Latter & Blum has been in independent business for more than 100 years and today has more than 3,100 agents. The deal gives Compass its first entry into Louisiana and Mississippi.
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An uncertain market and a changing outlook aren’t keeping Compass down, as the brokerage announced Wednesday that it now enters two new states with the acquisition of Gulf Coast giant Latter & Blum.
The acquisition brings Compass to Latter & Blum’s headquarters in New Orleans and surrounding areas in Louisiana and Mississippi. In a statement Wednesday, Compass described Latter & Blum as a “boutique brokerage with more than 100 years of history” and the No. 1 firm of its kind on the Gulf Coast. The statement also noted that Latter & Blum agency sales last year reached $3.6 billion.
According to the latter and Bloom websitethe company has more than 3,100 agents working in 32 different offices.
Robert Revkin
Compass CEO Robert Reffkin expressed excitement Wednesday, noting that the acquisition means his company “will now have a solid presence on the Gulf Coast from Texas to Florida to provide our agents with More transaction opportunities and better service to customers.”
The companies did not publicly disclose financial details of the acquisition. The two companies will initially co-brand, but will eventually transition to operating entirely under the Compass umbrella.
The acquisition is a major strategic move for Compass. While the firm has long been known for being highly proactive in recruiting and acquisitions, many of its recent announcements have tended to focus on high-profile individuals and teams defecting from other firms, or independent brokerages much smaller than Latter & Blum.
On the other hand, the acquisition of Latter & Blum is more like Compass’s acquisition of Pacific Union in 2018, which caused a shock in the industry. Pacific Union had $14 billion in sales at the time of the acquisition, more than Latter & Blum does today (Pacific Union operates in expensive California), but it had only about 1,700 agents.
That means the size of the Latter & Blum acquisition may be more significant than the Pacific Union deal in terms of headcount.
In the fourth quarter of last year, Compass had an average of 14,689 prime agents, according to the company’s latest earnings report. This means that if all 3,100 Latter & Blum agents switched to Compass, the brokerage’s headcount would increase by 21% – of course, some Latter & Blum agents may not choose to convert, or may not be classified For prime brokers if agents do jump to Compass.
Regardless, the deal represents an atypical infusion of new blood into Compass: Also in the fourth quarter, the company’s key agent headcount increased 7.7% year-over-year, meaning a headcount increase of 21% or close to that. One number would be a huge increase. There are significant anomalies compared to recent growth.
Other historically fast-growing companies, such as eXp Realty, have also seen their headcount effectively stagnate, meaning Compass’s sudden growth will also be an industry-wide anomaly.
The acquisition also comes at a time when the real estate industry is going through difficult times. Rising mortgage rates in 2022 and 2023 reduce the total number of U.S. home transactions, which in turn leads to a decline in the number of real estate agents.
Against this backdrop, a series of commission lawsuits threaten to upend the way agents are compensated. Just a week and a half ago, Compass presented a proposed settlement for its share of these lawsuits, but as the new acquisition demonstrates, it’s clearly not letting the uncertainty of the current real estate market hinder growth.
Lacey Merrick Conway, CEO, Latter & Blum
Following the acquisition, Latter & Blum Chairman Robert Merrick and Chief Executive Officer Lacey Merrick Conway will remain with the company to manage operations in the region. In a statement on Wednesday, Merrick Conway described the company’s mission as “creating life-changing opportunities and meaningful careers for agents.”
“This partnership reinforces our commitment,” she added, “to provide our agents and local communities with an extensive referral network and cutting-edge tools to drive the industry forward while maintaining our local culture and expertise. Knowledge.”
Email Jim Dalrymple II
