COLDWELL, SANDS JOIN TOP REALTY FIRMS FORMING L.A. POWERHOUSE.

Byline: Gregory J. Wilcox Staff Writer

In a deal that creates the Los Angeles area's biggest residential real estate company, Coldwell Banker Residential Brokerage said Friday that it has merged with Fred Sands Realtors, California's largest independent marketer.

Financial terms were not disclosed.

Coldwell Banker, the residential sales volume leader in the Los Angeles market during 1999, acquired 23 Fred Sands-owned offices, including all those in the San Fernando Valley, the Westside and Westlake Village.

The offices, combined, have 1,200 employees.

``The 23 offices are among the most high-powered real estate offices in the nation,'' Sands said.

Fred Sands Realtors consists of a New Homes Group, an International Estates division, an International Relocation and Corporate Services division, and the Fred Sands School of Real Estate, among other services.

The company generated $5.04 billion in sales last year, according to industry tracker Real Trends.

The Fred Sands name, one of the best-known in the region, will be dropped from the Coldwell Banker offices but it will not disappear from the real estate scene.

The real estate mogul owns Fred Sands Affiliates, a chain of 40 offices in outlying areas of Los Angeles that are not part of the deal.

``This merger creates tremendous opportunity for us,'' said Sands, who becomes vice chairman of Coldwell Banker Residential Brokerage of Southern California. ``We will be able to leverage the vast resources and synergies of the two companies under one roof.''

Locally, the two companies are sales powerhouses and both are big players in the upscale market. Last year, Sands was the No. 1 home seller in the Valley and Coldwell Banker was a close second, market watchers said.

They are also the major players in the high-end market. Last year, three out of every four $1 million-plus homes in California were sold through Coldwell Banker Previews International, the estates division of Coldwell Banker Residential Brokerage.

The deal surprised some industry observers.

``There was not any indication it was going to happen,'' said Jim Link, executive vice president of the Van Nuys-based Southland Regional Association of Realtors.

While Coldwell Banker officials indicated that no layoffs are planned, Link said some offices that are close to each other might eventually consolidate.

The trend of big national companies like Coldwell Banker snapping up top local sales producers has been growing throughout the 1990s.

In 1997 Coldwell Banker's parent company, NRT Inc., bought Beverly Hills-based Jon Douglas Real Estate Services Group and two smaller brokerages for $310 million. At the time, Douglas and Sands had about an equal market share in the Valley, Link said.

Lloyd Greif, president and chief executive officer of the Los Angeles investment banking firm Greif & Co., represented Douglas and Sands in their deals with Coldwell Banker.

The financial consideration is similar in both cases, he said.

``The real estate market is a stronger market today than in 1997. It's had several years of growth and Fred Sands has benefited from that,'' Greif said.

The deal with Sands will likely be transparent for consumers, said John Karevoll, a real estate market analyst for La Jolla-based DataQuick.

``It's probably not a bad thing for the marketplace. The move is toward consolidation,'' he said. ``It's just a question of efficiencies. Where the agent's office is and where he hangs his license probably won't mean much to the buyer.''

During 1999, Sands ranked second to Coldwell Banker in sales volume in the Los Angeles area and 11th nationally, said Real Trends.

Coldwell Banker Residential Brokerage, already Southern California's largest, gets even bigger. The combined company will have more than 103 offices and 5,700 employees.

Bob LeFever, the company's president, describes the deal as an advantageous fit for both operations.

``This merger comes at an opportune time for all the affected sales associates,'' he said. ``We initiated these talks. We've been trying to talk to Fred for years.''

It also comes at a time of softening sales counts and rising home prices.

During October, the median price of a previously owned Valley home was $245,000, just below the September record of $247,000 and equal to the previous high set in 1989. Inventories are especially tight, too, which makes for a tough selling atmosphere.

Neither executive is concerned, though, since sales peaked in 1998.

Sands points out that economists are characterizing any downturn as a soft landing and that California will feel it the least.

``When people say sales are softening, they are softening off a peak year,'' Sands said. ``All the factors for real estate are very positive.''