Compass, the New York real estate agency is buying a San Francisco real estate agency Pacific Union International, the San Francisco Chronicle reports.
The current acquisition is underway less than two months after Compass acquired another real estate agency in San Francisco, Paragon Real Estate Group.
According to consulting firm Real Trades, Compass is the sixth largest residential real estate agency in the US in terms of volume of transactions. And Pacific Union is the fifth largest so that the combination of the two companies will create the third largest agency in the country. Compass is currently the largest real estate agency in San Francisco and has a 9.4% market share.
This is also expected to be the second largest acquisition this year of a US real estate agency. According to Steve Murray, president of Real Trends, the purchase price is between $100 million and $200 million.
The company, which presents itself as a technology real estate platform, founded in 2012 by Dr. Ori Alon with Robert Rafkin, a former White House consultant and head of the office of CEO and president of Goldman Sachs.
According to people close to the deal, Ori Alon’s company is aggressively courting senior agencies in the San Francisco area, offering them more generous commissions and bonuses. “I know that they are offering agents shares and a high sum of money to work with them,” said Jeff Sposito, president of real estate agency Rockleaf.
Last December, Compass announced that Softbank’s Vision Fund had agreed to invest $450 million in the company. As a result, the total capital raised $775 million.