December 8, 2011
By Scott Baltic, Contributing Editor
Prudential Financial has sold its Prudential Real Estate and Relocation Services business to Brookfield Residential Property Services, the two companies announced late Tuesday. According to an SEC Form 8-K filed on the day the sale was closed and announced, the proceeds from the sale, before transaction-related expenses, are about $110 million, subject to an adjustment based on the closing-date net book value.
A finance subsidiary with investments in a limited number of real estate brokerage franchises was excluded from the transaction.
Current PRERS president Earl Lee will continue to head the U.S. real estate business, and Rick Schwartz, president of Brookfield Global Relocation Services, will assume responsibility for the combined global relocation services business.
The addition of PRERS to Brookfield’s existing real estate brokerage business reportedly makes Brookfield North America’s third-largest residential real estate brokerage business and the world’s second-largest global relocation services provider.
Brookfield already had offices in Portugal, and PRERS operates as Pricoa Relocation in Asia and Europe. “This transaction creates a global real estate brokerage and relocation services leader,” said Graham Badun, CEO of Brookfield Residential Property Services. “We have now increased the breadth and depth of our service offering, keeping pace with the evolving needs of our clients around the world.”
Brookfield’s residential real estate operations are now represented in all 50 U.S. states, 10 Canadian provinces, Portugal and Mexico. Its network comprises about 80,000 real estate agents and 2,800 brokerage locations, with more than $150 billion in annual residential real estate transactions.
Brookfield Global Relocation Services previously moved nearly 85,000 families in and out of more than 125 countries annually. With this acquisition, it will count as clients more than one-third of Fortune 100 companies and will also be the largest provider of relocation services to government, through long-term relationships with the U.S. and Canadian governments.
Under a licensing agreement, Prudential real estate brokerage franchisees will be able to continue using the Prudential brand based on the terms of their respective franchise agreements. In connection with the sale, Prudential agreed to provide certain Brookfield affiliates with transitional financing for the transferred relocation services business.
Brookfield’s parent company, Brookfield Asset Management, is a global asset manager with approximately $150 billion in assets under management.