How an underdog brokerage rose to $1B in a market of Goliaths

Imagine you are in charge of sales for a new condominium building, which has people so excited that brokerage-owners, buyers and agents camp outside your real estate office to reserve their time to see specific units.

This happened over the first weekend of June 2016 in Seattle for the new high-rise Nexus building. It was one of the first opportunities Seattle buyers had to purchase a new condominium (rather than rent) since the Great Recession, and buyers and their advisers were prepared to do anything to get in there first.

It’s not surprising that Realogics Sotheby’s International Realty (RSIR) was chosen to market the Nexus building — the building’s developer was Canadian, as is the co-founder of RSIR, Dean Jones, who was also involved in the design process.

Seattle’s growth story is well-documented — more companies, such as Google, Microsoft, Amazon and Tableau, are building bigger bases there, while others are still arriving with the draw of no state income taxes. The city is still more affordable than the San Francisco Bay Area, with very good schools, and interest is coming from all over the world.

Chinese international real estate portal Juwai has just calculated that Chinese investors’ inquiries for Seattle in November went up 140 percent over the previous year. Juwai’s North America president, Matthew Moore, attributed this to the punitive taxes on foreign buyers in Vancouver, moving them south.

What attracted Sotheby’s to a new affiliate?

When new development dried up, Dean Jones and his wife, Stacy, decided to go into residential resale in 2009 — signing up with Sotheby’s International Realty in early 2010 as Sotheby’s second affiliate in Washington.

Realogics was not a typical affiliate partner for Sotheby’s. Neither Dean nor Stacy are brokers.

Dean explains: “Sotheby’s [International] Realty was a very established brand, which was realizing it needed to adopt a different kind of franchisee model to grow. They liked that we were approaching the industry differently and that we were not just another Jones & Jones operation. They could see we had a model that could build a brokerage and liked our condo campaigns and our microbranding.”

The Joneses, with their business acumen, were willing to be the David to the local market’s Goliaths, Windermere Real Estate and John L. Scott, added Dean.

“These were huge companies with amazing headwinds,” said Dean. “In the early years, there is no doubt we felt that — but we kept trotting forward and differentiating along the way.

“And how good does it feel now to be a $1 billion-plus producer with a scalable and profitable model alongside our broker partners?”

There is nothing like feeling different to make you try harder, he added. “So much of what has led us to be innovative was a requirement to stand out in the market.”

The Joneses now have five offices in Seattle, Bainbridge Island and Kirkland, among others, with 180 brokers (as agents are called in Washington state).

The company said it does 73 percent of all Sotheby’s International business in the Northwest, specializing in luxury high-end resale.

RSIR was ranked among the top 100 “Fastest-Growing Private Companies” in Washington State, according to the Puget Sound Business Journal 2016 Book of Lists. RSIR ranked 46th on revenues of $20.66 million in 2015, an increase of 125.62 percent compared with 2013.

Of the top 10 largest real estate brands in Washington, for the year to November 2016, RSIR is No. 9 largest by dollar volume ($1.048 billion), No. 1 by average listing sold ($919,000) and No. 1 most productive per listing broker, according to Trendgraphix.

A brokerage offering its agents microbranding

RSIR has built a reputation for its outside-the-box marketing  ideas and for having a global view — it set up an Asian Services Group to help its brokers, for instance.

In its recruiting, the brokerage has gone for high-producing agents who want a change — a more innovative and forward-thinking view.

“If you talk to enough top brokers, they will tell you what to do for them,” said Dean.

He explains the company’s approach to “microbranding” for agents.

“With the microbranding, we help a broker step out and be counted with better marketing tools, so they are not secret agents,” he said. “We truly position them as global real estate advisers, not transaction-based ones. Our model is much more about wealth management, representing families and an entire portfolio across entire generations.”

This approach has attracted a number of high performing agents from the big players in the market, including senior brokers Becky Gray and Chris Doucet.

As Jones puts it: “We are not going to have a ‘mothership’ of thousands of brokers; we are not going to be a commodity.”

RSIR’s use of Evoker films

One of the ways RSIR helps agents with their microbranding is through its high-quality Evoker agent films, which were first used by Jameson Sotheby’s International Realty in Chicago.

