I was disheartened to read about Realogy’s decision to fold San Francisco-based Climb into their Coldwell Banker brand. If you look back at the initial announcement of NRT’s acquisition, it was full of popping champagne corks and excitement for the future.
Other high-profile mergers like Partners Trust and Pacific Union were an indication of the failure of major players like Compass to earn significant market share through competition, choosing instead to acquire already-successful indies to gain a foothold in competitive markets.
The Climb merger, however, was supposed to be a different story. Climb thought they were going to be doing bigger, better things through this merger, rolling out their brand for a much larger, national platform.
Now, with news that their colorful, vibrant offices will be shut down and their agents absorbed into existing Coldwell Banker offices in the San Francisco Bay Area, we are losing one of the truly great independent brokerages.
“It’s such a shame to lose an industry leader like Climb. I’ve always admired the indie energy and vibe Climb put out,” says Linnette Edwards, associate broker and co-founder of Abio Properties in Oakland, CA.
“I really respect how Climb’s founders kept that spirit going even after the sale to NRT. I feel like I lost a kindred spirit in the independent brokerage community. The real estate world really needs more, not fewer, creative brands like Climb.”
As someone who started an indie, I know the blood sweat and tears that go into it and to see it fold is so frustrating. Climb’s founders lived and breathed the brand. Chris Lim had shoes that said “Climb” that he wore to Inman events.
They were competitive but they were friendly. This is not about the loss of a competitor. It’s about the loss of one of the great independent brokerages in California. That’s not just bad for our market; that is something that diminishes us as an industry.
So many questions
It’s not bad to be Coldwell Banker. I value them as a brand and what they do for their agents. Was this just a misstep in their playbook, a misjudgement of the complications involved in trying to expand an indie brand? Did they know going in that this was eventually going to result in an absorption of a vibrant independent player?
In his response to the news, Climb co-founder Mark Choey seemed to express his frustration, saying, “Realogy has disappointedly (and not surprisingly) decided to focus on other priorities.” I wondered about that “not surprisingly.” Was this his fear all along?
If not, at what point did Realogy decide that they were unable to make an expansion of the brand work? Why did they not, at that point, look for another buyer?
Previously Realogy CEO Ryan Schneider said the move was “critical to Realogy’s long-term organic growth strategy.” Was that long-term strategy traded for a quick fix in order to boost their stock price, as Choey’s statement further suggests?
There’s a difference between killing a brand and selling it. Chris Lim’s brainchild was terminated and the founders seem to have had little or no say in that decision-making process.
Broken promises
What will the 160 agents and staff members, whom Gorman sees making a decision about their professional future “within a week” really do when the culture is so different from what they were looking for when they joined Climb? Does a new corporate franchise keep them happy?
“The shuttering of Climb highlights the challenges that we indie brokerages face today, but it’s not the canary in the coal mine,” says Abio’s Edwards. “Sure, the Compasses and Coldwell Bankers of our industry have tons of cash to absorb smaller brokerages and siphon off agents.”
“But we can compete against cookie-cutter companies by fostering a unique company culture that’s supportive and innovative, promoting our deep local knowledge, and focusing on strong bonds within our communities.”
All in all, this should serve as a wake-up call to indie owner and operators and the agents — more than 50 percent of the industry — who love life in an indie brokerage. Tread cautiously into the world of corporate acquisitions and their pretty promises of national expansion and brand recognition.
Once you’ve made that deal, your beloved brand is subject to the whims of corporate executives and the short-term desires of shareholders — no matter what they might have told you.
Troy Palmquist is the founder and broker of The Address in Southern California. Follow him on Facebook, or connect with him on LinkedIn.
Are you ready for what the industry holds in 2020? Inman Connect New York is your key to unlocking opportunity in a changing market. At Connect you will gain insight into the future, discover new strategies and network with real estate’s best and brightest to accelerate your business. Create your 2020 success story at Inman Connect New York, January 28-31, 2019.
Agenda | Speakers | Past Connect Videos
Thinking of bringing your team? There are special onsite perks and discounts when you buy tickets together. Contact us to find out more.
