As he anticipates a housing market turnaround, legendary investor Warren Buffett has been buying up real-estate brokerages around the country. His recent partnering with the Canadian real-estate investor, Brookfield Asset Management will more than double the size of his brokerage business. Brookfield’s network has operated under the Prudential Real Estate and Real Living Real Estate brands.
The new company, Berkshire’s HomeServices of America Inc. plans to offer a new franchise brand, Berkshire Hathaway Home Services, starting next year. According to a statement on their website, the firm will become the majority owner of the venture to manage a U.S.residential real-estate affiliate network.
With the U.S. housing market recovery in mind, Berkshire’s managers have been positioning the firm to benefit the recovery. The Omaha, Nebraska-based company has bought a brickmaker, won the loan portfolio of bankrupt mortgage lender Residential Capital LLC at auction and built its HomeServices unit by agreeing to acquire real-estate brokerages in states including Oregon and Connecticut.
Combining Brokerages for Fianancial Strength
The press release says the brokerages that will make up the new company did a combined $72 billion in sales in 2011. That’s more than twice the $32 billion in sales that Berkshire did in 2011 without the new brokerages.
“Berkshire Hathaway HomeServices is a new franchise brand built upon the financial strength and leadership of Brookfield and HomeServices,” said Warren Buffett, chairman and CEO of Berkshire Hathaway Inc. “I am confident that these partners will deliver value to the residential real estate industry, and I am pleased to have Berkshire Hathaway be a part of the new brand.”
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