Brookfield Residential Property Services knew it had an image problem on its hands when it agreed to take over GMAC Financial Services' residential real estate division at the height of the credit crisis.
The subsidiary of Toronto-based Brookfield Asset Management Inc., operates Royal LePage in Canada.
With the GMAC deal, it became an instant player in the U.S. real estate market, with 470 offices and more than 8,000 agents.
But it didn't simply inherit the property assets when it signed the deal last September. It also inherited the stigma tied to companies that received government bailouts.
GMAC received $12.5-billion (U.S.) in federal bailout funds to help stave off bankruptcy. Every time GMAC hit the news, the impact was felt in hundreds of the branches bearing the same name.
Clearly, a makeover was in order for the new owner.
“Our agreement stipulated that we had a limited amount of time that we could use the GMAC brand and – candidly –it wasn't a very strong brand anyway,” said Phil Soper, Brookfield Property Service's chief executive officer.
“The parent company had suffered, and it was arguably never a great fit for real estate anyway. We tried to build a new brand from scratch, but that is not for the faint of heart.”
Mr. Soper thinks he finally solved his problem this week, signing a deal for an undisclosed amount to take over Ohio-based realtor Real Living. All the GMAC offices will be rebranded as Real Living within the next three months.
The seven-year-old Real Living brand is everything GMAC is not – hip, fun and female-friendly. Together the two U.S. companies have 15,000 agents and account for 2 per cent of all U.S. sales – some $20-billion worth.
“It's so important to have women onside, and if you look at Real Living, it's very contemporary and designed to make a woman shopper – someone who has to get an emotional connection with a brand – feel comfortable,” he said.
Troubles in the U.S. real estate market have been well documented, as the recession shaved up to 40 per cent off home values.
Industry research suggests that, in general, there are now two types of buyers in the market: single women and young families. And when families shop for a new home, studies suggest that women carry 70 per cent of the decision-making power.
“Real Living appeals not so much to the real estate consumers and agents of the past, but rather the ones that are coming up,” Mr. Soper said.
Real Living's greatest innovation, he said, is its homey approach to sales offices.
They are designed to feel more like homes than places of business – customers take off their shoes in a mudroom, they sit in softly lit rooms on couches as they chat casually about financing and new homes. Fully functioning kitchens feature freshly brewed coffee and fresh fruit.
“This is a demographic that we need to capture if we are going to do well in the United States.”