Compass to acquire Anywhere, creating world’s largest brokerage 

In a major acquisition move that will forever change the residential real estate industry, Compass announced on Sept. 22 that it has entered into an agreement to acquire key rival Anywhere Real Estate in an all-stock transaction.

Forming a residential mega-brokerage

In the company's announcement of the deal, Compass said that the merged residential brokerage giant would have a combined value of approximately $10 billion. The Wall Street Journal, which first reported on the news, estimates the value of the all-stock acquisition of Anywhere to be around $1.6 billion. 

Anywhere's portfolio includes well-known franchise and brokerage brands such as Coldwell Banker, Century 21, Corcoran Group, Sotheby's International Realty and Better Homes and Gardens Real Estate. During Anywhere's July earnings announcement, the company indicated that it had "more than 300,000 affiliated agents globally," and posted a revenue of $1.7 billion.

The merged companies will create by far the largest residential real estate brokerage company in the world, representing nearly 340,000 real estate professionals servicing roughly 120 countries and territories, Compass said in the announcement. 

"We have a unique opportunity to utilize the incredible breadth of talent across our companies, especially our world-class agents and franchisees, to deliver even more value to home buyers and home sellers across every phase of the home buying and home selling experience," Anywhere CEO Ryan Schneider said in the announcement.

Doubling down on luxury real estate

Compass CEO Robert Reffkin described the move as a "monumental step" towards Compass' mission "to empower real estate professionals with everything they need to grow their business and better serve their clients." Reffkin also noted that Compass plans to preserve "the unique independence of Anywhere's leading brands."

Despite the stubbornly sluggish sales market in the last couple of years, Anywhere CEO Ryan Schneider had repeatedly highlighted the strength of its luxury-focused brokerages — Sotheby's and Corcoran — as key sales volume drivers to investors during a number of earnings calls. Compass is also a major player in the luxury space, and has made other moves to tighten its grip on the upscale market. 

Earlier this year, Compass closed on the acquisition of @properties and Christie's International Real Estate. Additionally, Compass acquired Tennessee's Parks Real Estate and Latter + Blum in New Orleans last year, giving it significant market share in each region.

More private exclusives?

Compass has spent the last year retooling its brokerage strategy and many of its digital platforms to focus on its 3-phase marketing strategy and private exclusives effort. But despite Compass' commitment to "seller choice" and off-MLS listings, Schneider has repeatedly told investors — and the broader industry — that he does not recommend that Anywhere and others go that route. However, during July's earnings call, Schneider said that the company was prepared to "turn on private listings" for agents and sellers "if the market goes that way."

There is certainly a chance that Anywhere execs and agents change their tune on private exclusives post-acquisition. Months after being acquired, @properties co-founders began to echo Compass' messaging on the benefits of private listings and developed its own "private-to-prominent" listing strategy. And a combined Compass and Anywhere may have enough momentum and sheer brute force to push the industry towards a future where inventory is used competitively. 

A coordinated push to private listings from the industry's largest brokerages could "represent a very serious threat to a free market and a transparent market," a prominent consumer advocate told Real Estate News in August. And a future where the major brokerages have market dominance would likely also threaten small brokerages and independents.