Vista Sotheby to acquire Shorewood Realtors
Shorewood Realtors, which has been in the midst of Chapter 11 bankruptcy filings since mid-June, has struck an agreement to be acquired by Vista Sotheby’s International Realty.
The asset purchase agreement was reached last Friday, August 5, according to Vista Sotheby’s CEO Rick Edler. In the agreement, Shorewood’s listings and pending transactions have been sold to Vista Sotheby’s. The price of the sale was not disclosed.
This is the second major South Bay real estate transaction in two years involving Vista Sotheby’s; in 2015, South Bay Brokers merged with Vista Sotheby’s.
“After everything that’s gone on, I felt it was in the best interest for all parties concerned to sell the company,” said Shorewood President and CEO Roger Herman, who purchased Shorewood from founder Arnold Goldstein and co-owner Larry Wolf in 2014. “The transition did not go as planned and I made the decision to sell…I had to make the decision that’s right in the end.”
Edler said that his company will also acquire many of Shorewood’s agents, should they elect to join Vista Sotheby’s. That includes 118 agents as of August 8, according to the California State Bureau of Real Estate, as well as four office staff members who Vista Sotheby’s will look to retain, according to Elder.
“Shorewood has always been a strong organization, run by some very talented people with exceptional agents,” Edler said. “We’ll hopefully have a continuation of their business and track record as we merge it into our organization.”
The Shorewood brand, logo and name, however, will remain with Herman. “The Shorewood name will continue to be used in Colorado and other areas where the previous owner has additional operations,” Edler said.
Herman said that all of the parties relevant to the transaction, including Shorewood, Vista Sotheby’s and Shorewood’s largest creditor ERA Franchise Systems, have agreed to the deal. A motion for the Asset Purchase Agreement has been filed with the United State Bankruptcy Court in the District of Colorado, where Herman’s original bankruptcy filings took place.
An email announcing the agreement, acquired by Easy Reader, was sent to Shorewood associates, employees and agents announcing the sale. It reads, in part:
As many of you know, Shorewood Realtors recently filed for Chapter 11 Bankruptcy protection. Unfortunately, the filing created many concerns for our agents and many agents decided to move their licenses as a result of their concerns.
Nevertheless, Shorewood is still known in the community for its committed agents and staff. Therefore, in order to protect you and your outstanding transactions and share in our mutual commitment, I feel that the best decision for each of you is for me to sell Shorewood Realtors. I have worked hard to find a top tier local provider that is known in the South Bay and beyond, and I have found one in Vista Sotheby’s.
Although the deal is not yet complete, Vista Sotheby’s and Shorewood Realtors have signed an Asset Purchase Agreement. Once confirmed, all listing and pending transactions will be transferred to Vista Sotheby’s. We are hopeful the transaction will close within two weeks.
Shorewood’s parent company, LBH National Corporation, filed for bankruptcy in June in order to stay a lawsuit filed by ERA Franchise Systems. According to court filings, ERA said it is owed $6 million by LBH following a 2014 security interest agreement. The Chapter 11 filing was to put the companies in a position to settle, Herman said.
But in the wake of the filing, many of Shorewood’s agents, including big names such as Ed Kaminsky, Ross Cohan, and Caskey & Caskey, have moved to other area brokerage firms. Shorewood’s total agent numbers dropped from 280 in early April to 118 as of today.
The movement of agents away from Shorewood was among the reasons for the sale, Herman said.
“We’re in a business that’s fragile, and agents tend to move around…[they] have to feel secure and comfortable where they’re at and make the right business and personal decision for themselves,” Herman said. “A lot of great agents are at Shorewood; some will go to Vista Sotheby’s, some will go to other companies.”
Tyler Wolf, a son of Larry Wolf and current Shorewood agent, is not yet sure whether he and his brother Alex will attach their agency to another brokerage, or if they’ll continue on to Vista Sotheby’s. But he believes that the brand built by his father will continue on, at least in spirit.
“The reason Shorewood was a powerhouse wasn’t for anything more than the energy and professionalism of its constituent agents…someone who worked at Shorewood only offered the highest quality service,” Wolf said. “I’m not sure if there is a brokerage company that was born and grew in the South Bay that would be older or more successful; in that sense, it’s sad, but I think agents are going to go on and have successful careers elsewhere.”
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