“We are just beginning”: Peerage’s Miles Nadal talks Jameson Sotheby’s and his plans for US luxury brokerage domination

The naysayers will tell you that this is a bad time to get into luxury brokerage. Margins are small, competition is fiercer than ever, and the high-end market is trending down.

Miles Nadal isn’t concerned. He’s excited.

“We believe what Warren Buffett said – you should be greedy when others are fearful, and you should be fearful when others are greedy,” Nadal told The Real Deal, one day after his firm Peerage Realty Partners acquired a significant stake in Jameson Sotheby’s International Realty.

Peerage Realty bought its stake in the Chicago luxury brokerage from several investors, some of whom aren’t active in the business, according to Nadal. Peerage will provide capital and resources that will enable Jameson Sotheby’s to “grow to the next level,” Nadal said.

Terms of the deal were not disclosed, but Jameson Sotheby’s management team, including CEO Chris Feurer, will retain their stake and continue to lead the Chicago-area franchise.

Peerage, based in Toronto, made a big splash last year when it acquired the rights to every Sotheby’s International Realty franchise in Canada. Overnight, it became the king of luxury condos, controlling franchises and a few local shops that collectively brought in nearly $10 billion in sales volume.

And it has made no secret that it intends to become a force in luxury brokerage in the States. The realty group, founded in 2007 as a division of private equity firm Peerage Capital, has built a $250 million war chest to buy up stakes in brokerages in the U.S. Last year, it acquired Denver-based brokerage Madison & Company Partners.

“On a scale of one to 10, we’re barely at one, relative to our ambitions, so we are just beginning,” said Nadal, a Canadian entrepreneur who is also one of the world’s most prominent sneaker-heads. “We’re cherry-picking jewels: wonderful, iconic, independent firms that have been able to succeed in the face of all of the challenges of cyclicality and seasonality of what’s happened in the brokerage industry.”

Peerage’s decision to enter Chicago comes at the heels of a particularly tough year for its luxury market.

In 2019, ultra-luxury home sales of $4 million and above – a specialty for Jameson Sotheby’s – saw a 28 percent decline, while the million-dollar home category was down 6.5 percent, according to a Crain’s data analysis.

Nadal acknowledged that Chicago’s luxury market is experiencing a “cyclical low,” but he believes it’s stabilized, and will rebound and move forward at a more accelerated rate in the next two to five years.

In 450-agent-strong Jameson Sotheby’s, Peerage picks up a firm with a true luxury pedigree. Though it has commercial and rental arms, the brokerage makes its bones selling high-end homes in Chicago and its suburbs to the captains of the universe. It claims to have generated $2 billion in sales volume last year across its six offices. It was the exclusive sales agent for JDL Development’s No. 9 Walton, the most successful condo building in the citys’ history. It currently has about a dozen new development projects.

The Peerage investment will enable Jameson Sotheby’s to fulfill its three-year vision of expanding its current footprint in the city and suburbs and dominating the $1 million-plus luxury market and the development markets around all six of its offices, according to Feurer.

“We really focus exclusively on agent growth rather than market share, so the ability to partner with a company that has such a history … is really going to help accelerate our goals,” he said.

Nothing is expected to change operationally, as Jameson Sotheby’s will continue to operate as an independent franchisee of Sotheby’s International Realty and its parent company Realogy.

Feurer called the partnership between Jameson Sotheby’s and Peerage “unique” and potentially “one in a million” because of how well everything aligned.

Jameson Sotheby’s is the second Chicago brokerage to partner with a private equity firm. The first was @properties, which sold a significant share of the firm to private equity firm Quad-C Ventures in April 2018.