The long-standing market slowdown and aggressive expansion by large corporations are likely to have been the prelude to more acquisitions in 2025, Intel’s findings and interviews suggest It’s there.
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The committee’s lawsuits and fights involving the National Association of Realtors have dominated recent headlines. But quietly in the background, something else was going on: major acquisitions and mergers.
Famous examples include the compass that buys the latter and Blum in April, @Properties Christie’s International Real Estate to buy in December, and Howard Hanna merges with Home Expert Realty last month. These and similar stories raise some questions. Will the same major acquisition continue this year? What types of companies will buy and what types will be eaten up?
In other words, was 2024 a prelude or an additional note to the integrated story?
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To find out, Intel contacted industry experts – both in non-record talks – surveyed brokerage leaders in the latest INMAN Intel Index Survey.
The key point from these efforts is that a variety of factors are potentially converging to make 2025 a banner year for mergers and acquisitions. Put another way, 2024 could actually be just a prelude.
But at the same time, not everyone is likely to be the winner of this story. Instead, large, powerful companies with a track record of success in a lean era may be the ones making the most headlines for M&A deals this year.
Most brokerage leaders don’t focus on M&A
In January, Intel asked brokerage leaders to rank mergers and acquisitions on a scale of 1-5. One showed that M&A was not on the radar, while five showed that there was an imminent debate. The results suggested that mergers and acquisitions were not particularly high on the priority list of nearly 200 brokerage leader responders.
- Almost 47% One of the selected survey respondents means that M&A is not on the radar. Another 12% Select two and similarly indicate that M&A is of low priority.
- only 8% Five selected respondents and other respondents were selected. 12% Four Choices – Responses indicating that M&A is a key priority.
- When Intel asked leaders about M&A in 12 months, the results were similar. In that case, 36% Of the selected respondents, this question means that the topic is “not on the radar” again, and another respondent 16% Selected 2. only 11% of respondents who selected five.
Acquisitions go to large companies
However, this does not mean that mergers and acquisitions are not a big deal this year. In fact, everyone who spoke to Intel for this story predicted important M&A news in the coming months.
“I think it’s going to be a very active year,” Ojo/Movoto.com president Chris Heller told Intel in a broader sentimental comment. “I think a lot of companies are trying to grow. I think we’ll see a lot of activity.”
Therefore, it is possible that M&As are not evenly distributed. In large quantities, acquisitions may not be on all radar, but the topic is very On the radar of a few major players.
Experts have provided several reasons why 2025 could be active against M&A.
- The slow market has been putting pressure on small businesses for several years.
- “Companies say they’re basically saying I can’t see a way out of it,” Cofano told Intel.
- “As the industry goes through challenging times, you tend to see a lot of integration,” Heller said.
- Large companies such as Compass have been able to grow despite the slower market.
- For example, Compass reported growth in both revenue and agent counts in the first three quarters of 2024.
- Exp’s agent count growth remained largely stagnant in 2024, but reported revenue growth in the first three quarters of last year.
- “It feels like the big business has probably overcome the storm,” Heller said. “They don’t see 2025 as ‘Let’s get to the other side.’ They see 2025 as “now we have to grow.” ”
- “For big players, this is part of their strategy and they are actively looking at ways to grow the company through acquisitions,” Cofano said. “In contrast to small businesses that may be more opportunistic in the way they approach acquisitions through relationships at the local level.
- Cloud-based companies such as EXP, LPT, and Real are growing more than traditional brokerage companies and are operating more lean. As a result, some M&As can occur as traditional operations are looking for access to these business models.
- For example, the actual brokerage reported last fall that its agents exploded over 2,000 between July and October.
- “It’s almost impossible for a traditional brick and mortar company to suddenly become cloud-based,” Cofano said. “They almost need to kill old models.”
- Private equity companies have been sitting on the sidelines for the past few years.
- “Many of the acquisitions come from private equity,” says Ben Kinney, co-founder of Place, who made five acquisitions last year, from private equity. “They’re sitting on a huge amount of cash that they couldn’t deploy. They’re looking for opportunities, and my phone is ringing from the hook.”
- Kinney also said the capital market may give “strongest companies” more money this year and put them in a “position to feed weaker companies.”
Brokers are most interested in the acquisition
Intel also asked the brokerage leader. do Use M&A on your radar. Most people show that they are more interested in energizing their competitors than drinking themselves.
- Multiple respondents, or 48%their brokerages, which acquire competitors in their market, said their leadership team would consider this year.
- Second most popular response 38%noting that their company will make acquisitions to expand into new markets.
- Total only twenty three% Their leadership team showed that if the team stays in place or they leave, their leadership team will be open to sales.
Strong Survival
Continuous market pressure means that one type of acquisition that could become common this year involves companies that don’t yet understand the new normal.
- “On the outside, they may seem struggling, but maybe they are,” Heller said of some of the acquisition targets. “Things aren’t improving at the speed they need.”
- “An important measure of success in real estate brokerage and brands is the number of great real estate agents you attract and maintain,” Mark King, former president of Keller Williams, told Inter. As you grow or retreat, there is no stagnation. Therefore, companies that do not want to evolve, grow and increase their value towards local agents will likely be the goal of an acquisition. ”
However, the most flashy deals can involve actually thriving companies.
- “In these scenarios, the companies being acquired need to look at 1+1 = 3 scenarios,” Cofano says. “They are not necessarily companies that feel they are struggling financially or have no way to move forward. But with the acquisition, they and their agents have been forced to take on new ownership, resources and size, and larger. Everything an organization can provide will help you do well financially.”
- Kinney also pointed out positive cash flow companies (local brokerages and title companies) as potential acquisition targets. “These companies are private equities trading at multiples of EBITDA. It is sold to companies, public companies, or other profitable private companies.”
Drops economics
While the Intel Survey questions focused on brokerage leaders, Proptech repeatedly appeared in Intel’s conversations for this story. And for all the issues, what the market has given to securities companies is equally bad, at least for many prop tech companies who make money from real estate professionals, at least for the much less cash experts. That’s what it is. As a result, 2025 could be a time when companies win the world of Proptech to work together to survive or reduce losses in the 11th hour.
In other words, PropTech could become ground zero for real estate M&A in 2025.
- “There are many startups that have been launched over the past five years, and if they are not beneficial, they will be targets,” Heller said. “If they don’t succeed in finding a home, they often merge with other companies.”
- Kinney said high-tech companies could have “low product fit and low revenue.” In that case, “These companies are often fire sales and are purchased for scrap by small businesses that aim to create new revenue streams or increase their own numbers.”
- Other companies may have good products, but they are fighting revenue growth. “These companies are acquired through a combination of cash and stock, providing founders with the opportunity to win bigger wins with the acquisition company,” Kinney said. “They are usually purchased by companies that are trying to expand their customer base or product line.”
Methodology Notes: This month’s Inman Intel index investigation FEB was held on January 21st. 4, 2025, 652 responses were received. The entire Inman Leader community was invited to participate, and a rotating randomized selection of community members was asked to participate via email. Users answered a series of questions related to self-identified corners of the real estate industry, including real estate agents, brokerage leaders, lenders, and proptech entrepreneurs.. The results reflect the opinions of the engaged Inman community. this investigation It will be held every month.
Please email Jim Dalrymple II
