Warren Buffet: Prudential California Realty, Irvine / Berkshire Hathaway

Irvine to be HQ of Warren Buffett real estate chain

October 30th, 2012, 3:52 pm · posted by Jeff Collins OC Register

Billionaire Warren Buffett is making a big move into retail home sales and is putting his company name on about 1,700 real estate offices across the United States.

Irvine will be the headquarters of this new real estate chain, called Berkshire Hathaway HomeServices, according to the terms of the deal announced Tuesday.

“I am confident that these partners will deliver value to the residential real estate industry, and I am pleased to have Berkshire Hathaway be a part of the new brand,” Buffett, chairman and CEO of Berkshire Hathaway Inc., said in a statement.

The new chain is the result of a partnership between Buffett’s HomeServices of America and Toronto-based Brookfield Asset Management, a global investor that owns 

the Real Living Real Estate chain and Irvine-based Prudential Real Estate.
Earl Lee, Prudential Real Estate’s president until Brookfield acquired the chain in December, will be the new company’s CEO.

A spokeswoman said Irvine will become the new chain’s headquarters because that’s where Prudential’s headquarters is located.

The existing HomeServices of America generated $32 billion in home sales in 2011, according to the company statement. HomeServices already owns local brokerages with 16,000 real estate agents in 21 states, The Associated Press said.

Buffett’s group will join forces with more than 53,000 Prudential and Real Living agents operating in more than 1,700 U.S. locations, the company statement said. The combined sales of Prudential and Real Living last year was $72 billion.

Details of the transaction weren’t disclosed, but AP said Berkshire Hathaway has a controlling interest in the joint venture and will run the new operation.

“There never has been the name Berkshire Hathaway used in real estate,” said David Cabot, president and CEO of the Berkshire Hathaway-owned Prudential California Realty chain based in San Diego, including 10 offices in Orange County.

“It changes the landscape of residential real estate in America to have a company with the integrity, longevity and stability of Berkshire Hathaway operating in real estate,” he said.

Cabot said his 62-office Prudential California Realty group, which operates from San Diego to central California, will likely begin using the new Berkshire Hathaway name in the winter of 2013.

Other Prudential franchisees will have the option to switch to the new name or can continue using their existing names until their franchise agreements expire, Cabot said. That includes broker Rich Cosner’s Prudential California Realty chain, which has five offices in Orange County and four in the Inland Empire.

Real Living Real Estate will continue to operate under its existing name, Cabot said.