Chicago Relocation
 

REUTERS – Prudential to exit real estate brokerage business

December 8, 2011

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John D’Ambrogio

That’s Rueters speaking, not me!

But that’s exactly what the respected news agency headquartered in NYC wrote this week.  The article - “Prudential to exit real estate brokerage business” says  that Canadian  Brookfield Residential Property Services has confirmed that it will acquire Prudential Financial Inc’s real estate brokerage as well as relocation services business for appoximately $110 million.

Brookfield Res. Chief Executive Graham Badun  ”We’re going to look to digest the acquisition and then look for some organic growth from that into new markets,”  according to the news service.

So what does that mean for Chicago relocation, and Chicago real estate in general?  Well, first of all, if transferees are in the process of being moved by what was once Pru Relo, it will now be handled by Brookfield’s relocation division.  As far as the brokerage brand, “FOR THE TIME BEING” it has been announced that the players will retain the Prudential name, although there is some confusion in the marketplace as to how long, under what terms, etc.  Particularly vexing is the problem of Pru offices carrying debt and how that will be factored in.

It was reported that Earl Lee will still lead the U.S. real estate piece, while Rick Schwartz, president of Brookfield Global Relocation Services, will head the  global relo services.  Prudential Financial’s (PRU.N) stock dropped 4.51% today.

There are a number of Chicagoland Prudential holdings, one of the largest being Prudential Starck in the NW suburbs, and Prudential Rubloff, which was acquired just two years ago by Michael Pierson and Chris Eigel.  Rubloff had been an independent boutique broker since 1930, and Starck had been a staple in the Chicagoland market for many years.  Chicago is home to many “tenured” real estate firms, including Koenig and Strey (now owned by HSA, but over 70 years old, and ironically, where the Prudential Rubloff owners originally started), and of course the veritable Baird & Warner, the nation’s oldest surviving real estate firm, established here in 1855.

So what does it mean?  Likely it means further consolidation of an already shrinking industry, and fewer players vying for today’s pie…

 

 

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