Driving the market: Sotheby's International Realty
by Samantha Brooks Interview with Mike Good, President & CEO of Sotheby's International Realty Affiliates Background: The auction house was founded in London in 1744. After 200 years of selling so much of the great artwork that was hanging on the walls, the firm decided to sell the walls as well. Entering the real estate business, Sotheby’s International Realty was established in 1976. The name was used for marketing purposes by a select group of local affiliates to gain greater exposure for their property listings Association with Auction House: Our clients are really connoisseurs of life, whether it’s fine art or fine property. It’s a natural association for the Sotheby’s auction-house clients to turn to Sotheby’s International Realty when they want to buy property. Our clients see the brand as a leader in the luxury market and associate it with expertise and discretion. The brokers within our network can extend the benefits and services of the auction house to their clients. We have a long-term licensing agreement where the real estate company can use the auction house’s name. We’re business partners in a large sense and refer clients back and forth to each other. How They Work: In February 2004, Realogy Corp. [formerly Cendant] entered into a long-term strategic alliance with Sotheby’s Holdings, Inc., the parent company of Sotheby’s auction house. The agreement provided for the licensing of the Sotheby’s International Realty name and the development of the Sotheby’s International Realty luxury franchise system. Basically, two things were accomplished. First, we created a full-service luxury real estate network, comprised of high-end firms that would join as affiliates. Second, we acquired real estate offices owned by Sotheby’s International Realty. Now the company has a merged network that combines both the company-owned offices and the franchise offices, which has sparked new growth. Before the merger, there were 15 company offices—now there are nearly 60. This new model is more about the brokerage firm and the quality and services they can provide at the local level. All of our local offices carry the Sotheby’s International Realty brand name on all of their offices and property listings. On the Local Level: We have more than 350 offices and more than 6,000 associates and brokers working for us throughout 20 countries. We don’t want to be in every market at every level. We only follow markets that contain luxury properties, which means that more than half of the United States probably wouldn’t have a Sotheby’s International Realty office location. However, not everything our brokers sell is over $1 million. Our offices serve the market they’re in and often lead in the luxury segment. Our focus is on controlled growth; we turn down far more companies than we accept. We don’t want to be the largest real estate franchise system, but we do want to be the finest and offer the best services. France: "In contrast to the U.S., the European luxury real estate market is largely unorganized and dominated by small local companies. However, many markets like France and Monaco have an international clientele that is looking for professional services and know-how on an international level. Sotheby’s International Realty is able to fill that void." —Alexander Kraft, a former New York attorney who started at the Sotheby’s auction house in Beverly Hills before moving to Europe in 1999, and who is now the chairman and CEO of Sotheby’s International Realty France and Monaco
Source Reference:
http://www.robbreportcollection.com/Feature-Driving-the-Market-Sothebys-International-Realty
