KATE ROSSI STARTED SELLING HOUSES 22 YEARS AGO IN PITTSBURGH because she had a two-year-old daughter and needed a part-time job with flexibility and a decent paycheck. She sold 72 homes her first year -- far more than many full-time real estate veterans. Rossi now heads up Coldwell Banker Residential Brokerage of Colorado, the state's largest residential real estate company. With 2,200 agents and 28 offices along the Front Range, Coldwell Banker is more than triple the size of its next largest competitor, RE/MAX Alliance, which has about 625 agents and 15 offices --
HARDLY A MOM-AND-POP OPERATION.
Both companies are examples of how Colorado real estate, while still relatively fragmented, is following the national trend toward industry consolidation.
"Business has boomed in the last few years, but profit margins are shrinking, primarily as the result of increased costs associated with technology and advertising," said Steve Murray, president of RealTrends, a Littleton based consulting firm that publishes a newsletter on real estate mergers and acquisitions. "Brokerage firms have either had to get bigger to take advantage of economy-of-scale or get smaller. We've seen more merger and acquisition activity in the last five years than we did in the previous 20."
The consolidation trend was well under way in 1998, when Coldwell Banker Residential Brokerage's parent, NRT, based in Parsippany, N.J., entered the Colorado market. It bought Coldwell Banker Premier Van Schaack, Moore & Co. and the Devonshire Co. By August 2000, when Rossi arrived in Colorado to run the firm, Coldwell Banker of Colorado had 564 agents and 11 offices. Since then, she's overseen several significant acquisitions, including: Perry & Butler, Frontier Real Estate GMAC, and Fort Collins-based Everitt & Williams.
Rossi makes no apologies for her firm's size.
"If I'm going to go to war, I want to be the biggest," she said, adopting a Gulf War rather than an Afghan strategy.
Like many real estate professionals, Rossi says her business has very little to do with real estate, and everything to do with people - buyers and sellers. Real estate companies succeed by attracting successful agents, who in turn attract home sellers and buyers. During Colorado's recent real estate boom, almost anyone capable of banging in a yard sign could sell your home for an attractive price. In today's more 'realistic" market, selling a home requires more expertise and marketing clout, Rossi said.