When you’re one of the chief executives of a real estate company that rockets in size from 139th to 6th in just a few years, you’re clearly doing something right. Or, actually, doing a lot right. Rick Haase, president of United Real Estate, agrees, while also stressing that it is a precise mindset that anchors one successful M&A deal after another. In an interview with RISMedia, he laid out the steps his company employs when considering having a brokerage come aboard.
Michael Catarevas: What’s one of the keys to making sure the brokerages who join add value to United?
Rick Haase: In decades of doing these transactions, if you’ve picked the right company or companies, and you’ve really gone after true gems in the real estate landscape, then you also get the intellectual capital and the passion of the people who built those companies. And we’ve been extremely fortunate in all of our mergers to bring into the company new ways of doing business and all of that entrepreneurship that created the companies to begin with.
MC: Tell us how your company’s activities have attracted talent that you’re now leveraging for an advantage.
RH: A lot of real estate companies that seek to acquire or merge with other companies have a core belief that their way is better than the merged company. And so you see a lot of companies that get acquired and over time the acquiring company does damage. The root of that damage comes from believing that they’re smarter than the people they acquired operationally.
So as a fundamental principle of why we’re successful and why the momentum continues is that we fundamentally do not believe that we’re smarter about how to operate in that market than the local operator. We learn as much from the companies that join us as they do from us after joining. One of the ways you do that is putting the principals into a seat in our company where they can really utilize their specialized strength and ability, only now across a national platform.
Everybody talks about profit and loss, and everybody likes to make mention of the top line and the bottom line growth associated with the potential of mergers and acquisitions, but one of the other real benefits is the fact that this is the passion of the entrepreneurs who joined through the mergers and acquisitions.
MC: Have you found that some of the strategies of acquired companies have been interesting enough for you to incorporate into the United system and have other United branches learn from them?
RH: It’s not happenstance. When we’re going through the mergers and acquisitions, we’re actively identifying these folks’ strengths and thinking about them as literally part of the transaction structure. And there’s an assigned value to what that person can bring to our company nationally, and we pay attention to it. It’s a systematic way of not only growing the size and footprint of our company, and the top and bottom lines of our company, but growing our leadership capabilities across the nation.
MC: I see that United executive vice presidents stay associated with running their brokerage, but also have moved into national corporate roles. How does that work?
RH: It’s critical that the organizations they built still see and feel them as the leaders. They have been in their companies all along, so they stay in those markets, they stay operationally in charge. In some cases we add a support person under them so that their additional duties on a national basis don’t take them too far away from their core operation, which has grown to depend and count on them for leadership.
MC: How selective is United when it comes to having brokerages join? Do you target specific companies, or do they come to you?
RH: A lot of companies would call it competition for acquiring companies. And for one reason or another, they didn’t choose our company or we didn’t choose them, or we bailed on the discussion because we didn’t like what we were hearing and seeing. A lot of other acquiring companies, on the day of the acquisition, rip the current brand off the acquired’s building, the signs and websites of their agents. They change the compensation plan and they pay the owners and tell them thanks a lot, see you later.
So they violate three rules, the first of which is that when you have a successful company, you don’t take the leadership out of it. If the owner wants to leave, you have to have a fairly long cycle of transitioning them out. The second thing is you don’t change the branding. And the third is you don’t mess with the agents’ commission splits unless it’s to improve them.
MC: Any other thoughts on growing the company and moving agents forward?
RH: I started as an agent and spent 10 years doing it, so I know that world. There are a couple of things that we really live by. One is that none of us are as smart as all of us. And that’s a fundamental principle. Fundamentally, we do not believe that we’re smarter about how to run an acquired company than they are. We don’t move in and try to change their ways. We show them options and let them pick and choose what they bring into the company. Even though we own it, they’re still the master of that company’s destiny.
MC: When you discuss a potential merger with a company, do they tell you if they’re also talking to other companies?
RH: Yes. In fact, we encourage that. If a company comes to us and says, we’re only talking to you, that’s not a great thing. We want them to see and feel what it would be like to join some of these other companies, so we encourage them to do that. In some cases, we even give them the contact information of these companies. It goes that far, really. When you’re proud of what you do and you believe it can stand up to any process that they’re comparing it to, then you want them to see the other guys.