Eddie Chang, a broker and a global real estate adviser, did his Evoker film at home with his wife and toddler.

“The idea of these mini-films is they help separate us from the masses by showing who we really are and what is important to us,” said Chang.

He was going to do something on his interest in chess, but his toddler daughter was so cute, they decided to do the bulk of the mini-film with his family. He is cooking while his daughter plays.

“The feedback from sellers has been that these are people who care about how they represent themselves — they are not just going to plug your home into an MLS; they will have a customized strategy and marketing plan that will fit the highlights of your home. There will not be a canned response,” said Chang.

Dean, meanwhile, spends a lot of time creating content to make his agents look smart, and it is a draw for incoming sales affiliates.

“We think we also have to be publishers, producers and publicists — we believe that it’s our job as the editor of our brokers to push out content,” he said. “We are behind the scenes creating content — they push it out through newsletters; it looks like they are burning the midnight oil, but they don’t have to anymore.”

The company is incorporating a sound room and anchor desk in its new Seattle annex to start producing regular video productions and interviews about design, market trends and beyond.

RSIR also has a number of partnerships with media companies, such as Geekwire and the Puget Sound Business Journal, and with luxury providers such as Ferrari, Ferretti / Riva Yachts and Seattle Magazine –which produces a luxury all-Mandarin glossy magazine for the brokerage.

When in doubt, create your own market

One of the company’s earliest hires, Chris Doucet, who joined from Windermere, appreciates the creative heads in the company.

She recently had a luxury listing built by a known architect, but the property was not selling.

“I went to Dean and said, ‘What can we do?’ And we collaborated.” Dean noted that there were other architecturally significant homes in the area.

Because it was near Halloween, instead of having a hunt for candy, the brokers decided “we would have a treasure hunt of architecturally significant properties,” Doucet explained.

A group of brokers designed a tour flyer, which got lots of press.

The tour attracted people who were interested in design and architecture but not necessarily actively house-hunting.

Nonetheless, “we had two competitive offers within a couple of days,” said Doucet.

The broker also got creative recently with some help from the brokerage’s research director. She made a visit to a Sotheby’s Vancouver affiliate to show them some Seattle listings that might appeal to Canadian buyers put off by the new taxes on non-resident homebuyers in Vancouver. Doucet used data comparing other West Coast markets in the niche she was targeting.

She showed the company’s video on the Nexus condo building. “The Nexus film showed people who think our market is saturated that it’s not.”

Her message was: “Look what’s happening — we are poised to be big like Vancouver.”

Office design sends a message

Another key way the brokerage is marketing itself to clients and brokers in the community is through its new offices. They are typically located in retail outlets rather than business parks.

Some offices now include a “jewel box” retail center, with an adjacent annex or office in nearby buildings or above the retail.

“By going into key retail locations, we can much easier become a part of the community and create ongoing conversations with potential clients who are transacting real estate business sometimes all over the world,” said VP of brand development, Jennifer Johnsen Cameron.

The Kirkland office, for instance, has been designed to cater for up to 500; the office sits at the end of a nice restaurant area in the town and is adjacent to a wine business. It is a very “lounge-y” ambience, and its functions are flexible — doors open up to create chambers or open up completely for large groups, thanks to sliding glass wall systems.

“We can turn it into a stage for third parties — we offer it to charities, to the local chamber of commerce. Being attached to a wine bar adds to the ambience. Garage doors open up to the street — we have been called the Times Square of Kirkland,” said Jones.

Offices used by top agents for brand building

The generous Kirkland venue has enabled senior broker, Becky Gray, to run some ground-breaking events for her luxury network.

She recently held a luxury portfolio brand symposium which brought together a network of designers, builders, boat and high-end car representatives to talk about “unlocking luxury.”

Gray works a lot with wealth managers and invites hedge funds and accountants to these kinds of events, too. She is planning another one on land sales, which is an up-and-coming market at the moment.

“We are really focusing on networking with communities of advisers, then bringing that knowledge to our clients,” she said.

She invites other luxury agents to these events.

“I want to be surrounded by the best; there’s more than enough business to go round and agents are the best contacts out there. To be advisers, you have to know what’s out there,” she said.

Email Gill South