The Real Brokerage’s planned acquisition of REMAX Holdings, Inc. is one of the largest brokerage transactions in recent years, as residential real estate companies seek to scale up and remain competitive in a consolidated industry.
The merger brings together a fast-growing cloud-based brokerage firm and one of the real estate industry’s most recognized global franchise brands, bringing together two very different operating models. The companies announced this morning that the newly formed Real REMAX Group will be a 180,000 agent platform valued at approximately $880 million.
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In a joint interview with Inman, Real CEO Tamir Poleg and REMAX Holdings CEO Eric Carlson discussed the timing of the deal, how the two models work together, and what the deal and continued industry consolidation mean for agents and consumers.
How long has this deal been in the works and how did it come together?
Tamir Poleg: Of course, there are things I can’t disclose and everything will be revealed later in the SEC filings, but I’ve known REMAX as a brand since I was a kid. The world’s most iconic real estate brand.
A few years ago, we realized that while Real had the growth, technology, and momentum, REMAX had a huge brand, a global presence, and a great agency focused on productivity, which we value. There are really good synergies between the two companies.
Eric and I have had many conversations about the future of the combined company and the value proposition for our franchisees and agents. At the end of the day, if our agents and REMAX franchisees win, we win. When we were convinced that they could leverage our technology and together lead the company to a better future, we decided to join forces.
How do these two models work together in practice, and what should REMAX franchisees expect?
Poleg: We’re going to run two different brands. REMAX will remain REMAX and Real will remain Real. The REMAX brand is almost eternal, and we want to maintain it and continue to strengthen it.
Last night I sat in a restaurant and thought about the fact that every adult in the restaurant knows the name REMAX. This is insane because there aren’t many brands in the world that have that kind of power.
Nothing changes for REMAX agents. Nothing changes for REMAX franchisees. Nothing changes on Real’s side.
What we want to do is offer our technology to anyone who wants to opt in and use it from the REMAX side. We hope to expand as soon as the store closes. Real Wallet with AI capabilities will have an opportunity. We believe our reZEN platform will help REMAX franchisees in any office transform their operations, increase efficiency and reduce costs.
Erik Carlson: REMAX has been in business for 50 years and has innovated and disrupted a lot. It is an iconic brand that is highly recognized by consumers.
What I really like about Real is that we have a great culture and great people. As I wrote a note to our network this morning, I truly believe that the best days are ahead for Real REMAX Group.
These deals are made or broken by integration, and integration is driven by people. For me, it’s always about people, process and technology.
REMAX has been a huge success in Canada. To what extent did you consider its global impact when thinking about this deal?
Poleg: From a branding perspective, we think there are a lot of opportunities for the combined company in North America, and that’s where we want to focus our efforts.
Globally, having access to more than 120 countries around the world would probably take us 10 or 20 years to achieve on our own. So it’s great to have that overnight, along with local knowledge and expertise.
At some point, Real may expand overseas, but for now it is focused on North America while continuing to support REMAX distributors around the world.
How do you view the current wave of consolidation in the securities industry, and was the Compass/Anywhere transaction factored into the timing of this consolidation?
Poleg: From a philosophical point of view, we’re not trying to react. I don’t think any other transactions are related to this. It makes sense on a standalone basis.
However, I believe that with the changes taking place in the industry, scale will become increasingly important. The fact that we have many agents and many listings puts us in a good position to prevail in any kind of changes that may occur in the market.
There are many forces on the surface today, and this combination puts us in a very good position to deal with them. Because of our technology focus, the fact that we have both the scale and the ability to react quickly allows us to win in a variety of scenarios.
Carlson: The industry is starting to consolidate, and there will probably be more consolidation when it comes to residential real estate.
But scale for scale’s sake doesn’t work. Must be of appropriate scale. These are complementary businesses with people who are focused on servicing customers every day, which is a key reason this transaction will be successful.
As brokerage firms continue to consolidate and grow in size, what does this mean for consumers?
Poleg: The human element in real estate is very strong, but it can’t be helped.
For consumers, there are two big things. One is that our network has become larger and that’s to their benefit. This means increased collaboration across countries, increased visibility, increased exposure to listings, and increased flow of knowledge within the network.
The second is to use technology that complements the agent’s capabilities to provide a better experience. People want a faster, smoother, more transparent experience, and this is what we can provide.
Will the combined company pursue a private listing or internal inventory strategy?
Mr. Poleg: We will do whatever we believe is in the best interest of our agents and their customers. Every decision we make is made in collaboration with our agent community.
If an agent decides there is an advantage to doing something in that direction, we are willing to do it.
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