By Kathy Bevan
One of the most prestigious names in the world of high-end art and antique auctions is targeting Canada’s luxury real estate market. Sotheby’s, which until this year had only operated in the Canadian marketplace through affiliations with independent real estate companies, is now selling master franchises under its Sotheby’s International Realty Affiliates brand.
In February, the company awarded its first master franchise rights in Canada – for the provinces of B.C. and Alberta – to a partnership headed by Vancouver entrepreneur Ross McCredie. The new Sotheby’s International Realty Western Canada, based out of its office in Vancouver, hopes to expand into Whistler, West Vancouver, Victoria, Kelowna and Calgary by the end of this year. The company purchased Sotheby’s former B.C. affiliate, Premier Canadian Properties, and the latter’s owner is now heading up the specialty properties division (including private island and ranches) of Sotheby’s International Realty Western Canada. The company also operates two other divisions: development services (project marketing) and residential and recreational properties.
“Our model is to have our 5,000-square-foot head office, with all of the conveyancing, administration, and marketing functions held here in Vancouver, and then each office will be a 1,000- to 1,500-square-foot retail, high-visibility location. In West Vancouver, we’ll be on Marine Drive, and in Whistler we’ll be in the village,” says McCredie, CEO and president of Sotheby’s Realty International Western Canada. “We won’t be on the second floor. We won’t have 40 agents in a location. We’ll have four or six, whatever the market determines.”
The company is offering a 70/30 commission split to salespeople as independent contractors, and intends to own and operate all of its locations.
“In the past, a Sotheby’s listing through the affiliation had to be at a certain price point, the commission structure was crazy, and at the end of a day, it didn’t make sense to list an $800,000 home. Now, all of our listings become Sotheby’s listings – from a $400,000 ocean view condo up to a $20 million home,” says McCredie.
“There’s a template with Sotheby’s,” he says. “None of our agents do any of their marketing – we do all of the marketing for them. You won’t ever see our agent’s photo on the back of a bus. You won’t ever see superfluous adjectives all over the place, trying to describe magnificent views. You will see visually stunning images, the power of the Sotheby’s brand and accurate, intelligent information.”
Sotheby’s had already been active in the luxury property market since founding its international realty network in 1976, through affiliations with independent real estate companies in the U.S. and Canada. The company’s strategic plan changed dramatically a year ago, when Cendant Corporation, through its subsidiary NRT Incorporated, acquired Sotheby’s International Realty. Since then, Sotheby’s International Realty Affiliates has created a franchise network of some 19 firms, with more than 60 offices, in the U.S., Canada and France.
“We began awarding franchises just six months ago and already our network has gained a tremendous amount of strength and momentum,” says Michael Good, president and CEO of Sotheby’s International Realty. “It is an honour to enter into this alliance with Ross McCredie. We have every confidence that, under his leadership, the brand will achieve great success in the Western Canada markets.”
McCredie is hoping for wider success than just in B.C. and Alberta. He and his two silent partners are seeking to also purchase the master franchise rights for the rest of Canada.
“By taking our business model and bringing that east, I think there’s a huge opportunity because it is a unique and different model in Canada,” McCredie says. “I’m very aware of the hazards of going into a market like the east and thinking we could run it from here. We’re going to be a very boutique-styled, stealth-type operation when we go into the east. We don’t have the idea that we are just going to take over something or that we’re going to be huge – we aren’t. We’re looking to grow long-term; we’re looking to grow with individuals.”
