In SF, East Bay agents are “trying to find their home for the coming years”

Vanguard Properties’ new office in the tony East Bay enclave Montclair looks awfully familiar to its latest batch of recruits.

The largest independent brokerage in the Bay Area  took over the 6,100-square-foot space from Compass, which inherited it when it bought Pacific Union, an independent agency where many of the current Vanguard agents used to work.

Call it a game of brokerage musical chairs.

“They’re more than welcome to have the desk that they used to be in,” said Vanguard COO David Chol. 

The party game is being played against a backdrop of change in the East Bay, and its winners are likely to be those brokerages that have the money and appeal to expand. Perhaps surprisingly in a place where Compass has been the dominant force for over five years, many of them are independents like Vanguard, taking advantage of the downturn to pick up agents, settle into new digs and get ready for a market reset.

Oakland, Berkeley and other inner East Bay cities used to be natural stopping points for young families leaving San Francisco for more space and sunnier weather until the pandemic pulled workers farther east to Alamo and Danville for more breathing room. Others decided to live full-time in vacation destinations around Lake Tahoe or in wine country. 

Now, with workers heading back to offices at least a few days a week, demand for the commute-friendly inner East Bay is increasing again. That demand is butting up against very limited inventory, as owners locked into low interest rates stay put. Agents in the area — like those around the country — are doing everything they can to compete for clients and listings but still have to contend with more downtime than they’re used to.

In other words, those who were busy for years suddenly found themselves with both the time and the motivation to see if the grass was greener elsewhere, their curiosity amplified by widespread anxiety over the fallout from lawsuits against the National Association of Realtors and subsequent settlements on buyer commissions — perfect conditions for agencies to recruit.

In this, the Bay Area — for all its idiosyncrasies — is a lot like the rest of the nation. Of 1,500 agents surveyed by Coldwell Banker recently, only 61 percent planned to stick with their company this year. In 2023, 75 percent said they’d stay put.

An independent brokerage “assassin”

Agents who are moving seem to be searching for a white glove brokerage.

The Agency is using its boutique reputation to recruit and has hired 25 agents in a recently opened Berkeley office, according to Jeff Samuels, regional manager for The Agency in Northern California. Many of them were with former independents that became part of Compass via acquisition. 

“What would their old local brokerage from 15 years ago look like if it launched today?” Samuels said. “That is what agents are on the hunt for.”

The nearly 20 agents who joined Vanguard’s Oakland expansion early this year told Chol that his culture felt welcoming, almost like their old independent companies before they were bought by a bigger corporation. 

“What they wanted was a place that they can call home for the rest of their careers that will provide them with the level of service that they grew accustomed to and grew to love, but they feel in many respects they had lost,” said Chol. Getting to do that in a familiar office was an extra perk.

It wasn’t so long ago that independents ruled the East Bay, providing a framework for their comeback. When Vanessa Bergmark became owner of the nearly 50-year-old independent Red Oak Realty in 2010, markets like Oakland, Berkeley, Alameda and Albany were filled with distinctive agencies, she said. 

“What they wanted was a place that they can call home for the rest of their careers that will provide them with the level of service that they grew accustomed to and grew to love but they feel in many respects they had lost.”
David Chol, Vanguard Properties

“Everyone competed against each other, but they all had their own vibe,” she said. “If you were the fancy agent you went here, but if you were the community-based volunteering agent you went here, and if you were the hippie agent, you went here.” 

Then Compass came in, “so clinical and efficient, like an assassin,” she said. The national, tech-heavy firm bought Pacific Union, San Francisco-based independent Paragon and South Bay-based Alain Pinel in 2018 and 2019. All three had a big presence in the East Bay.

“It was like, wow, this person came in the middle of the night and eviscerated everyone,” Bergmark said.  

After that, the East Bay’s colorful collection of brokerages became “just black and white,” she said. And for the last five or six years, it stayed that way. 

So Bergmark was delighted to see a change back toward independents in a market that’s been “long overlooked” — even if that means more competition for her 160 agents.

“I would rather the competition be someone who we speak the same language with and we could build a relationship with,” she said.

Vanguard’s Chol said it was “really bittersweet” to see other independents get “bought out or get pushed out of business.” To be sure, that now plays to his advantage.

As he recruited agents over more than 50 one-on-one lunches, dinners and coffees, he kept hearing the same thing. 

“They told us, ‘Hey, this is how we used to operate over the years. This is what we miss. This is what we like. This is what we want,’” he said. 

He gave it to them. Between an office in Lafayette and the new Montclair quarters, the East Bay openings represent the biggest expansion in the company’s nearly 40-year history, Chol said. He described the new agents as an “all-star” cast. 

“It’s like they got Brad Pitt, George Clooney, they got everyone,” Bergmark agreed. “It’s damn near ‘Ocean’s 11.’”

