In a move that shakes up the real estate sales landscape, two major brokerages have come together in a merger. Will their agents see the value in the decision?
With an eye toward capitalizing on spillover growth from the Tampa Bay region, two of the Gulf Coast’s leading real estate brokerages have teamed up via merger.
The deal, which closed April 2 and whose financial terms were undisclosed, brings together Sarasota-based RE/MAX Alliance Group and Tampa-based RE/MAX Bay to Bay. The combined brokerage will adopt the RE/MAX Alliance name and boast 11 offices and nearly 350 agents who, in 2018, were collectively responsible for $1.4 billion in real estate sales. RE/MAX Alliance posted $32.4 million in revenue in 2018, while RE/MAX Bay to Bay had $5.88 million.
“I feel it’s the right decision,” says RE/MAX Bay to Bay leader James Ramos, who will retain an ownership stake in the merged company but relinquish his role as CEO. “I see the bridge between Sarasota and Tampa closing, with all of the development in south Hillsborough all the way to Sarasota County.”
“We were looking for the best market for growth, and Tampa is growing like crazy. It’s a natural fit for us.” Ron Travis, co-owner of RE/MAX Alliance Group
The move is a calculated risk for Ramos, who over the past eight years has built a comprehensive real estate sales, construction and design firm called Ramos Companies, of which RE/MAX Bay to Bay was a key cog. But he says the merger was driven by the needs of agents and consumers, and harder than selling it could be the idea of stepping back from it.
“The number one challenge,” he says, “is relinquishing the direct connection to the impact I would be able to generate for the organization.”
In RE/MAX Alliance co-owners Peter Crowley and Ron Travis, however, Ramos has found partners with experience in creating a productive team of rivals. For years, Crowley and Travis ran competing RE/MAX brokerages in the Sarasota/Manatee region, but joined forces in 2008 as the real estate market spiraled downward.
“When we merged in 2008, we were strong RE/MAX competitors and were sensitive to the fact that it had to make sense for the agents,” Crowley says. “In any real estate brokerage, the most important assets are the agents, and the risk is that they won’t value why we are coming together."
Crowley says little will change for RE/MAX Alliance agents as a result of the latest merger, and because of the additional services offered by Ramos Professionals Group, agents and their clients will have access to in-house legal, lending and insurance professionals. RE/MAX Bay to Bay agents, meanwhile, will benefit from Alliance’s in-house marketing team and dominant position in the marketplace.
“He who controls the listings controls the market,” says Travis, a third-generation Florida Realtor who bought his first RE/MAX brokerage in 1992. “We were looking for the best market for growth, and Tampa is growing like crazy. It’s a natural fit for us.”
Travis says there will be no staff reductions as a result of the merger. “We are not going to unwind what Bay to Bay is,” he says. “We’re just adding the Alliance layer on top of it.”
Ramos, he adds, will take on a big-picture, strategic role. Travis sees him focusing on growth through further mergers and acquisitions. “He is going to help us grow the company and we will look to him for leadership,” Travis says.
Organic growth — or lack thereof — was another motivating factor for Ramos to do the deal. The strength of the Tampa Bay market, he says, made it difficult to add individual agents to his brokerage, so he told RE/MAX CEO Adam Contos, who wrote the foreword to Ramos’s book, “Move With Me,” he sought a merger.
Contos gave the union his blessing. The RE/MAX corporate leader says Ramos, who left a promising career with PepsiCo to pursue his entrepreneurial dreams, is “a cultivator of value” who possesses a deep understanding of the downward pressure on profitability in real estate.
Consumers, Contos writes in Ramos's book, “want more value from the agent but want to pay him or her less. The agent wants more service from the broker but wants to pay less. It is up to the brokers to maximize their value for their agents. James is an expert at that.”
One more factor in the merger? Off-loading his real estate sales management duties will let Ramos focus more on the design, renovation, construction and asset management arms of Ramos Companies.
“I’m a generalist,” Ramos says, “kind of like the general manager of a baseball team. I put people in place when and where they need to be. So it’s really exciting for me to have more time for what I originally left corporate America to do.”