Buffett's HomeServices broker buys Chicago agency
A real estate brokerage run by Warren Buffett's Berkshire Hathaway Inc has bought a Chicago-based agency from Brookfield Residential Property Services, the latest in a series of acquisitions by Berkshire and its units.
Berkshire's HomeServices of America Inc, the second-largest U.S. residential real estate brokerage, on Tuesday said it bought Koenig & Strey GMAC Real Estate for an undisclosed price. Brookfield is a unit of Brookfield Asset Management Inc.
The purchase adds 900 agents to Minneapolis-based HomeServices, which employs more than 15,000 real estate professionals in 20 U.S. states. The brokerage is a subsidiary of Berkshire's MidAmerican Energy Holdings Co unit.
Koenig & Strey had about $2.6 billion of sales in 2008 and will become a Brookfield franchisee, HomeServices said.
Last month, Berkshire said second-quarter real estate brokerage revenue fell 16 percent from a year earlier because of lower home sales and prices. Profit rose 73 percent because of reduced costs and increased refinancing volume.
Berkshire spent $6.05 billion on acquisitions in 2008. Though it spent just $221 million in the first six months of 2009, Tuesday's purchase is at least Berkshire's second in three weeks. On August 11 its Johns Manville unit said it bought Corbond Corp, a maker of foam insulation.
Buffett prefers to acquire companies with easy-to-understand businesses, consistent earnings power, strong management, and little or no debt.
Since 1965, Buffett has built Omaha-based Berkshire into a conglomerate with close to 80 businesses that sell such things as car insurance, ice cream, paint and underwear, and more than $112 billion of investments including in common stocks such as Wells Fargo & Co and Coca-Cola Co.
Berkshire's Class A shares were down $2,450 at $98,400 in afternoon trading on the New York Stock Exchange.
(Reporting by Jonathan Stempel; editing by John Wallace)
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