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Berkshire Hathaway chairman Warren Buffett© Kim Kyung Hoon / Reuters/Reuters

A new real estate franchise will launch in the United States next year, and the brand is backed not only by well-known asset management chief Bruce Flatt, but also the Oracle of Omaha himself: Warren Buffett.

The joint venture will be called Berkshire Hathaway HomeServices, and Toronto-based Brookfield Asset Management – of which Mr. Flatt is CEO – will provide part of the foundation for the business. HomeServices of America Inc., an affiliate of Mr. Buffett's conglomerate Berkshire Hathaway, calls itself the second-largest independent residential real estate brokerage firm in the U.S.

Financial terms of Tuesday's deal weren't revealed, but this is the first time Mr. Buffett's iconic conglomerate has given its name to a consumer brand.

To create this new brokerage, Berkshire Hathaway has purchased majority control in Prudential Real Estate and Real Living Real Estate from Brookfield. That amounts to a business a network of 53,000 agents across hundreds of locations in the U.S. who did more than $72-billion (U.S.) in residential real estate sales last year.

Brookfield's franchising and brokerage group, Brookfield Residential Property Services, bought Prudential Real Estate and Relocation Services from its parent company Prudential Financial Inc. in December.

But, much like the recent Bank of Nova Scotia purchase of ING Direct, Prudential franchises could only retain the brand name for a limited time under the licensing agreement. As a group, Brookfield Residential Property Services had more than 75,000 employees, doing over $150-billion of business in 2011.

It was when Brookfield went hunting for a new brand that it found HomeServices. Prudential's reputation as seller of high-end homes made it a good fit for Berkshire Hathaway's affiliate, which intends to build on this foundation to create a market-leading real estate brokerage brand in the U.S.

In 2009, Brookfield acquired a smaller group of about 2,000 real estate professionals called Real Living Network Services, which makes up the other part of the new brokerage. Brookfield will maintain a minority stake in the new business.

HomeServices already has 16,000 real estate agents under its banner at local brokerages in the U.S. Last year, associates closed more than $3-billion in home mortgages.

Independent brokerages owned by HomeServices won't be immediately forced into adopting the new brand name, but should make mention of their new ownership "by adding 'a Berkshire Hathaway affiliate' tagline to their real estate logo identity," a HomeServices spokesperson said.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
BAM-N
Brookfield Asset Management Ltd
+0.53%42.02
BAM-T
Brookfield Asset Management Ltd
+0.34%56.9
BNS-N
Bank of Nova Scotia
+1.21%51.78
BNS-T
Bank of Nova Scotia
+0.94%70.07
PRH-N
Prudential Financial 5.950% Notes
-0.31%25.65
PRU-N
Prudential Financial Inc
+0.32%117.4

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