Edina Realty is staking its first claim in South Dakota by acquiring Hegg Realtors, a Sioux Falls-based brokerage that's been in business for nearly 80 years.
Edina Realty enters South Dakota market with purchase of Hegg Realtors
Its parent company, HomeServices of America, also announced three other deals across the country.
January 11, 2022 at 11:04PM
The deal will add 200 agents to Edina's roster and give the company a foothold in a fast-growing market.
"We've always been looking to grow our footprint in larger regional markets like Sioux Falls," said Greg Mason, Edina Realty Home Services president and CEO. "The more we talked and got to know each other we knew it was a great fit for both companies."
The deal was announced on Tuesday morning shortly before Minneapolis-based HomeServices of America said it bought three additional out-of-state brokerages and a national moving company.
HomeServices, an affiliate of Berkshire Hathaway, is a holding company that includes Edina Realty and other brokerages in 33 states. In 2020, the company was the largest brokerage in the nation by transaction sides, but second to Realogy Holding Group, the owner of Coldwell Banker Realty, based on total sales volume, according to a 2021 brokerage report by RealTrends.
All five deals closed at the end of December and cap what was otherwise a humdrum year for brokerage consolidations and acquisitions. Terms were not disclosed.
Those new companies will add 1,400 sales associates, 15,000 transactions and nearly $8 billion in closed sales volume to HomeServices' 2021 portfolio.
The latest acquisitions include Bennion Deville Homes, which closed nearly 4,400 transactions and $3.1 billion in sales in the Coachella Valley in California; Berkshire Hathaway HomeServices Alliance Real Estate and Alliance Title Group, which had 4,000 transactions and $1.3 billion in sales in the St. Louis area, and Berkshire Hathaway HomeServices Beach Properties of Florida, which is based in Santa Rosa Beach and closed more than 2,700 transactions and had $2.1 billion in sales.
The acquisition of Joe Moholland Moving, which operates primarily in Virginia, Maryland, and the Washington, D.C., area but has an international presence, will enable HomeServices to strengthen what it calls a commitment to fulfilling a "customer-for-life" business model.
Increasingly, real estate brokerages have focused on offering affiliated services including title, mortgage and insurance in an effort to streamline the buying and selling process. Such offerings also create an additional revenue stream for real estate companies that have traditionally relied on a slice of an agent's sales commission and other fees.
HomeServices, which is based in downtown Minneapolis, has been steadily expanding its presence across the country, primarily through the acquisition of established, well-known local companies that have strong brand recognition. As is the case with Edina Realty's acquisition of Hegg Realtors, HomeServices usually retains the local branding and leadership.
After making only a couple of acquisitions earlier in 2021, the December deals will dramatically increase HomeService's presence across the U.S.
These transactions are the first local brokerage acquisition announcement of 2022 and it comes after a slow 2021 for such deals. Earlier in 2021, HomeServices announced the acquisition of Berkshire Hathaway HomeServices Hudson Valley Properties, which is based in LaGrangeville, N.Y. And in July the company said that it had acquired Americana Holdings, which operates in Arizona, California and Nevada.
Twin Cities-based Coldwell Banker Realty also had a middling 2021 for acquisition. In April, the company bought Real Services Inc., an independently owned affiliate of Coldwell Banker that had been known as Coldwell Banker East West Realty. That deal included 60 agents in seven offices in northern Minnesota and western Wisconsin.
Edina Realty' Mason said that he expects 2022 to be a busier year for acquisitions for his company and others.
"When you have a really good market for several years it gets onerous for many companies and they start looking for exit strategies," he said. "The challenges of running a brokerage during the last couple years has been a challenge for many smaller companies."
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