The Gathering: Sue Yannaccone says scale can be a ‘super power’ as brokerages consolidate

As the real estate brokerage space continues to consolidate, creating large national firms with massive scale, critics have claimed this move will lead to a homogenization of formerly disparate brands. 

However, Sue Yannaccone, who was recently promoted to chief operations officer of Compass International Holdings (CIH) the parent company of Compass, @properties, Christie’s International Real Estate and the six Anywhere Real Estate brands, sees scale as a competitive advantage. 

After nearly three decades in the real estate industry, the last decade of which spent at Anywhere Real Estate, Yannaccone knows a thing or two about leveraging a brokerage or a brand’s scale. 

In her first interview as COO of Compass International Holdings, Yannaconne explains to real estate leaders at HousingWire’s The Gathering in Austin, Texas, what integration with the Anywhere brands looks like and why scale is the next iteration of real estate.

“Scale can be a super power if leveraged the right way. We had these six brands, nine business, mortgage, title global relocation, but we need to be able to leverage that scale, so we looked for the areas that we could integrate,” Yannaccone told attendees of HousingWire’s The Gathering on Tuesday morning. “Where did we not need to do something eight or nine different ways, but then where did we need to be hyper differentiated to provide value to our customers, the real estate professionals and to the brands.” 

Differentiation is key

In order to achieve that hyper differentiation in areas where it is needed, Yannaccone said it’s important to remain “fiercely focused on enabling independence in the marketplace.” 

“When we partner with these companies as franchisees, that should be additive,” Yannaccone said. “We have separate leaders for all of those businesses and anyone who knows our brokerage or franchise leaders knows that they have their own culture and what we do is help provide the fuel to get some octane for the growth that I believe is required to move forward.” 

Right now many firms in the industry, including Compass International Holdings, have turned to mergers and acquisitions to fuel growth, and while she believes this is an effective growth strategy, she also feels strongly about the role organic growth should play in a business. 

“I don’t think you can ever stop your organic growth machine,” she said. “That is something that you as a broker-owner have control over, more so than actually doing M&A. You should always have that machine or organic growth and always be looking at the opportunity for agent, mortgage or title talent to join your organization.” 

When it comes to doing acquisitions, Yannaccone believes you need to have a clear reason behind why you want to acquire a company in order to create a successful merger. 

“Growth for growth’s sake doesn’t make any sense,” she said. “If you are not thinking, ‘What value does this bring to me, my agents and the consumers,’ then how are you going to know what synergistic benefits you’ll gain to allow you to then reinvest in your value proposition to help fuel more growth.” 

These are questions CIH has had to dissect as it has navigated the massive merger between Compass and Anywhere. While it is early days, Yannaccone said so far the integration of two firms has gone smoothly. 

“I think a lot of people have questions about how it is going to work for independently owned franchises. Are they going to have to do the three-phased marketing plan? Are they going to use the platform? And what I have to remind everyone is that franchisees are independent, and we cannot tell a broker-owner how to run their business,” Yannaccone said. 

While they are working to bring all agents over to the integrated technology platform, something Yannaccone said there is significant demand for, what CIH is primarily looking to do is provide more options to franchisees, brokers and agents.

“Fundamentally it is about choice. We can’t and we wouldn’t dictate how someone runs their business — and I think that is a lot of the dialogue right now — but we are in the business because of real estate professionals, and it is critical that we continue to lean in and learn what matters and continue to provide those offerings. It is about giving more options to folks for how they want to move their business forward.” 

Looking ahead, Yannaccone said she anticipates seeing further industry consolidation and change. 

“The consolidation is inevitable,” she said. “I think you are going to continue to see a push for change and being open to new and different ways of doing things. I just hope that through all of this we don’t lose sight of who we are ultimately doing this for, which is the homeowner and helping them to realize their dream.”