I recently had the opportunity to meet with Ed Reale, Senior Managing Director of Compass, among much activity at the company’s new office in Bridgehampton.
Ed, I appreciate you taking the time to discuss your plans for making Compass a player in the Hamptons real estate market. We have seen the real estate market on the East End evolve at a fairly rapid pace from “mom” and “pops” to name-brand franchises, two of which (Sotheby’s and Brown Harris Stevens), you served with as manager. How do you plan to distinguish Compass from the competition?
ER: Our approach is going to be different in a number of ways. First of all, we intend to empower the agents in a different way, both with technology and with office support, and thirdly, with a collaborative environment. Compass has 35 to 40 software engineers, designers, and a huge marketing department. Everything is done as a team. No one person dictates decisions, from the local level to the headquarters level. Nothing is assumed. We are all part of the decision-making process. It is quite fascinating how it works. We have three or four people doing what I used to do. We have roving assistants, an information technology person in each office, a marketing person, as well as the support team in New York. Everyone has input into new ideas, even as far as technology is concerned. Just as important as the technology is a collaborative, friendly office atmosphere.
How do you achieve that?
ER: You start with a careful selection of agents and then treat them fairly and equitably, and being open with each other. That’s what was most attractive to me, personally. And that carries over from our CEO and in our Manhattan offices. It’s quite remarkable. Everything is done with a lot of research and diligence. That’s true in choosing agents and managers. We have attracted a good mix of agents, both very experienced and some who are up-and-coming.
In addition to Bridgehampton, which other locations are you planning to move in to?
ER: We have a lease signed for space on the west side of Main Street in East Hampton. We will be moving in there in the early part of January. And we have our sights on a location in Southampton, but that hasn’t been finalized yet. We do hope to be in Southampton by early spring.
How many administrative people do you currently have reporting to you?
ER: I have five just in this office, all of whom are employees, not independent contractors as are the agents. When we have all three offices functioning, we plan to have 12 to 15 employees. We will have the capacity for 60 to 70 agents. We will be very careful about who we hire. We will not be rushing to just fill the seats. No one person hires anybody in this company, and that’s true of administrative staff and agents. Marketing people hire marketing people, IT hire IT, etc.
How is that different from the way other firms operate?
ER: Well, for the most part, the managers can hire whomever they want. It adds a little more time to the process, but everybody’s invested in the process. There’s a real team spirit in this company.
Tell me a little about Compass.
ER: We have a substantial New York City presence, fully operating there for about two years. We have offices on Park Avenue, 5th Avenue, as well as Park Slope and Williamsburg in Brooklyn. We also have a number of offices in Washington, D.C., Los Angeles, Miami, and Boston. The company plan is to be in 16 urban areas by the end of 2016.
How many agents do you have currently?
ER: Currently we have 15, all from different companies. We have four teams already and some of them have more than two members. It’s very consistent with the Compass approach of team effort. Given the competition today, becoming a member of a team is the best investment of time for new agents.
In your experience, what would you say is the learning and earning curve for new agents?
ER: I would say, generally two years. There are exceptions, but they tend to be longer rather than shorter.
Having said that, are you interested in recruiting new agents coming into the business?
ER: Yes, at present our focus is on experienced agents, but we will want to recruit people new to the business.
How do you plan to make your presence known with the agents?
ER: We have and will continue to bring in highly successful brokers who are already very well-known and respected, and we will continue to do that. But in addition, we will be launching an advertising campaign different from the more traditional methods used. We have a strong social media department as well as an outreach to the top national and international brokers.
Real estate has always been considered a people business. How do you reconcile that with the growing emphasis on technology?
ER: Real estate will continue to be a people business. That’s why we are being very careful with our selection of agents. Technology will never replace the personal relationships.