Compass acquires San Francisco resi brokerage that did $2.3B in sales

Deal for Paragon’s 225 agents and 8 offices makes Compass top brokerage in SF

TRD LOS ANGELES /
Jul.July 09, 2018 02:30 PM
San Francisco skyline with Robert Reffkin and Bob Dadurka

Compass is forging ahead with its national expansion by acquiring Paragon, a 225-agent firm in San Francisco that closed $2.3 billion in sales last year.

The deal, announced Monday, will boost Compass’ ranks to 500 agents in the Bay Area, two years after it launched there, making it the top agency in San Francisco by sales volume and market share, Compass said. The purchase will better position the New York-based firm in a market where home prices, fueled by the Silicon Valley tech industry, continue to surge to record highs.

Combined, the companies had $4.5 billion in 2017 sales volume, Compass said. Terms of the deal were not disclosed.

Paragon, which currently has eight offices, was launched in 2004 by Bob Dadurka, Anita Head, George McNabb and Sally Stull.

Dadkura, who is Paragon’s CEO, said Compass reached out six to eight weeks ago to explore a possible deal. He said Paragon is having its best-ever year, with sales up 20 percent year-over-year during the first six months.

“Our market has always been competitive,” Dadurka said, of the Bay Area’s rising home prices. “It’s becoming more of an international and tech-centric market, so partnering with Compass and responding to the market in the proper way, together we’ll have a very dynamic company through which to do that.”

Last year, Compass set out to capture 20 percent market share in 20 U.S. cities by 2020. Since receiving a $450 million investment from SoftBank in December, the six-year-old company, now valued at $2.2 billion, has grown aggressively by hiring agents — and acquiring firms in new cities.

In the past several months alone, Compass has picked up eight brokerages, including Conlon Real Estate, a 300-agent firm in Chicago. “M&A is just one part of our core strategy,” said Rob Lehman, Compass’ chief growth officer, during a recent interview with The Real Deal. “There’s no question that there have been more acquisitions.”

The deal will give Compass a stronger foothold in San Francisco, where housing prices have been going through the roof.

The average sales price for a house in San Francisco rose $205,000 to $1.62 million during the first half of 2018 — a record increase, according to an analysis by Paragon. The average condo price rose $71,000 to $1.21 million.

The massive spike can be traced to SoftBank’s $100 billion Vision Fund, which has been pouring money into Silicon Valley startups, as well as to recent IPO activity and the steady growth of Facebook, Apple and Alphabet.


Related Articles

arrow_forward_ios
Chris Cortazzo (Credit: Marc Piasecki/GC Images via Getty Images)

One person, three roles: Chris Cortazzo buys $20M Malibu home, serves as agent for both sides

One person, three roles: Chris Cortazzo buys $20M Malibu home, serves as agent for both sides
Nile Niami and his Bel Air spec home (Credit: Araya Diaz/Getty Images, Juwan Li and Marc Angeles)

Compass lending service sues Nile Niami over Bel Air mansion

Compass lending service sues Nile Niami over Bel Air mansion
Prop 15 property tax measure draws millions (Credit: iStock)

Prop 15 property tax measure draws millions of dollars from for and against campaigns

Prop 15 property tax measure draws millions of dollars from for and against campaigns
John Zhao and a rendering of Oceanwide Center (Credit: DBOX, and ERIC PIERMONT/AFP via Getty Images))

Oceanwide Center sale in San Francisco delayed 3 more months

Oceanwide Center sale in San Francisco delayed 3 more months
From left: Tami Halton Pardee, Chris Cortazzo, and Kurt Rappaport (Credit: OGUT/Star Max/GC Images via Getty Images, Joshua Blanchard/Getty Images, and Anne Cusack/Los Angeles Times via Getty Images)

LA’s market makers: A ranking of top resi agents by on-market deals

LA’s market makers: A ranking of top resi agents by on-market deals
California is allowing barbershops and salons to reopen under new coronavirus mitigation guidelines (Credit: Noam Galai/Getty Images)

California allows barbershops to reopen, but LA holds back

California allows barbershops to reopen, but LA holds back
Real estate brokerages in Los Angeles and elsewhere have made shifts in their business over the last five months that could be for the long-term.

Survival of the slimmest: TRD looks at the future of the residential brokerage

Survival of the slimmest: TRD looks at the future of the residential brokerage
LA County assessor Jeffrey Prang

LA County properties valued at nearly $2 trillion…before pandemic

LA County properties valued at nearly $2 trillion…before pandemic
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...