Compass acquires 3,100-agent Gulf Coast giant Latter & Blum

Austin Luxury Group|April 3, 2024
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An uncertain market and a horizon filled with change haven’t kept Compass down, with the brokerage announcing Wednesday that it’s now entering two new states via the acquisition of Gulf Coast giant Latter & Blum.

The acquisition brings Compass to Latter & Blum’s home base of New Orleans, as well as the surrounding regions of Louisiana and Mississippi. In a statement Wednesday, Compass described Latter & Blum as a “100+-year-old boutique brokerage” and the number one company of its kind on the Gulf Coast. The statement additionally notes that Latter & Blum agents closed $3.6 billion in sales last year.

According to Latter & Blum’s website, the firm has more than 3,100 agents working in 32 different offices.

Compass CEO Robert Reffkin expressed excitement Wednesday, noting that the acquisition means his company “will now have a firm presence across the Gulf Coast, from Texas to Florida, providing more opportunities for our agents to transact and better serve their clients.”

The companies did not publicly disclose financial details of the acquisition. The two companies will initially use co-branding, but will eventually transition to operate entirely under the Compass banner.

The acquisition represents a major strategic move for Compass. Though the company has long been known for highly proactive recruiting and acquisitions, many of its most recent announcements have tended to focus on big names and teams who defected from other firms, or on indie brokerages that were much smaller than Latter & Blum.

On the other hand, the acquisition of Latter & Blum is more akin to Compass’ 2018 acquisition of Pacific Union, which sent shockwaves through the industry at the time. Pacific Union’s $14 billion in sales volume at the time it was acquired was larger than Latter & Blum’s today — Pacific Union operated in pricey California — but it only had about 1,700 agents.

That means by headcount, the Latter & Blum acquisition is potentially more significant than the Pacific Union deal.

During the fourth quarter of last year, Compass had an average of 14,689 principal agents, according to the company’s latest earnings report. That means if all 3,100 Latter & Blum agents make the move to Compass, the brokerage’s headcount would jump by 21 percent — though, of course, it’s possible some Latter & Blum agents may not opt to make the transition or may not be classified as principal agents if they do jump to Compass.

Either way, though, the deal represents an atypically huge infusion of new blood for Compass: Also in Q4, the company increased its principal agent count year over year by 7.7 percent — meaning a 21 percent jump in headcount or anything near it will be a significant outlier relative to recent growth.

Other companies that have historically grown quickly, such as eXp Realty, have also seen their headcount numbers effectively stall out, meaning Compass’ sudden growth will be an outlier for the broader industry as well.

The acquisition additionally comes during something of a rough patch for the real estate business. Rising mortgage rates in 2022 and 2023 reduced the total number of home transactions taking place in the U.S., which in turn led to falling numbers of Realtors.

Against that backdrop, a slew of commission lawsuits have threaten to upend the way agents get paid. Compass filed a proposed settlement for its part in those lawsuits just a week and a half ago — but has clearly not let the uncertainty currently swirling around the housing market get in the way of growth, as the new acquisition shows.

Following the acquisition, Latter & Blum Chairman Robert Merrick and CEO Lacey Merrick Conway will remain with the company to manage operations in the region. In Wednesday’s statement, Merrick Conway described her company’s mission as “creating life-changing opportunities and meaningful careers for agents.”

“This partnership enhances our commitment,” she added, “providing our agents and the local community access to an expansive referral network and cutting-edge tools driving the industry forward while maintaining our local culture and expertise.”



Original Article by: JIM DALRYMPLE II, Inman