What The NY AG’s Compass Antitrust Investigation Could Mean

The New York Attorney General is investigating Compass over antitrust concerns following its blockbuster merger with Anywhere Real Estate.

Earlier this week, The Real Deal first reported that agents with the office had reached out to New York City brokerage leaders about the probe. A representative for Attorney General Letitia James’ office later confirmed an active inquiry but declined to share any details.

The investigation comes after the brokerage closed its $1.6 billion acquisition in January, months earlier than expected, in part, because a lawyer with ties to the Trump Administration helped the company avoid an extended review from the Department of Justice.

New York is home to Compass’ headquarters and to several top brands it picked up in the merger, which made its newly formed holding company, Compass International Holdings, the largest residential real estate firm in the country with more than 340,000 agents and franchisees.

After the federal greenlight, James appears to be adding the newly minted megafirm to her track record of challenging President Donald Trump’s administration.

“Anything touching the Trump Administration, they’re going to pick up,” Marx Sterbcow, a New Orleans-based real estate attorney, said, referring to James’s office’s antagonistic relationship with the president.

If the investigation finds that the brands underpinning Compass are too dominant in some real estate markets in the Empire State, authorities have a few options to remedy the issue, according to Sterbcow. The most unlikely of which would be to block the merger in the state, but the company could be required to divest from some of its franchises, reduce its agent headcount or face a fine.

However, Sterbcow said it’s too early to predict the outcome and that he doubts the investigation will reach that stage. Instead, he said Compass has likely already taken steps to address the office’s antitrust concerns, pointing to its subsidiary, Christie’s International Real Estate, recently ending its licensing agreement with one of its affiliates in New York City and the tri-state area.

He also pointed to another factor, which he called “leakage” — agents leaving a firm after a merger or acquisition. He said across the industry, the average is between 10 and 30 percent within the first two years, so the firm is likely on its way to significantly reducing its agent headcount in some markets relatively organically.

“They don’t have the market power today that they did before,” Sterbcow said of Compass.

However, James’s investigation could spark other states to open inquiries of their own, particularly in states such as Illinois and California, which have adopted similar priorities as New York in the past. San Francisco, along with Manhattan, were identified as markets where a combined Compass and Anywhere controlled the majority of transaction volume, according to an analysis by regulatory publication Capital Forum in 2024.

But it’s likely that other states will wait to see what happens in New York before launching separate probes, according to Sterbcow.

In case you missed it…

Earlier this week, New York lawmakers also took aim at private listings and broker licensing by approving two pieces of legislation, which are now headed to Gov. Kathy Hochul’s desk.

If approved by the governor, the bill regulating private listings would require agents to list their sale and rental properties on a multiple listing service or public website in a “timely manner” unless they’ve obtained agreement from the seller in writing to keep the home off-market. A previous version of the proposed law had a tighter requirement, mandating that agents post listings within a day.

The broker licensing legislation would raise the bar for agents to become licensed brokers by extending the amount of time they’re required to work as salespeople before obtaining the license from two years to four years. Those without four years of experience would be required to prove they’ve had three years of experience in the real estate industry through a sworn affidavit.

NYC Deal of the Week

The most expensive sale to land in city records this week was for a condo at Extell Development’s 50 West 66th Street, which closed for $36.3 million. The apartment spans nearly 4,900 square feet and has four bedrooms and five bathrooms.

Unit 56N also features two private loggias and views of Central Park and the Hudson River. Amenities in the 70-story tower include indoor and outdoor pools, a bowling alley, and pickleball, basketball and squash courts.

An in-house team with Extell, along with Douglas Elliman’s Janice Chang and Corcoran’s Hilary Landis and Beth Benalloul, heads sales at the building.