Coldwell Banker closes an office in Beverly Hills, and throws a big party

Brokerage touts it's No. 1 in Beverly Hills sale volume

Feb.February 21, 2020 01:34 PM
North Office at 301 Canon Drive and Jamie Duran
North Office at 301 Canon Drive and Jamie Duran

Shutting down an office is not usually a cause for celebration, but it was for the Beverly Hills arm of Coldwell Banker.

Because of L.A. Metro construction, the brokerage decided last year to shutter its south Beverly Hills office at 166 North Canon Drive, and shuttle personnel to its north Beverly Hills office one block away at 301 North Canon Dr.

Coldwell finished that consolidation Thursday and it marked the occasion with initially a quiet party. Two jazz musicians played plaintive melodies at the 301 North Canon courtyard in the late afternoon L.A. sun as real estate agents picked at cheese cubes.

But the event later turned festive with wine bottles opened, and dozens of Coldwell agents from throughout Southern California showing up including longtime top performers Jade Mills and Joyce Rey. Also there was Steve Frankel, who left Coldwell for Compass in January but then returned.

Jamie Duran, Coldwell’s Southern California president, needed a few minutes to hush a lively crowd before delivering remarks that effusively praised the Beverly Hills office. Tom Dunlap, head of the Beverly Hills office, said he was excited to the point that, “I have goosebumps.”

The excitement is perhaps warranted.

The office shutdown is not accompanied by any staff or agent layoffs, Duran said in an interview, and was rather the result of logistical concerns of the Metro expanding into Beverly Hills and encroaching onto the south office. Plus, Coldwell is putting money into expanding its now lone Beverly Hills locale.

Also, Coldwell ranks No. 1 in Beverly Hills sales volume, according to Multiple Listings Service data. (Although Duran declined to say whether the Beverly Hills branch was profitable.)

Coldwell had $2.8 billion in sales volume over the last 12 months in the city of Beverly Hills, or 19 percent of the market that has totaled $14.5 billion in sales volume over that period, according to MLS. Compass ranked 2nd in the area with $2.5 billion in sales volume, and Hilton & Hyland placed third at $2.2 billion.

Duran asserted that Coldwell is doing more with less, at least compared with Compass, the venture capital infused New York City brokerage that entered the Beverly Hills market in 2015. Coldwell has 320 agents in Beverly Hills compared to 502 agents for Compass.

Still, Coldwell has at times viewed Compass as the proverbial 800-pound gorilla.

Coldwell’s parent company is publicly traded Realogy Holdings Corp. — which filed an unfair business practices lawsuit against Compass last July — operated at a net loss of $98 million through the first nine months of 2019 (the company reported $4.5 billion in revenue over that time), which the business partly (and implicitly) attributed to Compass.

In the California and New York metropolitan areas, Realogy stated in its latest quarterly report that “certain competitors have investors that appear supportive of a model that pursues increases in market share over profitability, which not only exacerbates competition for independent sales agents, but places additional pressure on the share of commission income received by the agent.”

Or as Duran put it, “The biggest challenge for us as a company is to make sure we continue to stay relevant and that we stay in business,” and making sure that “the [profit] margins don’t continue to get thinner and thinner.”

A minute later, though, Duran spoke confidently about Coldwell and its decades on the Westside, plus a track record beating back upstarts including Teles (which Douglas Elliman purchased in 2017) and Partners Trust (which was bought by Pacific Union, which, in turn, was bought by Compass).

“We are seeing companies not lasting in this business because the [profit] margins are so thin, but we are a strong, long-lasting company,” Duran said.

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