A boutique brokerage joined Compass last month, bringing its 60-person team to the brokerage giant.
LG Fairmont is changing its name to LGF at Compass and will hand over a cut of its commissions to Compass, which will provide support staff and technology platforms, ancillary services the firm struggled to build out independently.
The brokerage giant’s “brand will provide the highest yield on out-bound marketing,” LG Fairmont co-founder and CEO Aaron Graf said.
The partnership comes as the brokerage world weathers ripples of a slowing market and economic uncertainty.
Compass last month laid off 10 percent of its staff after reporting a $188 million loss in the first quarter. The company, which claimed the top spot among New York City residential brokerages by number of deals last year, wasn’t alone.
Redfin recently laid off 8 percent of its staff and Anywhere, the parent company of several major brokerages including Corcoran and Sotheby’s, has seen its stock decline roughly 50 percent from its February peak.
“I think they have a strong cash position,” Graf said, referring to Compass. “It would be different if all the other brokerages were up and they were down.”
Read more
Commercial
New York
REBNY, CoStar launch Citysnap listing portal
Residential
New York
Investor Frederick Rudd sells Ghislaine Maxwell’s former UES townhouse
It’s also the second partnership created in recent weeks by brokerages looking to create scale: Level Group merged with Oxford Property Group in June, which Level Group President and CEO Larry Link said was done in part to create scale.
“I wanted to be able to offer more tools to staff and agents but we were constrained because we didn’t have enough size to be able to pay for those things, frankly,” Link said.
Graf co-founded LG in 2010 with Derek Lee, aiming to form a boutique brokerage that would provide extensive hands-on support and training for brokers.
The firm was among a handful of startups like TripleMint and Elegran Real Estate to make waves with its approach to lead generation. Instead of paying top dollar for well-connected brokers, LG bought leads from proptech companies like Zillow and Trulia and handed them to their often inexperienced brokers in an attempt to level the playing field.
But by 2018, LG’s relationship with Zillow soured, and the company that once bought $125,000 worth of leads a month pulled most of its business from the listing site.