Coldwell Banker acquires Strada

Alicia Robinson

One of the nation’s largest residential real estate brokerage firms,

Coldwell Banker, is acquiring Newport-based Strada Properties, an

upstart realty firm that used high-tech tools and brand marketing to

take the Orange County coast by storm over the last three years, the

companies announced Tuesday.

The cost of the merger was not disclosed, but the two companies

together reported $5.5 billion in sales in the last 12 months. Strada

was responsible for sales equaling $1.6 billion of that total.

Founded in 2000 with seven employees, Strada has grown to include

225 employees in two offices in Newport Beach and Laguna Beach.

Coldwell Banker employs 750 agents in 15 offices in Orange County.

“The benefit to each of the companies is that we’re bringing

together the two premier names in Orange County real estate,” said

Peter Hernandez, president of Orange County residential brokerage for

Coldwell Banker.

The companies will combine their marketing programs to address

better a real estate market that has become more sophisticated, he

said.

“Clients out there are expecting a lot more of us and we want to

deliver that,” Strada Properties President Steve High said. High will

become executive vice president of the combined company.

“With real estate today we’re selling houses in the over

$1-million price range and it is a consumer luxury good,” High said.

“I think the marketing and advertising strategy now is about creating

a brand identity.”

Strada led that trend by creating an in-house advertising agency,

and the firm was among the first to use computers to get out

information to agents as quickly as possible, he said.

Hernandez said Strada’s use of technology and marketing attracted

his company to the firm.

The merger is an example of the ongoing consolidation of what was

a very fragmented industry, said G. Christopher Davis, director of

the real estate management program in UC Irvine’s Graduate School of

Management.

In the past, a single broker would run a small office with one or

two employees, Davis said.

“That’s really sort of gone by the wayside,” he said. “There’s not

a lot of those kinds of people left anymore, and I don’t think the

consumer is hurt by that.”

There hasn’t been a significant increase in commissions, and real

estate brokers still basically operate like individual entrepreneurs,

he said.

The merger may benefit Strada’s brokers because they can reach a

larger geographic area as part of Coldwell Banker, while Coldwell

Banker absorbs the growth of Strada, Davis said.

“If you’re a publicly held company, Wall Street embraces growth,”

he said.

Both Hernandez and High expect more growth for their combined

firm. In 2002 Orange County saw the largest housing market in its

history and 2003 figures probably will outdo that, High said.

“We should probably be in for another extraordinary year in real

estate [in 2004], one that is probably going to have double digit

appreciation like this year and one that is probably going to have

large sales volume as well,” he said.

* ALICIA ROBINSON covers business, politics and the environment.

She can be reached at (949) 764-4330 or by e-mail at

[email protected].