Los Gatos Weekly-Times

Real estate companies merge and grow in marketing power

By Kristin Kusumoto

The Contempo Realty, Inc. signs on the gray building at 221 Los Gatos-Saratoga Road are being replaced by signs that spell the company's new name--Century 21 Contempo Realty.

The real estate brokerage, which consists of 18 offices in Northern California, was purchased for an undisclosed amount by the National Realty Trust in February, resulting in Contempo Realty's affiliation with the Century 21 Real Estate Corporation. The conversion was effective July 15.

"I don't think they could have planned it any better because the market is strong," said Chuck Nunnally, managing broker of Century 21 Contempo Realty in Los Gatos.

The affiliation does not affect the office's management structure or headcount, Nunnally added.

Belonging to the Century 21 system, a global network of 11,000 offices, affords Contempo Realty some business opportunities that were not available to the company as an independent brokerage, he explained.

For one thing, they have greater marketing power. "We'll bring more buyers to our sellers," Nunnally explained.

Networking within the Century 21 system, utilizing the company's Web site, and advertising in newspapers and magazines are some of the ways agents can give properties more exposure, he said.

Nunnally pointed out that the company recently purchased advertising space in The Wall Street Journal at a reduced rate.

Contempo Realty also expanded its customer service capabilities by being able to provide "one-stop shopping" services for customers in the process of relocating, such as assisting with hotel reservations and car rentals, according to Nunnally.

The company relocated in June to expand the business, and the building has more parking and visibility, Nunnally said.

The local housing market is brisk and the agency has 122 single-family homes and 14 condominiums and townhouses for sale in Los Gatos, he said. The average price for a house in Los Gatos is upwards of $600,000, according to Nunnally.

Contempo Realty is a significant addition to the Century 21 system, which has 6,200 franchises, said Patrick Keigher, regional service director for Century 21. "It's the largest one we have in our system. They have the most agents and the most sales," he said.

Keigher also said that in the real estate industry, local companies need access to the global marketplace in order to grow. "The trend is for large independent real estate companies to be affiliated with a national company," he said.

Ellen Ashley, executive vice president of the Peninsula West Valley Association of Realtors, also pointed to the trend toward consolidation in order for companies to grow and increase market share. "The past two years have shown the power of acquisitions," she said.

She predicted that mid-size firms will continue to disappear due to pressure from the megafirms, while independent firms will be better positioned to develop niche markets.

"I think it's good for the customers and the real estate industry in general," she said.

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