of many recent consolidations.
Morgan Lane Marin will take over Pacific Union GMAC Real Estate some when in August, forming a new company with 17 offices and over 400 brokers, although we understand the two brokerages will continue to trade under their existing names and brands and aim themselves at the San Fransisco luxury real estate market. In September last year, the real estate arm of GMAC Financial Services, to which Pacific Union belonged, was sold to Brookfield Asset Management, Inc., a Toronto-based asset manager and this will reduce their exposure to a still-struggling market.
It is an interesting approach in this market, and presumably the price paid reflects the fact that California has already lost around 36,000 realtors since 2006. According to the California Association of Realtors, membership is down to 163,610 from a peak of 199,168 in 2006.Back in 2000, Pacific Union was claiming sales of more than $3 billion and the combined projected yearly sales volumes for the new entity are just $2.2 billion.
