Brookfield Residential Property Services — the Canadian-based franchisor that provides services in the U.S. under the Real Living brand — has acquired Prudential Real Estate and Relocation Services for $110 million, the companies said.
The deal allows Prudential real estate brokerage affiliates to continue to use the Prudential brand based on the terms of their franchise agreements.
Earl Lee, president of Prudential Real Estate and Relocation Services, will continue to oversee the provision of franchise services to brokerages in the Prudential network, while Rick Schwartz, president of Brookfield Global Relocation Services, will assume responsibility for the combined relocation services business.
A Prudential finance subsidiary with investments in "a limited number" of real estate brokerage franchises was excluded from the transaction, Prudential said in a regulatory filing.
Brookfield Residential Property Services entered the U.S. market by acquiring GMAC Real Estate in 2008, which it merged with Real Living the following year.
Most brokerages operating as GMAC Real Estate affiliates made the switch to Real Living, although Atlanta-based Metro Brokers Inc. split from GMAC just weeks before the merger was announced and later affiliated with Better Homes and Gardens Real Estate.
Brookfield said it now has residential real estate franchisees in all 50 U.S. states, 10 Canadian provinces, Mexico and Portugal. With the deal, Brookfield’s network has grown to approximately 80,000 real estate agents in 2,800 real estate brokerage locations that handle more than $150 billion in residential real estate transactions a year.
Last year, Prudential lost one of its biggest brokers, Pleasanton, Calif.-based Mason-McDuffie Real Estate Inc., which re-affiliated with Better Homes and Gardens Real Estate. At the time, Prudential’s real estate franchise network consisted of about 60,000 sales associates and 1,700 offices in North America.
In its most recent quarterly report to investors, Prudential said its real estate and relocation services division generated $4 million in adjusted operating income during the first nine months of the year, down from $22 million during the same period in 2010.
The company attributed the decrease to lower transaction volume and average home-sale prices, as well as lower relocation services revenue as the result of a decline in volume for home-sale and referral fee transactions.