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Expect more real estate brokerage consolidations over the course of 2024 if last year’s activity is any indication.

As a result of record lows of home sales across Massachusetts, local residential brokerages continue to struggle with lower commission-driven revenues, forcing many smaller firms to cut back on the number of agents they employ or even close shop.

Another option for the hard-pressed: Sell out to – or affiliate with – larger firms.

And that’s exactly what happened last year across the region, as some larger brokerages got bigger by gobbling up smaller firms.

Anthony Lamacchia, the broker-owner and CEO of the fast-growing Lamacchia Realty, said current market conditions – with higher interest rates and historically low inventories of homes for sale – are especially tough on smaller residential brokerages.

But the same market conditions also make it ripe for larger firms, like Lamacchia’s, to expand via acquisitions, he said.

‘We Want to Be the Biggest’

Last year, Lamacchia Realty acquired three brokerage firms in Massachusetts: Foley Real Estate in Falmouth; Keystone Property Group in Seekonk; and Right Choice Real Estate in Fall River.

The three firms’ 100 agents mean there are now 550 agents now under the Lamacchia Realty umbrella.

BHHS Robert Paul Properties also bought a notable South Coast brokerage last year shortly before Lamacchia’s acquisition: the 28-agent BHHS Mel Antonio Real Estate in New Bedford.

In a YouTube video announcing the Right Choice deal in July, Ron Rusin, the former co-owner of Right Choice, said he and his wife Dawn had “a lot of sleepless nights” leading up to the summer sale of their firm.

“It was a very challenging time, there’s no doubt,” he said.

Though he could have just walked away from the business, Rusin said in the video he ultimately wanted to make sure his “agents were taken care of” via new ownership of the firm.

In particular, he said he was impressed with the technology, training and other services provided to agents at Lamacchia.

Anthony Lamacchia said that’s exactly what his firm offers small-firm owners burdened with high operating costs at a time of dwindling revenue: high-quality back-office services, which at Lamacchia Realty also include marketing, research and lead-generation support for agents.

“When we buy firms, we want to grow them,” Lamacchia said, adding he ideally prefers acquiring established and respected firms that have “been around for generations.”

He said he doesn’t see the market changing much through the rest of 2024 – and therefore the conditions for acquiring firms will remain strong.

“The market will be a little better, but not by much,” he said. “We’ve been waiting for opportunities like this for a while.”

As for the future beyond 2024?

“We want to have thousands of agents and be the biggest [real estate firm] in New England,” he said.

Some of the residential brokerages that bought competitors in 2023 are looking for more deals this year as they see continued opportunity to grow their market share with acquisitions in 2024. iStock illustration

No ‘Growth for Growth’s Sake’

By contrast, Larry Rideout, chairman and co-founder of Gibson Sotheby’s International Realty, said he thinks his firm is approaching its limit when it comes to aggressive acquisitions.

Gibson Sotheby’s did acquire two offices in Newburyport last year, both of which also have licenses to operate in New Hampshire.

In January, the firm also acquired Pat Shultz Real Estate in Provincetown and Unlimited Sotheby’s International Realty covering Brookline, Newton and Jamaica Plain.

The four deals added about 75 agents to the firm’s roster, bringing its total agent count to 490 in the region.

“They’ve increased our market share considerably,” Rideout said of the recent takeovers.

In all, Gibson Sotheby’s has been involved in 18 acquisitions since 2006.

Rideout described the 2023 and current market conditions as “moments for opportunities” for firms interested in expanding through acquisitions.

But he said he’s not sure how many more firms Gibson Sotheby’s might acquire.

He didn’t rule out future takeovers. He noted future takeovers need to provide the right cultural and geographic fit for both sides.

But he added, “We’re pretty much where we want to be now. … We’re not in it for growth for growth’s sake.”

As for the rest of 2024, he said he’s hoping for more inventory of homes for sale.

“But everything depends on interest rates and whether they come down,” he said.

A Different Approach to Expansion

Linda O’Koniewski, CEO of Melrose-based Leading Edge Real Estate, has taken a different approach towards teaming up with smaller firms.

Instead of outright acquisitions, Leading Edge prefers creating strategic affiliations with residential real-estate firms, offering them a number of back-office services – including technology, training, compliance and lead-generation support – in exchange for agreed-upon payments.

“It’s the best way for us to grow,” she said of her firm’s affiliation strategy. “It’s kind of a turnkey operation … All of the financials [of running an office] are taken care of by us. We pick up the back-office things.”

Leading Edge secured only one affiliation last year, but the new Beverly addition was critical to Leading Edge’s regional strategy.

“Now we have a North Shore presence,” O’Koniewski said.

So far this year, Leading Edge has secured an affiliation deal with an unspecified agent in Eastern Massachusetts, bringing its total affiliated agents to 141, up from 117 agents only a few years ago.

O’Koniewski’s goal over the next few years: About 200 affiliated agents.

“We’re taking [expansion] in a new direction,” she said of affiliations rather than acquisitions. “It expands our footprint and attracts new agents.”

As for market conditions, she said she believes home sales will probably increase in 2024, but not significantly so.

As a result, she sees more affiliation opportunities over coming months.

“The market is tough right now. It’s tougher for smaller firms,” she said.