By Peter Ricci
Warren Buffett’s Berkshire Hathaway has announced that it has purchased both the Real Living and Prudential real estate networks from Brookfield Asset Management in an aggressive expansion in the real estate markets.
The deal, of which the complete financial terms have not yet been disclosed, is just the latest acquisition for Berkshire’s HomeServices firm, which already has 16,000 real estate agents across 21 states.
Berkshire’s Vote of Confidence for Housing
The one intriguing aspect of the deal is that Brookfield just purchased the Prudential network not even a year ago. Although it seems like a rather quick turnaround on Brookfield’s ends, the deal makes perfect sense when one views the post-boom business decisions of Buffett.
Ever the optimist, Buffett was endorsing expansionary policies even during the financial meltdown, and given his recent bullish comments on the housing market, it’s not surprising that he would make such a pronounced investment in real estate.
Also, Buffett’s acquisitions are another sign of investor confidence in the housing market – perhaps the sign, even, given Buffett’s superior reputation in the investment world. Along with the successful IPOs of Zillow, Trulia and Realogy, the markets can’t seem to get enough housing, it seems!
The Prudential network will be based in Irvine, California, and managed by executives from Prudential. Both the Prudential and Real Living brands, though, will be combined into what HomeServices CEO Ron Peltier called a “super brand,” called Berkshire Hathaway HomeServices – a name that, ironically, has been criticized by some outlets for its lack of imagination.
Real estate website Estately, as a result, took it upon itself to suggest to Buffett what it called “superior” names for the new brokerage. It suggested 29 in total, but our favorites were “Warren’s All-You-Can-Eat Real Estate Buffet” and “Buffett the Real Estate Slayer.” See the other suggestions here!