Coldwell Banker Residential Brokerage recently acquired Trust of New England in Worcester. With the acquisition, Coldwell Banker will have two offices in Worcester, including the one pictured here, which is located at 60 Shrewsbury St.
In a deal that expands its reach in Central Massachusetts and establishes it as more of a powerhouse in the region, Coldwell Banker Residential Brokerage has acquired one of Worcester’s largest and most productive real estate firms.
Coldwell Banker recently announced its purchase of Trust of New England, a company with 75 residential real estate sales associates and support staff that last year posted a total closed sales volume in excess of $180 million. The company, once an independently owned affiliate of GMAC Real Estate, has been a top market-share holder in the city of Worcester and has handled more than 20 percent of the dollar volume for single-family home sales in the city so far this year.
The acquisition means that Coldwell Banker, which already had an office in Worcester with 61 sales associates, will now have two offices and will snatch a significant market share in the Greater Worcester area – up to 28 percent, according to Coldwell’s estimates. The company also has offices in the Worcester County towns of Westborough, Shrewsbury, Bolton, Harvard and Leominster. By comparison, Coldwell Banker has more than twice as many offices in the MetroWest Boston region, including multiple offices in Concord, Lexington and Framingham.
The deal comes more than a year after Coldwell Banker Hunneman and The DeWolfe Cos. were merged last year to form Coldwell Banker Residential Brokerage. In the weeks after the DeWolfe and Hunneman deal were announced, Coldwell Banker Residential Brokerage continued its aggressive expansion by merging with independently owned affiliates in Western Massachusetts, Maine and Rhode Island. Today, the company has 133 offices with about 5,000 sales associates in Massachusetts, Maine, New Hampshire, Connecticut and Rhode Island. Coldwell Banker Residential Brokerage is a member NRT, a subsidiary of Cendant Corp., which is the nation’s largest residential real estate brokerage company.
This latest merger caught a few local Realtors by surprise. Trust of New England, established in 1984 by William Kelleher and Harold Sadowsky – two well-known, respected business leaders – has been a strong presence in Worcester because of the firm’s size and because it had done business in the city for nearly two decades, according to Worcester-area Realtors. Trust of New England previously had a franchise agreement with Better Homes and Gardens, part of GMAC Real Estate, which recently expired.
“It was a surprise for a number of people I’ve spoken to who are on the board,” said Carolyn Chodat, president of the Worcester Regional Association of Realtors. While most of the 75 agents are expected to remain with the company following the merger, Chodat said the acquisition means that “the playing field is not as diverse” in Worcester as it once was.
“They’re [Coldwell Banker] clearly buying market share,” said Judy Reynolds, broker-owner of Evergreen Realty, an independent real estate firm in nearby Sterling. “They’re after profitability. It’s [Trust of New England] a profitable company and it makes them a very desirable property to own. Although there is a Coldwell Banker [office] in Worcester, it did not have significant market share.”
Succession Plan
Trust of New England’s closest competitor in the city, Re/Max Advantage I in Worcester, had about 10 percent of the single-family home sale market share in the city so far this year, according to Reynolds, who cited information from the Multiple Listing Service-Property Information Network. Re/Max First Choice in Worcester had about 6 percent market share, while Coldwell Banker’s Worcester office located at 60 Shrewsbury St. held roughly 5 percent of the market share, she said.
With the acquisition, Coldwell Banker will be gaining dozens of top-producing agents – if they choose to remain.
“I think he [former Trust of New England owner Kelleher] has a number of top-producing, professional brokers and I think that’s a kudos to him that his company has attracted such quality brokers. They’ve done a really good job training them, which is always vital,” said Reynolds, whose company is a member of The Realty Guild, a group that represents more than 70 independent real estate companies in the Bay State.
Kelleher and Sadowsky will continue to manage the sales office located at 196 Park Ave. – a strategy that will likely help Coldwell Banker retain agents in the office. In an interview last week, Sadowsky said that agents and staff in the office have indicated that they will remain.
Sadowsky, who will be 69 in January, said he and partner Kelleher had been considering a merger for some time now because his children weren’t interested in coming into the real estate business. “The essential part of any business is one of succession,” said Sadowsky. With none of his children interested in succeeding him, the alternatives were “to die with your boots on or find a white knight that you were compatible with,” said Sadowsky.
The duo chose Coldwell Banker because they believe the two companies’ cultures meshed the best. Kelleher pointed out that the Coldwell Banker offices in other central Massachusetts communities “have a significant presence,” while Trust of New England, with its single residential real estate office, was strong in the city of Worcester, but not necessarily some of the surrounding towns.
“It was a very good fit from that perspective,” said Kelleher.
Kelleher also noted that Coldwell Banker’s management style and culture, and its concern and emphasis on the development and education of its agents, were “very compatible” with Trust of New England’s.
Sadowsky and Kelleher also own a commercial real estate company in Worcester, Kelleher & Sadowsky Assoc., which has eight employees. The commercial real estate company was not part of the sales deal with Coldwell Banker and will continue to be independently owned and operated.
The Shrewsbury Street Coldwell Banker office will remain at its present location under the management of Leif Rosseland, vice president of Coldwell Banker in central and southern New England.
“We are pleased to welcome the talented real estate professionals from Trust of New England into our organization,” said Rick Loughlin, president of Coldwell Banker in central and southern New England, in a prepared statement. “With Coldwell Banker Residential Brokerage’s expansive network residential real estate products and services partnered with the sales associates’ dedicated service and expert knowledge of the local market, Coldwell Banker Residential Brokerage will strengthen our competitive presence in that area.”
With any type of merger this scale, however, there are bound to be some agents who leave to join other companies, according to longtime Realtors.
“Real estate offices are constantly changing, and it’s hard to predict what’s going to happen,” said Marjorie Yale, broker-owner of ComVest Realty Service in Northborough. “A lot of it depends on the company taking over. It [staffing changes] might not happen right away.”
The deal came several weeks into a new advertising and marketing campaign that was launched by Coldwell Banker in mid-October. The “It’s About Life” ad campaign features a four-week radio campaign and the mailing of post cards to roughly 1 million homes throughout Massachusetts, Maine, New Hampshire and Rhode Island between October and January.
While companies like Coldwell Banker have more agents and are grabbing more of the market share, owners of independent real estate firms, like Reynolds, say that companies that aren’t part of large franchises can compete.
For example, Reynolds and Jim Kelleher, broker-owner of another independent real estate company, point out that real estate agents in independent companies often handle more real estate sales transactions individually than agents who work for large franchises – an attractive proposition for an experienced top-producing agent.
“When you look at the productivity of agents in Coldwell Banker, their productivity per agent is very low compared to independent offices,” said Reynolds. “Because they have so many people, their ability to produce as an agent is significantly less than the independents.”
Often there is the perception that real estate franchises are bigger and better, having the resources to hire more agents and do more aggressive advertising, according to Kelleher. But in an industry where the motto “real estate is local” is commonly used, independent companies with agents that know communities well succeed, said Kelleher.
Reynolds believes that’s particularly true in the smaller communities and suburbs of Worcester where there are several independent companies that do well because consumers like Realtors who live in the community and know all about the town’s schools, shops and character.
“That’s why independents tend to do better in smaller communities,” said Reynolds.
“As an independent … they [consumers] can get more personal service from us,” added Kelleher, who owns Noonan Real Estate in Mendon.
