Mark McLaughlin Talks Mergers and Acquisitions

Former Pacific Union and Compass California boss Mark McLaughlin has retired, kind of.

“I turned 66 [on Tuesday] and I think it’s my turn to enjoy my life with Monique, my wife,” McLaughlin said as he described his new part-time advisory role with Compass earlier this week.

After his two-year contract as chief real estate strategist ended this summer, McLaughlin’s now settled into semi-retirement, if you can call it that.

Aside from his role at Compass, he’s an advisor in Homeowner.ai and mortgage lender Realfinity through past investments made via his venture fund, McLaughlin Ventures. Taking on additional clients in the brokerage business is not likely, he said, pointing to a conflict of interest given his insights into Compass.

The executive was Compass California president between September 2018 and December 2020. Before that, McLaughlin grew Pacific Union International through a dozen acquisitions when he stepped into the CEO role in 2009. When Compass bought Pacific Union, McLaughlin had grown the brokerage to $14 billion in annual sales volume.

Anatomy of a brokerage deal

All that said, McLaughlin’s not stepping away from the M&A world entirely. In fact, before he hung up the phone with The Real Deal, he offered his final comment: “Make my phone ring.”

That was after plenty of shop talk around the current state of play for brokerage M&A.

McLaughlin expects continued industry consolidation, acknowledging that, while this may not look like a good time to sell, earnouts and other clauses baked into a contract could make a trade more palatable to sellers.

While brokerages generally trade at a multiple of 3 to 5.5 times earnings before interest, taxes, depreciation and amortization, McLaughlin said conversations around EBITDA are more nuanced now. That’s in part due to non-recurring expenses, such as legal fees or last year’s National Association of Realtors-related commission settlement that can distort EBITDA, a metric that offers a clear line of sight into a business’s cash flow, ability to pay down debt or valuation.

“The thing you have to keep in context is four years ago, five years ago, the negotiation between buyer and seller was, ‘What’s my multiple of EBITDA going to be?’ Now, it’s ‘How many adjustments can I make to my EBITDA so we can work out a deal,’” McLaughlin said.

Additionally, whether or not a brokerage is more desirable to prospective buyers because of diversified revenue streams from services such as title or escrow, depends on the market it operates in. If a market is already saturated with those ancillary services, a plain vanilla brokerage deal could work, he offered.

Compass makes another Colorado buy

One name that’s making things work on the M&A front: Compass.

The brokerage said Thursday it snapped up Littleton, Colo.-based Colorado Home Realty, which counted $617.2 million in 2024 sales volume under co-founder and CEO Matt Hudson.

The brokerage joins Compass’ existing footprint in the state with nearly 20 offices in Aspen, Boulder, Denver and Vail among other locations.

Colorado Home Realty’s acquisition follows Compass’ purchase in early July of PorchLight Real Estate Group, also based in Colorado. PorchLight had sales volume last year of $922.3 million.

Later in July, Compass bought Cottingham Chalk in North Carolina, with $589 million in 2024 volume.

LA’s largest brokerages

Speaking of sales volume, TRD’s ranking of Los Angeles’ largest brokerages was published in our September issue and elicited strong reactions as they always do.

On the actual substance of the rankings, the top three firms remained unchanged with Compass leading the pack by a wide margin with $14.5 billion in sales across 5,966 on-market deals for the July 1, 2024 to July 1, 2025 reporting period. Coldwell Banker Realty came in at No. 2 with $5.4 billion in volume and 2,289 deals. Meanwhile, The Agency closed on $3.6 billion across 1,147 deals to round out the top three.

Interestingly, Carolwood Estates shot up four spaces on the list to No. 4 with 478 on-market deals, tallying to $3.3 billion in volume. It’s an impressive feat for a brokerage that launched in November 2022.

Up next is the agents and teams ranking for Los Angeles in our October issue.

Palisades resi bests itself, again

If anyone’s keeping tabs on Carolwood, it only took a week for the firm’s name to resurface in another TRD headline.

The brokerage was involved with the $25.8 million sale of 1124 Napoli Drive, which was dropped in the MLS for comp purposes but traded off market. Napoli Drive now sits as the Palisades’ most expensive residential purchase this year.

Carolwood’s Zac Mostame and the Beverly Hills Estates Lea Porter together represented both the buyer and seller in that trade.

Napoli Drive beat the Los Angeles community’s previous record sale in the $22.1 million purchase of the Parry Residence at 14924 Camarosa Drive. That property held the title of priciest Palisades deal for about a week.