© Copyright 2012. Compass Realty Systems, LLC
Consider this, too:
The TREBB lends itself to the perfect exit plan by utilizing a common "roll-up" strategy.
- A single, profitable real estate office can be worth up to 2.5 times its earnings or EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). Typically these offices are purchased and managed by a local agent or broker.
- Different from a single office, or even 3 or 4 offices, a chain of 30 or more profitable offices also provides significant sales volumes and market share and attracts corporate buyers. A group of profitable offices could be worth 5, 6, 7, or 8 times earnings… or more, as in Gundaker’s case.
With 30 offices, a likely buyer would be a corporate enterprise like NRT (a subsidiary of Realogy) that bought Gordon’s company. It could be a financial services or insurance company, like Prudential or Warren Buffett's Berkshire Hathaway.
Banding together multiple offices under common management umbrella is a proven way to sell the offices for many times what they may fetch individually — a unified exit plan.