O'Conor, Piper has made three 1993 acquisitions

BIG FIRMS GETTING BIGGER

April 18, 1993|By Ellen James Martin | Ellen James Martin,Staff Writer

Sledgehammers and saws will be the tools of acquisition fo O'Conor, Piper & Flynn this spring, once it completes its merger with Church Circle Realty in downtown Annapolis. O'Conor, Piper, which has an office adjoining Church Circle's, will simply tear down a wall to join with the smaller firm.

That's one of the simpler mergers for Timonium-based O'Conor, Piper, whose ambitions extend throughout metropolitan Baltimore and beyond.

O'Conor, Piper is on a buying spree. In the first three months of 1993, it has picked up three realty firms with a total of 75 agents. And it is negotiating to buy six others.

"We constantly have acquisition discussions going on," said Chairman and Chief Executive Officer James P. O'Conor.

In 1987, the firm had 1,000 agents at 32 offices and sold $1.1 billion worth of real estate. Last year, its 1,400 agents at 40 offices sold nearly $1.7 billion worth.

But O'Conor, Piper's growth strategy is different from that of its main competitor, Fairfax, Va.-based Long & Foster.

Long & Foster engages three full-time recruiters who aggressively seek out productive agents from other firms.

President Wesley Foster even boasts that he once drove his Lincoln Continental to a rival firm's office to move the belongings of an agent who needed VIP treatment to be persuaded to switch.

O'Conor, Piper, meanwhile, focuses more on expansion through acquisitions than through aggressive recruiting.

"The overall acquisition strategy is to continue to grow in an orderly and sensible manner, expanding from our core base into those areas that complement and enhance our market position," Mr. O'Conor said.

No particular county is favored for expansion, he said.

Formed in 1984 from O'Conor & Flynn Inc. and Piper & Co. Inc., the firm concentrates on the Baltimore area but also emphasizes the Eastern Shore and southern Pennsylvania.

Other partners in the firm include James Piper III, president of administration; Ramsey W. "Bill" Flynn, president of operations; and John Evans, general sales manager.

O'Conor, Piper's rapid growth reflects dramatic changes in the residential real estate business.

Poor economic conditions, high advertising expenses and agents' demands for a bigger share of commissions have made it tougher to run a real estate brokerage.

"The reality of high commissions paid to agents has reduced the profit margin to the industry," Mr. O'Conor said.

As a result, companies such as O'Conor, Piper and Long & Foster have been able to pick up smaller firms burdened by those pressures. And, given the rising cost structure and increased complexity of the realty industry, large firms able to take advantage of economies of scale will continue to have an edge, Mr. O'Conor predicted.

"The industry has grown to the point where large companies are able to provide services, programs and benefits to the customer that the small companies cannot provide," he said.

Under the O'Conor, Piper canopy, for example, customers can get access to mortgage, insurance, title and relocation divisions. They also can make use of the firm's guaranteed sale and equity advance programs, in which the firm advances money to some home sellers so that they can buy another house.

George Turner, Church Circle Realty's founder, says his 10-year-old firm was profitable when he agreed to merge with O'Conor, Piper. But his firm's prospects of growing from a small to a middle-sized operation were poor.

"As a midsized company, I think you're very vulnerable to changes in the economy," said Mr. Turner, who is staying on with O'Conor, Piper as associate broker for its enlarged downtown Annapolis office.

The Annapolis acquisition brings O'Conor, Piper 10 agents specializing in waterfront estates and other homes that sell for more than $500,000.

In February, O'Conor, Piper merged with Jacksonville-based Gaylord Brooks Co., which had 15 agents. That firm has specialized in the sale of farms, large lots and estates in northern Baltimore County for 40 years.

Then, in March, O'Conor, Piper bought Vantage Real Estate, with 50 agents and offices in Glen Burnie and Severn. The midsized firm specializes in middle-income home sales.

Although several national chains -- including Century 21, Prudential and Coldwell Banker -- operate on its turf, O'Conor, Piper's biggest challenge continues to come from Long & Foster, whose own growth ambitions span the mid-Atlantic region, with a heavy emphasis on the Washington area.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.