Valuation of the tech brokerage continues to astound
On a residential panel yesterday at a TRD event, Compass’ Rob Reffkin said, “the traditional brokerage model is not sustainable.” Corcoran’s Pam Liebman wisely asked how Compass is different? Reffkin responded by talking about Netflix and Blockbuster.
What she means to say: Where’s the tech? With unlimited resources, Compass has poached many brokers from competitors to accelerate growth. Simply incentivizing brokers to join by offering nice signing bonuses and higher commission splits is not disruptive. Consolidation is a nice strategy, but not a transformative one.
Wild valuation: Compass raised $400 million last month at an astounding $4.4 billion valuation. Some perspective… Realogy, which owns brokerages such as Coldwell Banker, the Corcoran Group, and Sotheby’s International Realty, has a market cap of $2.51 billion.