Local Real Estate Giants Combine, form Voltron.

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Two Tulsa and one OKC company combined to form one giant Tulsa-based brokerage.

http://www.journalrecord.com/article.cfm?recid=90060

quote:
Newly formed brokerage targets $1.5B sales in OKC, Tulsa
June 27, 2008
TULSA – Merging one Oklahoma City and two Tulsa residential real estate brokerages will create synergies for extended growth in both markets, Chairman of the Board Sam Rader said Thursday.
The new company, Tulsa-based Coldwell Banker Select, boasts more than 20 offices with 700-plus agents across the state. Rader expects closed sales to top $1 billion this year, with reinvestment programs under way to help lift that to $1.5 billion over the next three to four years.
"We're investing quite a few dollars in technology and Web sites presentation and marketing programs and systems that we're building up," Rader said Thursday, as temporary signs started to go up signaling the brokerage change. "I would imagine over the first six or seven months we probably will invest close to half a million dollars in the operations to change the systems over and upgrade."
The two-part transaction started two days ago with the merger of Coldwell Banker Rader Group and Terry Gartside Realtors, adopting the Select brand name. Financial details were not disclosed. Rader Group finished 2007 with 5,600 transactions totaling $860 million in closed sales. Gartside completed the year with 1,000 transactions totaling $115 million.
On Thursday, Coldwell Banker Select acquired Marolyn Pryor Realtors of Oklahoma City, which charted $143 million in closed sales last year from 1,246 deals. Financials were not disclosed.
"This is the largest real estate merger we've seen in quite some time," said Darren Currin, vice president and research director for OKC Property Research LLC. "By combining, being such a larger office, this gives them a better ability to compete with the larger firms like Re/Max and Keller Williams."
In terms of licensed agents, the deal indeed ranks as the largest real estate merger in Oklahoma history, said Anne M. Woody, executive director of the Oklahoma Real Estate Commission.
The deal comes during an extended period of declining sales and home construction in the Sooner State's two largest markets, where Coldwell Banker Select will seek to grow its market share.
Through the first five months of 2008, Oklahoma City single-family building permits dropped 19 percent from year-ago marks to 2,075, while home sales fell 10.8 percent to 7,024.
At 3,443, Tulsa-area home sales from January through April stand 12 percent below year-ago results, while housing starts sank 27.5 percent to 1,025.
But Currin doubted declining activity played a role in the transactions, pointing out both markets outperformed national results – which showed a modest gain in Thursday's U.S. existing home sales report for May.
Walter Molony, senior public affairs associate with the National Association of Realtors, not only saw no trend toward brokerage consolidation or merger under the nation's housing crunch over the last two years, but also little loss in association membership.
"There was a flurry of consolidations and mergers that was notable about the beginning of this decade, but that seems to have trailed off," he said.
Rader, who now serves as a NAR regional vice president, said the consolidation had nothing to do with the current market.
"Our sales are down a little bit, but our sales price is still up in Tulsa and Oklahoma City," he said. "Our merger is a situation of seizing the opportunity when it came. We would have done this even in a strong market because we think we have a quality company and quality agents. We didn't examine the market conditions before doing this. We know the market conditions but our decision was not predicated by the market.
"Marilyn has a good company," he said. "She did not need to sell. She wanted to take advantage of the size and the tools we could offer. And she's known our firm for a long time."
Both Pryor and Gartside will remain with the firm, Pryor overseeing Oklahoma City operations from her Mustang office while Gartside serves as vice chairman.
"Nobody is retiring," said Rader.
"This move allows these three powerhouse companies to continue the legacies created by each owner," he said. "Each of us has built a successful business over the past 30 years, and now we have an incredible opportunity to expand those businesses far beyond what any of us could have imagined when we were starting out in the late '70's."
Started in 1977, Marolyn Pryor Realtors contributed a staff of more than 125 to man offices in Oklahoma City, Yukon, Mustang, Tuttle and Moore.
"This move not only allows me to continue the company's growth but expand it exponentially," said Pryor, now serving her second term as the president of the Oklahoma City Metro Association of Realtors.
The Coldwell Banker Select staff now includes six past or present state board presidents of the Oklahoma Association of Realtors as well as three former and two current members of the Oklahoma Real Estate Commission.
In Tulsa, CB Select draws 70 real estate agents from Gartside offices in Sand Springs, Sapulpa, Jenks and Glenpool, and 420 sales agents, with a staff of 50, from three Rader offices in Tulsa and others in Broken Arrow, Claremore Owasso, Skiatook and Sand Springs. Rader also contributed agents specializing in the Oolagah, north Tulsa and downtown Tulsa markets.
"I started my company 34 years ago," said Gartside, who with Rader is a past president of the Greater Tulsa Association of Realtors and the Oklahoma Association of Realtors. "While the company has certainly grown and had many successes over the years, this move will take us to a whole new level."
Through all of these combinations, Rader said the company faces only one situation of office overlap. For now, they intend to keep both open.
"We're going to wait and see," he said. "We might consolidate sometime in the future."
While Tulsa continues to present opportunities for growth, with the NAR reporting signs of a housing turnaround for later this year, Rader sees their best chance in Oklahoma City.
Last year Coldwell Banker Rader Group ranked ninth in closed sales among CB's 1,200 companies across the nation. RIS Media had ranked it 68th among all U.S. brokerages.
With $1.1 billion in annualized sales, Rader projects this merger will lift the Tulsa firm to sixth or seventh on the CB list, and probably into the 50s on the RIS list.
Rader projected the combination would lift his firm's Tulsa market share from about 20 percent to about 25 percent. He could not project its Oklahoma City market position,
"I don't think anybody in Oklahoma City has much more than 5- to 10-percent market share," he said. "There are just a lot of companies in the area. In Tulsa, three companies have about 50 to 55 percent of the market share."
Rader hopes to double CB Select's Oklahoma City agent roster by the end of 2009. That would allow the firm to carve out a larger stake while expanding in Tulsa.
"We would like to expand our sales in that market to not only reach one out of four, but to get into the 30- to 32-percent mark," he said of Tulsa. "What we need to do now is to build our offices up. This move gives us 12 to 13 offices in the Tulsa market so we have good coverage, but we need to build each of these offices up."
His target of 10- to 15-percent growth would give CB Select 9,000 to 10,000 sales a year, resulting in closed sales of about $1.5 billion.
"I'd like to achieve that by 2011, 2012," he said.