UPDATED Dec. 7, 2021, 12:08 p.m.: The self-proclaimed “last man standing” at the helm of an independent residential brokerage in New York City, Frederick Peters, has sold his firm of 30 years.
Warburg Realty was sold to Coldwell Banker in a deal that closed Tuesday, the companies told The Real Deal. Financial terms were not disclosed but the firm will be rebranded as Coldwell Banker Warburg in January. It will be the first time Coldwell Banker has had a company-owned presence in the city.
Peters, the former CEO of Warburg, will be president of the new firm and report directly to Ryan Gorman, CEO of Coldwell Banker. His daughter Clelia Peters, Warburg’s president since 2016, has left her post to focus on proptech investing but will remain an adviser to Warburg. She had joined Bain Capital Ventures in February 2020 as a partner but had continued at Warburg until now.
Fred Peters said the decision to sell boiled down to a “kind of a paradigm shift” in his thinking about the future of his firm and what Warburg could offer its agents.
“There are a number of things my competitors do that I would never do, but there are opportunities and services that they can offer because of their financial heft which I couldn’t,” he said. “So I assessed all my options and this was clearly the way to most powerfully equip the people who work for me in this new environment.”
He pointed to Coldwell Banker’s national and international referral network and staging program in particular.
“I’ve had this conversation a lot in the last five years and this was the first time that it ended up really feeling compelling to me,” Peters said, adding that there were no financial concerns motivating the sale.
Peters founded his firm in 1991 by buying a majority stake in Albert B. Ashforth after working his way up the ranks. The firm then operated as Ashforth Warburg before changing its name to Warburg Realty in 2003.
The firm has consistently ranked in the top 10 of The Real Deal’s annual brokerage ranking. Last year it made the list with $238 million in closed sales volume on the sell-side. Its 120 agents work out of two offices, in Tribeca and on the Upper East Side, according to its website. In 2008 it had 150 agents across five Manhattan offices.
Clelia Peters, who joined Warburg in 2014, said that working alongside her father and Warburg’s agents has been “an extraordinary experience” and that she was “looking forward to cheering from the sidelines as this partnership raises the bar for luxury agents in New York.”
For Coldwell Banker, the acquisition gives the brand an established base in Manhattan from which to build. In an interview, Gorman said that before connecting with Peters, he had been planning to build a New York City brokerage from the ground up.
The two men met in 2019 at an Inman conference in Las Vegas. Peters was there as the unofficial nanny for his 6-month-old granddaughter while mom Clelia spoke at the event.
“Everybody stops to talk to a man with a baby,” said Peters. “We hit it off and we stayed in touch.”
Gorman, who is based in Morristown, New Jersey, said he and Peters often took long walks through Central Park, discussing the New York market as he mulled how Coldwell Banker would break into the city’s notoriously tough brokerage landscape.
Though Coldwell Banker has had franchises based in Manhattan before, most did not last. Coldwell Banker Hunt Kennedy was the sixth largest brokerage in the city, with more than 200 agents, before it shuttered in 2009 after its debts grew to $12 million. In 2013 Coldwell Banker paired with Bellmarc to take another shot, investing a pile of money into Neil Binder’s brokerage and pushing the agent count to about 550, but the move ended badly.
Gorman said the idea of an acquisition came up organically with Peters.
“We just got on famously and really enjoyed one another’s company,” said Gorman.
Warburg joins a long list of small, independently owned brokerages that have been snapped up in recent years by larger companies seeking market share.
Stribling & Associates was acquired by Compass in 2019 as part of a $2 billion deal ostensibly to grow out its new development business in New York. (It was after Stribling’s sale that Peters famously declared himself “the last man standing” as the owner of a boutique residential Manhattan brokerage.)
Though a few boutique firms remain independent, such as Jed Garfield’s Leslie J. Garfield, Adam Modlin’s Modlin Group and, most recently, Ryan Serhant’s year-old firm, Warburg’s status as a stalwart had been unshakeable for three decades.
What changed for Peters appears to be two-fold. He attributed the evolution in his thinking in part to the “philosophical concerns” raised by the pandemic and in part to his daughter and long-time colleague, Clelia Peters.
“The pandemic did sort of reshuffle my head about thinking about ways for the company to go forward into the future, even beyond the point that I was there,” he said. “[Clelia] is a businesswoman so I think she has helped me in a lot of ways [about] how to think in a more business-like way about Warburg.”
Peters vowed that the “personal touch” his boutique firm is known for will not change and said he has no plans on leaving any way besides “feet first.”
Some loose ends around the deal remain. In April, Warburg launched a referral partnership with Edgardo Defortuna’s Fortune International Realty in Miami in a bid to compete with larger, multi-market firms and increase offerings to clients. Peters said on Tuesday the status of the Fortune partnership has to be worked out.
Correction: This article has been revised to reflect that at least one Coldwell Banker brokerage in Manhattan remains open.