Charles Dunn shuttered brokerage after sale to managing partner fell through: sources

Darrell Levonian, an executive at the firm, was in talks to run the brokerage business

Nov.November 02, 2018 03:09 PM
Darrell Levonian and Patrick Conn

Darrell Levonian, executive managing officer at Charles Dunn, was in talks to acquire the brokerage division at his firm before the company decided to close down the operation on Thursday, The Real Deal has learned.

Sources familiar with the deal, who said they were not authorized to discuss it, said that several months ago Levonian entered into a tentative agreement to run the brokerage division.

The deal fell through in the last 30 days, prompting Patrick Conn, the chief operating officer, to close down the brokerage altogether, a source said. The brokerage has been rumored to be for sale for two years, added another source at a competing brokerage.

Levonian and Conn declined requests for comment.

It is unclear what caused the deal to fall apart. In a memo sent to company employees, Conn said the decision was made to “avoid further expenses and potential losses.”

The departure of a top-producing team based in Glendale could have contributed to the decision. Just two weeks before the announcement, Bill Boyd and Linda Lee, plus two others, left the firm to join Kidder Mathews. The poach essentially closed down the 2,000-square-foot Glendale office, which was then subleased by Kidder. The departures left Charles Dunn with offices Downtown, in West Los Angeles and in Sherman Oaks.

The company will still maintain its property management division, which oversees more than 25 million square feet of commercial real estate, according to its website. The brokerage had a roster of about 50 agents as of 2016, but only 35 agents on its website as of Friday. It is unclear what will happen to the remaining agents.

Shortly after announcing the brokerage would close, the company began removing agents’ licenses from under the Charles Dunn banner, which left agents unable to close pending deals, according to a source familiar with the matter. After some protests from agents, Conn said Charles Dunn would extend the licenses through Nov. 9.

The source said the closure was a shock, but also said that in recent months they noticed “alarming” signs, such as longer-than-typical delays putting together marketing materials with no clear explanation.

With the deal dead, Levonian may look to build his own brokerage with agents at Charles Dunn’s former Century City office, which he managed, according to one person with knowledge of the matter.

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