The name Berkshire Hathaway, synonymous with business icon Warren Buffett, is positioned to become a well-known residential real estate brand here following Buffett's purchase Oct. 26 of one of the country's largest real estate brokerage networks.
Omaha-based Berkshire Hathaway Inc., through its HomeServices of America unit, bought a majority stake in the Prudential and Real Living real estate franchises from Brookfield Asset Management and announced it will begin converting agencies to the new Berkshire Hathaway HomeServices brand next year.
Locally, the deal will affect two of the city's 25 largest brokerages: Prudential Indiana Realty Group, the city's second-largest with more than 300 Indianapolis-area agents; and Real Living Realty Partners, the smallest agency on the list.
Prudential Indiana, which has 14 offices and 450 agents from Lafayette to Evansville, was started in 1980 as Century 21 Realty Group One by Kevin Kirkpatrick and John Dick. They switched the franchise from Century 21 to Prudential in April 2010 and can keep the Prudential brand name for 10 more years if they choose to.
Kirkpatrick said he and Dick will watch how the conversion to Berkshire Hathaway HomeServices goes at other Prudential affiliates that are likely to make the switch sooner. HomeServices of America, the nation's second-largest owner of brokerages, already counts among its holdings several agencies with the Prudential brand.
Regardless of when they take the new name, Kirkpatrick and Dick expect their company to benefit from new technology systems they'll have access to under new ownership. The biggest benefit, however, is less tangible: the vote of confidence in their industry that comes with Warren Buffett making an investment.
"The people at Berkshire Hathaway are strategic thinkers, and they see a long-term growth in this business," Kirkpatrick said.
Bradley Litz, a broker and owner of the local Real Living agency in Carmel, said he and his partners are waiting to find out when they will convert to the Berkshire Hathaway brand, but they're happy with the change.
"Berkshire Hathaway is a fantastic brand … it gives you instant credibility," Litz said. "We're as excited as can be."
Litz, his mother, Margie Litz, and Evans and Jane Wells, started their agency last year as a franchise of Real Living, which didn't have a presence here but has huge affiliates in Chicago and on the east and west coasts.
The agency has 12 brokers and one office, in Carmel, but is opening a second office next month at 749 Massachusetts Ave., where it will add six brokers. Litz said the downtown office will give his firm high visibility in a central location.
Terms of the deal between HomeServices of America and Brookfield Asset Management were not disclosed.
HomeServices' affiliates employ more than 16,000 agents in 21 states and closed almost $32 billion in residential real estate sales in 2011. Brookfield Asset Management's more than 53,000 Prudential and Real Living agents generated more than $72 billion in residential real estate sales last year.