Less than four months after the real estate industry’s two largest companies, Compass and Anywhere, announced plans to merge, the companies closed on a $1.6 billion deal on Friday.
Shareholders of both companies approved the deal at a special meeting Wednesday. Nearly all Compass shareholders (99%) supported the transaction, while 72% of Anywhere shareholders voted in favor of closing.
robert refkin
Compass CEO Robert Refkin will lead the merger of the two companies as chairman and CEO of Compass International Holdings.
“Our joint vision is to be the best in the world by providing real estate professionals with everything they need to realize their entrepreneurial potential,” Levkin said in a press statement released Friday. “What makes this moment unique isn’t the deal that brings two companies together; it’s that we’re bringing together the industry’s most respected brands and experts on a single, modern technology platform that can save you time, grow your business, and better serve your customers.”
Some real estate experts had wondered whether regulators would frown on a planned partnership between the two housing giants. According to RealTrends, Compass is the largest residential real estate brokerage in the U.S. by sales value, with over $231 billion in sales as of 2024.
Second place Anywhere is not far behind, with sales of $183.81 billion in 2024. After the merger, the number of agents at both companies is also considerable: Compass has approximately 40,000 agents, while Anywhere has 51,000 at its own brokerage firm and 250,000 at franchise stores.
But despite Democratic Sens. Elizabeth Warren and Ron Wyden urging the Justice Department and the Federal Trade Commission to investigate the deal, antitrust regulators failed to act by the Jan. 2 deadline under the Hart-Scott-Rodino Antitrust Act, recent SEC filings revealed.
The all-stock deal will see Compass assume Anywhere’s approximately $2.6 billion in debt.
Compass also said in an SEC filing Wednesday that it plans to offer $750 million of convertible senior notes in a private placement, giving buyers an option to purchase an additional $112.5 million of notes within 13 days.
The brokerage also said in Thursday’s SEC filing that it priced an $850 million offering of convertible notes due in 2031, with an option to raise an additional $150 million. Compass said in the filing that the notes are convertible at an implied stock price of approximately $15.98 per share.
The capital raised from the convertible notes will be allocated to “common corporate acquisitions” and will help Compass repay Anywhere’s debt and other costs incurred as a result of the transaction, according to the filing.
On Friday, Compass also released an open letter to its agents, affiliate partners and employees clarifying the brokerage’s vision, commitment and future plans. The letter can be viewed in full in Compass’ online newsroom.
As he has done many times in the past, in his open letter, Mr. Refkin cited his mother, Ruth, as his inspiration for starting a company that “delivers better outcomes for real estate professionals.” On Thursday, Levkin posted a selfie with Ruth on Instagram with the caption, “Celebrating a special day with dinner at my first inspiration.”
In his open letter, Mr. Levkin reiterated his commitment to the individual brands that will now operate under the Compass International Holdings umbrella, a point that has garnered a lot of attention in the industry.
“Each of our brands will continue to be independently operated, supported by our incredibly talented employees, and powered by a shared platform that provides tools and integrated services not possible in a standalone model,” Levkin wrote.
Later in the letter, he explicitly states that the @properties, Better Homes and Gardens Real Estate, Century 21, Christie’s International Real Estate, Coldwell Banker, Compass, Corcoran, ERA, and Sotheby’s International Realty brands will be retained for the company and its affiliated partners.
Regarding the company’s future plans, Levkin outlined three key action points. Build a network of consumer sites owned by major brokerages to route buyer inquiries to listing agents (citing the philosophy of “Your Listing, Your Lead”). and building an industry where sellers can choose when, where, and how to market their homes.
Despite Compass’ efforts to build a robust network of private exclusive listings within the company, Levkin also said there is “no obligation or policy” requiring anyone to use Compass Private Exclusives.
He concluded his letter by suggesting opening the door to agents and employees.
“I look forward to learning from you as we build the future of real estate around purpose, integrity, and professionalism,” Levkin wrote. “If you have any ideas, feedback, or experiences you would like to share, we would love to hear from you. We would be honored to join you on this journey. We are confident that we will be better together.”
Industry experts weigh in
Victor Land
As for how this mega-deal could impact the industry as a whole, Victor Land, founder and managing partner of WAV Group, told Inman that this is a “huge nothingburger” from an agent and broker perspective.
“Today in Minneapolis, I was at the MLS board meeting, and MLS has representatives from all these brokerage firms there, and what they understand is that Compass expects these businesses to operate as they do today,” Rand said. “These are great companies, well-run, independent brands that offer different products to consumers, and Compass values that and wants to keep these eight brands.”
Lund added that if both companies have a large share in a particular market, some offices may need to be cut, which has only a marginal impact from both companies’ perspectives. And if agencies find differences they don’t like after the merger, “they’ll vote with their feet,” he added.
james dwiggins
But James Dwiggins, NextHome’s co-founder and CEO, took a different view, expressing concerns to Inman that the deal would start “the biggest M&A race in the history of the industry” and ultimately reduce choice and power for consumers.
“In the next 36 months, there will be three or four major companies that control 60 to 70 percent of all real estate transactions in the United States, similar to the airlines,” Dwiggins told Inman in a text message. “Private listings will go mainstream, taking the industry back 40 years and moving away from the system we spent so much time perfecting for consumers. The sad part is that homebuyers and sellers will be hurt in the process. I worry about the reputational and legal scrutiny our industry will receive.”
Stefan Swanepoel, executive chairman of T3 Sixty, who has written more than 55 books and reports on residential real estate, said the merger was the largest ever in the consolidation cycle that the real estate consultancy first identified in its 2019 Swanepoel Trends Report.
Stephen Swanepoel
“That trend continues to concentrate market share in the hands of a few large companies,” Swanepoel told Inman in an email. “Consolidation is currently occurring primarily at the national infrastructure level rather than at the regional brand level. At the local level, cloud-based platforms and remote operating models are currently exerting the greatest consolidation pressure.”
In contrast to Dwiggins, Swanepoel suggested that major industry consolidation could occur gradually over several years.
“While the residential real estate brokerage industry will continue to support tens of thousands of agents across the country for years to come, an increasing proportion of home sales transactions will flow under the umbrella of a relatively small group of very large real estate companies,” Swanepoel added.
Editor’s note: This article was updated after publication with additional details about Robert Refkin’s open letter.
Email Lillian Dickerson
