Local real estate powerhouse RE/MAX Prestige has broken away from its former franchisor and re-branded itself as the independent brokerage Laer Realty Partners.
The new name is an acronym for “Local Agents, Extraordinary Results.”
The move will allow the brokerage to mount an aggressive expansion campaign, according to co-broker/owner Andrew Armata. The firm plans to announce the launch of several new offices, as well as an acquisition later this month, he said, though he declined to state the target of the merger.
“We’re building a company that is agent-focused. This was a decision that was in the best interest of our company. It was a decision we were forced to make and we’re excited about our future,” said Armata.
Eventually, Armata and his partner, Stacy Alcorn, want to expand the brokerage throughout New England, he said, and they’re planning to open offices in Boston as well.
“We’re not in Boston today, but it’s a key market area for us to grow into. We cover the whole state, from the North Shore all the way out to Springfield,” said Armata. “We’ll take this as far as we possibly can.”
The re-branding, announced last week, came as a surprise to the firm’s 250-plus agents, as well as its former franchisor, RE/MAX. RE/MAX, for its part, has indicated that it views the abrupt break as a contract breach and is considering legal action.
“We are disappointed that RE/MAX Prestige has elected to breach their franchise agreements and withdraw from the RE/MAX system and we are reviewing appropriate next steps in this matter,” Dan Breault, executive vice president and regional director of RE/MAX of New England, said in a statement.
As RE/MAX Prestige, the Chelmsford-based brokerage had evolved into a local powerhouse since being acquired by Alcorn and Armata in 2000. It was the highest-ranked Massachusetts firm on the RealTrend’s list of the top 500 U.S. brokers by transaction sides, coming in at 191 for the 2014 list.
RE/MAX Expansion Jeopardized
Friction over Alcorn and Armata’s desire to expand contributed to the break, Alcorn told Inman News. RE/MAX of New England, a sub-franchise of Denver-based RE/MAX International, is owned by Toronto-based Integra Enterprise Systems. Integra controls RE/MAX franchises in eight states, but has struggled to expand its market share in New England.
Integra announced its own regional expansion plans in July 2012, bringing on Breault, formerly head of the company’s Indiana franchises, to oversee the strategy. It has announced more than a half-dozen acquisitions and mergers in the subsequent 18 months.
But the departure of RE/MAX Prestige will strike a blow to those plans, presuming the firm’s agents elect to stay under the new Laer brand. As of 2012, according to data released by Integra, RE/MAX New England had more than 1,300 agents in Massachusetts. Though it’s unclear exactly how much RE/MAX’s recent acquisition have expanded that number, the 250-plus Prestige agents would account for an estimated 10 to 15 percent of the firm’s strength in the Bay State. (Laer also has an office in Pelham, N.H.)
Retaining those agents is RE/MAX’s top priority. “We are committed to working with the agents who wish to stay within the RE/MAX family,” Brealt said.
So far, however, Armata said that the vast majority of its agents were sticking with Laer. “We’re thrilled with the response,” he said “We’re going to maintain 90 percent of our company.”
The brokerage re-branding has been accompanied by the launch of a $1 million regional TV and radio marketing campaign, airing ads in Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire and Maine. The firm also plans a direct mail campaign in the areas in which it plans to open new offices, according to Armata.
“We’re taking a full-steam ahead approach to creating the brand,” he said.
The TV campaign will be a first for the company. A lackluster marketing effort from RE/MAX was one of the contributing factors driving the split, Armata said. “Even being the largest firm within the entire brand in New England, we don’t believe their marketing and advertising was sufficient,” he said.
Email: csullivan@thewarrengroup.com
