A sign we'll likely be seeing more and more of in the coming months.

The word is out?Rubloff has been acquired by one of the fastest growing real estate companies in Chicago, Prudential Preferred Properties. Prudential Preferred has been growing quickly and this purchase makes it is one of the five largest real estate companies in Chicago.  The company will operate under the name Prudential Rubloff Properties and will have 17 offices and nearly 900 agents and staff. The terms of the transaction have not been made public.

The acquisition is another sign of the volatility in the business of real estate as well as the real estate market today. Medium-sized real estate brokerages are finding this economy tough to withstand and are being gobbled up by the larger companies. Many small boutiques and brokerages with niches which tend to have lower overhead seem to be able to hang on during this economic downturn, but medium-sized brokerages with more expenses are having a harder time.

What Will the Rubloff Agents Do?

When talking with Rubloff agents, we are hearing concerns. As is the norm with this type of merger, Prudential should be ready some unhappy agents. Rubloff agents are not used to franchise fees, which Prudential does have to charge. Rubloff agents are also used to a lot of free marketing materials (virtual tours and open house signs to name two) that in the past Prudential has charged their agents for. As always, there will be a culture gap and it will be interesting to see how the new combined management team bridges it.

This is a pivotal time in real estate; Darwin’s theory is most definitely playing out before our eyes. Expect more of the same as the summer real estate season ends and cash flows at brokerages slow down.

03 September 2009 ? Home Services of America, a division of Warren Buffet’s investment firm Berkshire Hathaway, has acquired Koenig and Strey, one of Chicago’s largest real estate brokerages. Koenig and Strey’s parent company, GMAC Home Services, LLC, was purchased by Canadian company Brookfield Residential Property Services. Shortly after that transaction closed, Brookfield began selling off locally run brokerages. No major operational changes are expected in the near future, as Home Services believes that real estate is a local business best run by local management.

6 July 2009 ? Don?t look for this week?s print edition of Crain?s Chicago Business. The publication has gone from a weekly to a biweekly print publication. The publisher is saying this is just for the summer months. This is another major sign of the transition of the newspaper industry transitioning from print to an online media. In the last months, the print issues have become very thin as a result of declining advertising revenue. At one time most of the major real estate brokerages would take full page ads on a weekly or monthly basis to advertise upper bracket properties, but the industry is now focused on online media for both brand and listing promotion.

Baird & Warner Consolidating Offices

Two weeks ago Sudler|Sotheby’s closed their 1650 N. Wells Street offices and relocated all of their agents to their head offices at the Polmolive Building at 919 N. Michigan Ave. and to their recently aquired offices from Sussex & Reiley at 912 W Armitage.

Over the weekend Baird & Warner announced to their agents that they are also pulling out of their offices in the Old Town area. They are closing their office at 1510 N. Wells as well as their Bucktown/Wicker Park offices at 1936 West Division Street. Many of the agents will be moving to the Lincoln Park offices at 2762 N. Lincoln Ave.

We can only expect further consolidation in the industry.