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Bay Area's largest real-estate firm? It's a New York startup

Original post made on Mar 22, 2019

Compass, the venture-funded real-estate startup that launched its first office in the local market just over two years ago, became the Bay Area's largest residential brokerage firm this month after acquiring Peninsula powerhouse Alain Pinel Realtors for an undisclosed amount on March 9.

Read the full story here Web Link posted Thursday, March 21, 2019, 1:58 PM

Comments (12)

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Posted by Ja Broni
a resident of Green Acres
on Mar 22, 2019 at 8:33 am

But are they profitable?


13 people like this
Posted by Shameful
a resident of Another Palo Alto neighborhood
on Mar 22, 2019 at 7:13 pm

This is very interesting, especially considering how aggressively unfriendly the tax changes of 2018 were to individual homeowners in New York and the Bay Area, and how they advantage investors. I really did not see any intelligent analysis of this in the news but anyone who has a long view of the real estate market in these areas would have known what they were doing.

Given that tax law is social policy, I wonder why there isn't any lawsuits by states about this, because the difference in cost of living across the nation means just families in states with high cost of living (remember that thing called supply and demand) are being disadvantaged while people in the rest of the country AND real estate investors are being advantaged.

Lots of families were basically given the boot out of our houses in 2018, and the market responded predictably. This is egregious.

There is a lot of money at the very top globally now, and real estate is the favorite investment. People are such easy pickings already, the laws should not be enabling another shakedown of regular people to the advantage of the ruling class again.


3 people like this
Posted by Shameful
a resident of Another Palo Alto neighborhood
on Mar 22, 2019 at 9:16 pm

Wow. Web Link

The article draws a direct line between Reffkin and Trump.

Really, seriously, why has no one looked at the tax policy for whether it unduly benefitted the corrupt ones in office right now, especially since it so obviously did?


15 people like this
Posted by RE Agent
a resident of Portola Valley
on Mar 22, 2019 at 10:33 pm

It's a metrics-inspired RE conglomerate funded by venture capitalists & operated by Millennial-aged MBA types.

It will be interesting as older RE agents will now have to be aligning themselves with an entirely new business model...one that may fly or come crashing down in flames.

The RE 'gold rush' in the midpenisula is fading as home prices are exceeding realistic earning capacities. Home ownership & mortgages combined with the respective property taxes now amounts to a lifetime rental opportunity.

Only the wealthy homebuyers from Asia can escape this bear trap as many already have the liquid resources to pay CASH & the purchase then becomes a done deal. Others will not be as fortunate & I suspect this company will be focusing on this factor/consideration. It will take imagination & creativity which could also prove to be its downfall as Millennials have a different mindset than their generational predecessors.

I'm getting the hell out of the RE business before being branded a RE dinosaur at 42. Besides, no one likes taking orders/directives from a bunch of pip squeaks & I suspect this new organization is going to be very cult-like with a reflecive corporate culture of its own....think Google, Facebook, Apple et al.

Be a clone or walk alone. I'm taking the high road out.



4 people like this
Posted by Chip
a resident of Professorville
on Mar 22, 2019 at 11:16 pm

Michael Repka from Deleon, amother New Yorker, says it's a "conflict of interest" for one brokerage to handle both sids of a transaction?? This is what Deleon is known for doing. Pot, meet kettle. Why is it bad for others to do what Deleon prides itself on doing?


Like this comment
Posted by Anonymous
a resident of Duveneck/St. Francis
on Mar 23, 2019 at 11:30 pm

A big deal was made out of their “tech” or app - what’s the special aspect - as opposed to the mls or zillow, etc. Thanks for educating me.


2 people like this
Posted by Palo Alto Resident
a resident of Downtown North
on Mar 24, 2019 at 10:26 am

Think that there is always a greater risk of corruption when a player has a monopoly in a market as power gets more centralized into the hands of one single player. Healthy competition is a good thing. It's a shame Alain Pinel RE has been acquired by Compass. In the end he likely was offered too much money to turn down. I'm just shaking my head.


15 people like this
Posted by Kids Today (As in 30-Somethings)
a resident of Woodside
on Mar 24, 2019 at 2:25 pm

> It's a metrics-inspired RE conglomerate funded by venture capitalists & operated by Millennial-aged MBA types...one that may fly or come crashing down in flames.

>...home prices are exceeding realistic earning capacities. Home ownership & mortgages combined with the respective property taxes now amounts to a lifetime rental opportunity.

Being a Millennial-based corporation & taking Millennial housing concerns into serious consideration, watch for 'creative ways' of getting people into the homes they desire but cannot afford. Metrics will pave the way for the delusion.

Deja vu...as in the bank/mortgage crash a few years back.


Like this comment
Posted by chris
a resident of University South
on Mar 25, 2019 at 11:13 am

Tax law and policy is set by Congress and the President. If you don’t like it, you need to vote in new ones. The Supreme Court is not going to do it for you.


9 people like this
Posted by Millennial Bliss...Not
a resident of Barron Park
on Mar 25, 2019 at 12:49 pm

> Being a Millennial-based corporation & taking Millennial housing concerns into serious consideration, watch for 'creative ways' of getting people into the homes they desire but cannot afford. Metrics will pave the way for the delusion.

It will probably involve a 'Big Brother' TV show sort of cohabitation.

Individual resources collected to live in a perpetual state of 20-something melodrama/deluded bliss...in a nice house with all of the amenities except cohesive personalities. this is already being done with rental properties.

Creative financing is very appealing to those who cannot see the 'big picture'. That is how America falls into periodic recessions...marginal investments.


1 person likes this
Posted by Member
a resident of another community
on Mar 29, 2019 at 5:58 pm

From all I can tell, Compass seems to be another pump and dump scheme using the real estate space as a venue. They are currently funded by Softbank's Vision Fund, which has a 45% ownership by the Saudi's Sovereign Wealth Fund, and their most recent fundraising included the Qatari Sovereign Wealth Fund. Here is how I think this will play out...

Compass rolls into town and gobbles up as many agents and brokerages as they can to show crazy growth and revenue. They are giving agents sweetheart deals that make no financial sense to them as a traditional brokerage in an effort to get all of these agents selling their clients "ancillary services." If you work with a Compass agent, I would be sensitive to your data being stored and secured properly.

Once they hit their target revenue numbers with no profits, they continue to tell the story that they are a technology company, and they try to flip into an IPO. Once they IPO, the founders get rich, the Saudi & Qatari Governments get rich, Softbank gets rich, and then a shell of a company is left. Once this happens, all of the sweetheart deals will go away for agents, and they will scatter to newly formed or existing locally owned brokerages. This has happened before. The next recession will do them in, and it is a race to IPO before that happens. Get your popcorn, people, this will be fun to watch!!!


Like this comment
Posted by Same Old Story
a resident of Duveneck/St. Francis
on Mar 30, 2019 at 8:27 am

^^^^ Boycott Compass & this 'get rich quick' scheme!

> I suspect this new organization is going to be very cult-like with a reflective corporate culture of its own....
> Creative financing is very appealing to those who cannot see the 'big picture'. That is how America falls into periodic recessions...marginal investments.


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