Two weeks after the parent company of Coldwell Banker Residential Brokerage announced its acquisition of the Jon Douglas Co., the merger is moving into the painful and uncertain consolidation phase.
About 100 people in Jon Douglas’ corporate office were given notice that there might not be room for them in the merged organization, and rumors abound that offices might be closed in markets where both Coldwell Banker and the former Prudential/Jon Douglas had nearby agencies.
“It’s increasingly apparent that they bought us, we didn’t buy them,” said one former Jon Douglas Co. employee who was given 60 day’s notice last week. She declined to give her name because said she hopes that Coldwell Banker will find a place for her in the new organization.
Coldwell Banker has not yet announced any layoffs, and spokespeople did not return phone calls regarding the staff changes at Jon Douglas’ former headquarters.
NRT, the parent company of Coldwell Banker, has not yet decided how it will handle overlapping offices in markets such as Pacific Palisades, where there are now three Coldwell Banker offices within a one-mile radius. Larry Knapp, senior vice president for NRT’s western region, said the company’s goal is “to make space for everyone we possibly can.”
He acknowledged that some offices might be merged, but added that “such action will be designed to accommodate all of the good sales associates.”
For now, rumors about the fate of those offices continue to swirl.
Dan MacGregor, who owns three MacGregor Realties in the San Fernando Valley, said he’s received numerous calls from former Jon Douglas agents who fear that their offices in Arcadia, San Marino and Pasadena might close.
“Everyone’s anticipating they’ll close and that (Coldwell Banker) is keeping it a secret for now,” MacGregor said. “It’s just not cost-efficient to keep them open.”
Jon Douglas Co.’s 43 Southern California offices joined Coldwell Bankers’ 41 offices when NRT bought the company on Sept. 11 for an undisclosed price.
Jon Douglas, who founded his company in Brentwood in 1971, has said the merger was prompted by NRT’s high bid and his desire to retire. Douglas, 61, signed a five-year non-compete agreement with NRT and will act as an advisor to the merged organization.
The Jon Douglas offices currently operate under the Coldwell Banker name everywhere except West Los Angeles and the San Fernando Valley, where they are called Coldwell Banker/Jon Douglas. Those offices currently have a Coldwell Banker tarp covering the old Prudential/Jon Douglas signs because of copyright issues stemming from Douglas’ dissolution of its partnership with Prudential Real Estate Affiliates, Knapp said.
While former Jon Douglas employees are uncertain about their future with their new parent company, competing brokerages see the merger as an opportunity to expand their market share and sales force.
Robert Todd, who owns several RE/MAX Realties in the South Bay, said he decided to open offices in Venice and Beverly Hills this year when rumors of a Jon Douglas Co. acquisition heated up this summer. He said he plans to further expand his Westside presence, an area where Jon Douglas was traditionally strong.
“This merger leaves a lot of potential for other realties to move in,” he said.
Fred Sands, who operates 30 realties in Los Angeles County and was Jon Douglas’ biggest local competitor, said he started a new marketing campaign this month that uses the slogan, “if your name is on the building, your reputation is on the line.” He said the ad is intended as both a dig at Coldwell Banker and a lure to former Douglas agents.
“Agents like the idea of working for a private owner rather than a faceless corporation,” Sands said, noting that about 200 Douglas agents have inquired about employment opportunities at his realty during the past month.
But Karen Greensweig, assistant manager at the Coldwell Banker/Jon Douglas office in Beverly Hills, dismisses stories that Douglas agents are seeking jobs elsewhere.
“I know that all the other realties keep calling our agents and offering them jobs,” she said. “But we haven’t lost any yet.”