Realty chain absorbing smaller firms in region

LONG & FOSTER EXPANDS

January 29, 1993|By Ellen James Martin | Ellen James Martin,Staff Writer

It was a "Ma and Pa" company, literally, and having nurtured their own small business, Edward and Regina Brockmeyer were sad to see it go.

But earlier this month, the couple, both 60, shuttered their real RTC estate office on Harford Road and moved eight blocks north to join the sales staff of Long & Foster's Parkville office.

"Our biggest regret was giving up a business that was appreciated -- that you felt was used," said Mrs. Brockmeyer, who was co-owner of the Albert L. Jones Co., a Parkville firm whose roots go back 45 years.

By relinquishing their business to Long & Foster, the Brockmeyers became part of the larger company's master plan to spread itself more widely through the Baltimore and Washington markets, as well as to Maryland's Eastern Shore. Not only is the Virginia-based company accelerating its drive to acquire small real estate companies; it is also opening offices in areas where it had none before.

"We're constantly looking for acquisitions and constantly opening new offices," said Wesley Foster, Long & Foster's chairman.

The heart of the effort, he said, is not only to gain more offices, but to gain offices with more agents, to provide a greater economy of scale.

"In most cases, we do not open a new office," said George Eastment, Long & Foster's senior vice president. "We just add agents from local competitors without adding much to our overhead. If we go from 20 to 30 agents, it doesn't make much difference in our overhead."

Long & Foster opened a new office last fall in Fell's Point, "because we didn't have any office in Baltimore City, and Fell's Point is close to downtown Baltimore," said Alice Burch, Long & Foster's Baltimore regional manager. "Also, there is quite a bit of [real estate] activity in the Fell's Point-Canton area."

The Virginia-based realty chain opened a temporary office in the Forest Hill section of Harford County and will be ready to open a permanent office soon, Ms. Burch said.

In addition, Long & Foster plans to serve the northern Baltimore County market with a new office in Shrewsbury, Pa., which is expected to open in mid-February, Ms. Burch said. She said the company has several other new offices and mergers on the drawing board.

Long & Foster officials said acquisition hunting has been especially good in the past couple of years during the real estate downturn. In many cases, realty office owners sell their companies for relatively small sums, based on the number of pending listings that the firm provides in the merger, Mr. Eastment said.

Long & Foster executives said small realty companies -- faced with increasing costs -- were finding it harder to compete. At the same time, there are relatively few buyers for such firms.

"The local neighborhood office is going by the wayside," Ms. Burch said.

Long & Foster has made no secret of its desire to challenge the leader in the Baltimore area, O'Conor, Piper & Flynn, which is also growing rapidly. The chairman of the Timonium-based firm, James P. O'Conor, declined to comment on his rival's expansion.

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