In a time of significant market consolidations—Compass acquiring Anywhere, Keller Williams bringing on a private equity firm, Rocket Companies acquiring Redfin and more—Howard Hanna Real Estate Services is expanding its business with its entrance into the New York City market with the acquisition of Manhattan-based Elegran Real Estate, which claims around 150 agents.
The company announced the acquisition in a release today, characterizing it as “a powerful new chapter in the company’s continued growth along the East Coast.”
Howard W. “Hoby” Hanna IV, CEO of Howard Hanna, tells RISMedia the move came from a series of decisions since the brokerage’s entrance in New York state 10 years ago.
“In the last 10 years we’ve had a concentrated effort and growth throughout New York and the tristate New York metro area,” he says. “We had a strategy that we wanted to end up at the right strategic time and market coming into the city. Our strategy was an idea of surrounding the city in the suburban markets that feed the city.”
Hanna adds that one of the biggest indications that it was the “right strategic time and market” to expand into NYC centered around the fact that a lot of the business the brokerage was seeing in the surrounding areas was experiencing large amounts of referrals into the city. Also, Hanna said that many agents in NYC were reaching out to see if the company would be interested in entering the market, another strong signal.
Part of the strategy, as Hanna explained, was also finding the brokerage that was the right fit business- and culture-wise to acquire for an NYC expansion.
“We’ve been talking to probably 10 different brokerage firms in the city, and still are, and Elegran is the one that the timing hit right,” he says. “Their owner Mike Rossi over the last 11 years did a great job of growing an entrepreneurial business, attracting great agents with a lot of energy. I think the timing works really well for us today to build upon their footprint platform in the city and look at attracting other agents.”
Rossi said in a release that he “founded Elegran with a simple goal: to create a brokerage that truly puts its agents first. As the industry evolved, I recognized the value in joining a larger, more influential community. Howard Hanna was the obvious choice. This partnership gives our agents the scale, technology and marketing power to grow their business while maintaining the personal, client-first culture that has defined our success in the city.”
Addressing the consolidations that have ramped up across the industry, Hanna says that he thinks “over the next 18 months we’re going to see a lot of consolidation.”
He adds that many large brokerages and brands have to look to their shareholders and make moves to ensure profits for their benefit, while in Howard Hanna’s case as an independent brokerage, their position as a consolidator is purely for growth.
“For the last 20 years we’ve seen a tremendous amount of growth that’s been through acquisitions with like-minded independent brokerage firms or independent owners that were looking for a vehicle to grow and have helped us grow in their footprint,” Hanna says.
He adds that over the next 18 months, beyond the traditional consolidation among brokerage firms, “you might see some new players come to the market also looking at if there are platforms that they can build out.”
“Our industry is very fragmented, and there are still a lot of brokers. No matter how much consolidation you get with brokerage firms, there’s a tremendous amount of great firms with different models,” Hanna explains. “I do think what we’re seeing today is acquisition and integration that creates better organization and better systems, and a better organized business model.”
Deals like Rocket acquiring Redfin to break more into the brokerage space could become more common, according to Hanna.
With the advancement of technology and AI, Hanna says deals between brokerages and real estate tech companies may grow as well. Howard Hanna itself recently “made a capital investment” to work on its data organization and usage to better its business.
Howard Hanna intends on acquiring more brokerages in NYC and beyond, and, as Hanna puts it, making “bold moves today to set us up for success, not only today, but in the future.”
“We’re excited to be in the city and use it as a springboard to grow more. We’re also really bullish that we’re going to see, not only in Manhattan, but across our footprint, a great expansion and consolidation,” he says.
