Compass acquires Pacific Union
Compass, a real estate brokerage and technology platform valued at $2.2 billion, has purchased San Francisco-based brokerage Pacific Union International, the firm said Wednesday.
The move comes at the heels of Compass snapping up Paragon Real Estate Group, also based in San Francisco, less than two months ago.
“In recent years, real estate professionals and brokerage firms have been reacting to the world others are attempting to create,” Robert Reffkin, founder and CEO of Compass, said in a statement. “I believe the combination of Compass and Pacific Union will be a definitive step in building a company that can ensure the future of real estate is driven by the vision and aspirations of real estate professionals.”
Compass gets its competitive edge from tooling up brokers with its technology — an end-to-end platform that supports the entire buying and selling workflow. The New York-based company has rapid expansion plans, with hopes of opening up over 65 new offices this year in 20 cities spanning the U.S., according to the company. Already, Compass has multiple offices in San Francisco, as well as in Los Angeles.
"We're combining innovative technology with the most experienced agents," Reffkin, who previously worked at Goldman Sachs Group Inc., told the Business Times in 2016 after Compass first opened offices in San Francisco. Reffkin co-founded the firm with Ori Allon, whose two tech companies were bought by Google and Twitter.
Compass has raised $775 million to date, with major funding rounds last year led by Fidelity and SoftBank Vision Fund, which elevated the company’s value from $1.8 to $2.2 billion, according to TechCrunch.
Pacific Union CEO Mark McLaughlin has led huge growth at the firm. He and former wife Tracy McLaughlin founded their own residential brokerage firm, Morgan Lane, years ago. In 2009, the duo took a gamble to buy Pacific Union, a residential firm with more than 400 agents and 17 offices in the Bay Area, soon after a mortgage crisis triggered the Great Recession and home sales tanked.
The bet paid off. Since McLaughlin took over the helm, Pacific Union has skyrocketed from $2.1 billion in sales volume to $14.1 billion in 2017. Last year, Pacific Union acquired three companies in Southern California — John Aaroe Group, Partners Trust, and Gibson International — which added 900 agents to the team.
The company has been on a shopping spree since 2015 snapping up the three Southern California firms as well as East Bay-focused Empire Realty Associates and the Mark Co., a San Francisco condo marketing and research firm.
The luxury brokerage occupies over 50 offices and is the largest non-franchise residential brokerage in California, with 1,700 agents. Pacific Union expects to bring in sales of $18 billion in 2018.
“This is an exciting time as we embark on this partnership with Compass,” McLaughlin said in a statement. “I look forward to working alongside the Compass team to continue to improve the lives and businesses of our real estate professionals.”
The purchase price was not disclosed.
Full article here.