Berkshire Hathaway Inc. is acquiring the network from Brookfield Asset Management. Berkshire and Brookfield will launch Berkshire Hathaway HomeServices next year and begin switching agents to the new firm.
Buffett said he's happy to lend Berkshire's name and financial strength to the new company, which will be based in Irvine, Calif., and be led by a team of executives from Prudential Real Estate.
"I am confident that these partners will deliver value to the residential real estate industry, and I am pleased to have Berkshire Hathaway be a part of the new brand," Buffett said in a statement.
Financial terms of the deal weren't disclosed, but Berkshire's HomeServices of America unit will be the majority owner. HomeServices already owns local brokerages with 16,000 real estate agents in 21 states.
HomeServices Chairman and CEO Ron Peltier said this deal gives the company a national franchise network with 75,000 to complement its local brokerages. Peltier said in an interview that he wanted to acquire a national franchise because building one would be too costly and take several years.
The Prudential and Real Living brands will be eliminated over the next couple years.
"The strategy going forward is to migrate the franchises over to one super brand: Berkshire Hathaway HomeServices," Peltier said. That will help the company build one main brand online under the Berkshire Hathaway HomeServices banner.
Peltier said the independent local brokers that HomeServices already owns won't be forced to switch affiliation to the new franchise network, but they will begin noting they are owned by Berkshire Hathaway. For example CBS Home Real Estate in Omaha will keep its name, but add that it's a Berkshire Hathaway affiliate.
Peltier said that will help ensure that both the independent brokers it owns and Berkshire Hathaway HomeServices locations will show up in Internet searches.
Berkshire owns roughly 80 subsidiaries, including railroad, clothing, furniture and jewelry firms, but its insurance and utility businesses typically account for more than half of the company's net income. The Omaha, Neb., company also has major investments in such companies as Coca-Cola Co., IBM and Wells Fargo & Co.
Brookfield, based in Toronto, manages more than $150 billion worth of utility, infrastructure and real estate assets.
Berkshire Hathaway HomeServices: www.berkshirehathawayhs.com
Berkshire Hathaway Inc.: www.berkshirehathaway.com
Brookfield Asset Management: www.brookfield.com