Time for change 

In a hot real estate market, agents aren’t this antsy, the agency heads agreed. That makes the current market a possible once-in-a-cycle moment for movement.

“If there’s not a lot of business it gives [agents] space to start saying, ‘Maybe I’m at the wrong brokerage,’ so they pick up and they go,” said Bergmark. “Vanguard always had their eye on Oakland, but this was their opportunity to strike.”

The Agency’s Samuels saw the same hunger for change among the 25 agents who came aboard at its new Berkeley location as well as the Beverly Hills-based company’s first East Bay location, farther out in Alamo. Since Compass is the biggest game in town, it makes sense that most of the arriving agents are from there, he said, but the moves represent a more macro-level sense of searching among many of his peers.

“It’s a moment where people are settling into what’s next in real estate and trying to find their home, wherever that is, for the coming years,” he said. “It’s not any one brokerage.”

Both Vanguard and The Agency said they are not looking to pick up discontented agents. 

In fact, just the opposite. 

“You all said you want this office, right? Let’s show up. Let’s collaborate. Let’s have fun.”
Jeff Samuels, regional manager for The Agency in Northern California

“I want people that are happy where they are, and perhaps also just looking for a change,” Samuels said, adding that he said no to some “big names” during the expansion because they didn’t fit the positive atmosphere the company is trying to cultivate. “We are careful about curating with the right people that don’t break our No. 1 rule, which is no assholes.” 

The recent moves shed light on agents’ psychology at different parts of the cycle, said Kevin Patsel, regional manager for Northern California at Compass.

“When you have a new brokerage coming into the market, they are often the shiny new brokerage that looks appealing and is something different, and people gravitate towards that,” he said. “For whatever reason the agents left, that was appealing to them at this time, just as it may have been to many agents when Compass came into the market.”

He believes that the movement among agents has helped Compass more than it has hindered it. The agents Compass lost in the East Bay over the last year have been more than made up for by the ones they’ve gained, dollar-volume-wise, he said, including a “very big culture carrier” who recently came over from Sotheby’s. Compass is still by far the biggest presence in the inner East Bay, with 400 agents — about half of whom will be working out of its new Oakland office, where it has signed a seven-year lease on just over 7,000 square feet a few blocks from the old office. 

It also has two offices in Berkeley that it has no plans to combine, Patsel said, and one on the island of Alameda. 

“The other brokerages may get agents here or there, and that’s fine,” he said. “But in the long game, I think we’ll continue to stay the No. 1 in market share, with the largest amount of agents and the most earnings in the East Bay.” 

Follow the leader

Samuels at The Agency said he had “an instinct that there was something going on in the market and that people were going to move, no matter what.” 

But even he was surprised when a few new agents quickly became 10 and then 20 and then 25, he said, as word began to spread. The same scenario played out at Vanguard.

“Some agents were not necessarily even thinking about moving, but what they did see was that people they respected were making the move, and so they were willing to talk to me,” Chol said. 

Many of the agents who switched agencies said that they felt a more direct connection to management than they did at their previous companies, important given the current uncertainties on big issues like buyer commissions. 

“They are looking for the wisdom and expertise of the staff and the manager,” said Samuels, and were missing the ability to “pick up the phone and talk to a manager they felt like they were going to get great insights from.” 

Amy Robeson, a former Compass agent who moved to Vanguard, said knowing that answers to her questions are now just a phone call away has made her feel, “nimble and strong,” like she had “lost 15 pounds overnight.” 

Compass’ Patsel, who was the first sales manager hired to lead Compass’ Northern California expansion in 2018, said that his firm has come a long way in figuring out how to unify disparate companies. 

“I feel that we’ve dialed in so people do feel that they have access to their sales manager and upper management,” he said.

Amid all the movement, some agents are realizing they would have been better off if they had just stayed put. Alameda agent Andrea Ruport moved from Compass to The Agency, following her managers and some agents she liked. She quickly realized the new digs weren’t the right fit for her. She missed Compass’ referral network and its technology and internal systems, which she said were years ahead of The Agency’s. She never had an issue hearing back from even the highest level of management at Compass. 

“I have Robert Reffkin’s number saved in my phone, and if I text him he will reply back to me,” she said. 

Another important dynamic impacting agents’ mindsets: the market is heating up again, according to Agency figures. Closed sales volume in Alameda County was up 37 percent this April compared to a year ago. 

The brokerage heads believe the area is poised for growth,  though they think agents will continue to move around in the year ahead. 

Now office leads just need to motivate agents to come into these regional offices, where spruced-up interiors, cafe-style seating, training sessions and guest speakers are meant to rally communities and build culture. 

“You all said you want this office, right?” Samuels said he told his agents when The Agency’s new Berkeley location opened its doors last month. “Let’s show up. Let’s collaborate. Let’s have fun.”