By Brian Louis
Sept. 1 (Bloomberg) -- The real estate brokerage controlled by Warren Buffett’s Berkshire Hathaway Inc. bought a Chicago- based agency, adding 900 agents to expand into the third-largest U.S. metropolitan area.
HomeServices of America Inc. acquired Koenig & Strey GMAC Real Estate from Brookfield Residential Property Services, according to a statement by HomeServices, which didn’t disclose the terms. HomeServices is the second-biggest U.S. residential brokerage after Apollo Management LP’s Realogy Corp.
“Koenig & Strey is a respected company, with an excellent reputation and long-term ties to the community,” Ron Peltier, chairman and chief executive officer of Minneapolis-based HomeServices, said in the statement. “We are delighted to be in Chicago, and continue to look for additional opportunities, both here and throughout other major markets in the United States.”
Falling home prices and a government tax credit for first- time buyers are bolstering demand for U.S. houses. New home sales gained more than forecast in July and sales of existing homes rose to the highest in almost two years.
Sales in the Chicago region rose less than 1 percent in July from a year earlier to 7,427, according to an Aug. 21 statement by the Illinois Association of Realtors. The median home price fell 16 percent to $213,500.
The Competition
Koenig & Strey is the 21st purchase for HomeServices, according to today’s statement. Founded in 1961, the company has 21 offices in the Chicago region.
Realogy, the Parsippany, New Jersey-based broker acquired by Apollo Management for $6.8 billion in 2007, last month reported a second-quarter loss of $15 million. Revenue from commissions fell 28 percent to $746 million and the average price of brokered home sale fell 15 percent to $188,489, Realogy said.
The company’s $1.7 billion of 10.5 percent notes due in 2014 rose 1 cent to 60.25 cents on the dollar to yield 26 percent at 12:29 p.m. New York time, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Realogy owns the Coldwell Banker and Century 21 brands.
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