A fledgling real estate brokerage has walked away with a prize affiliation that until recently belonged to the town's premier real estate player, Michael Saunders & Co.
It's a marketing tie-in with the world-famous auction house Sotheby's.
Two Saunders alumni, Chad Roffers and Brandyn Herbold, started Sarasota-based Sky Real Estate in January. The average sales price for their closed transactions is $750,000.
Changing the company's name to Sky Sotheby's International Realty, said CEO Herbold, "is a conscious decision to be platinum in this market."
For more than 20 years, Saunders held the exclusive right to market high-end properties of its choice through Sotheby's International Realty. Until this year, that entity was a loose affiliation of 220 real estate firms around the world, including 150 in the United States.
But the use of the Sotheby's name for real estate changed hands for $100 million in February. The new owner, the Fortune 500 Cendant Corp., has completely changed the Sotheby's real estate business model, converting it from a co-marketing plan into a real estate franchise, like Century 21 or ERA, but aimed specifically at the higher end of the market.
"When we took over in February we indicated to the current affiliates that the current affiliation system would end before the end of 2006," said Michael R. Good, president and chief executive of the new Cendant unit, Sotheby's International Realty Affiliates Inc. "Michael Saunders and I mutually agreed 60 days ago to terminate the relationship."
Saunders, president and founder of the Sarasota-based real estate firm that bears her name, said she carefully considered and rejected the new business model.
"We felt this new business model of having a Sotheby's sign on all priced properties really took away from the value of being part of Sotheby's," Saunders said Thursday. "We looked at alternatives to serve our market, and we have just been appointed as the Christie's affiliate. It is like the old Sotheby's used to be. You use their services for your very finest properties. The 125 real estate firms that are part of the network have $75 billion a year in sales. So they are serious about real estate."
Cendant, which owns the Coldwell Banker, Century 21 and ERA real estate franchise businesses, bought the rights to use Sotheby's name in real estate for the next 100 years, Good said.
Cendant also owns a group of 164 Florida Coldwell Banker Residential Real Estate offices based in Sarasota. Some of them, such as Coldwell Banker Previews on Longboat Key and St. Armands Key, specialize in high-end properties. But within the larger Florida organization's 8,000 Realtors are many others who specialize in high-end real estate too.
"It might be interesting to call the Coldwell Banker agents in the upper end of the market and ask them how they feel about Cendant bringing Sotheby's into the marketplace," Saunders suggested.
With 430 agents at 14 offices covering Sarasota, Manatee and Charlotte counties, the Saunders firm has handled $2 billion worth of transactions already this year. While the company deals in a wide range of residential and commercial properties, Saunders's top agents specialize in high-end residential.
Saunders estimates that her firm participates in "at least six out of 10 of the properties over $3 million in this market."
Christie's Great Estate properties are featured on a Web site, www.christiesgreatestates.com; Sotheby's are at www.sothebysrealty.com.
Sotheby's International Realty Affiliates Inc. has begun creating a global network in high-end real estate, using a combination of companies from the old network plus fresh recruits in luxury markets, such as Sky.
Under the new setup, the real estate firms involved will have Sotheby's as part of their name, and will turn to Sotheby's International Realty for guidance in business issues, leads and referrals.
Sky joins a small but growing group of companies that have either made the jump from the old Sotheby's to the new, or are fresh recruits.
Others who have become early converts are French and French Fine Properties Inc. in Sante Fe, N.M.; Poston Properties in Dallas; Williamson Group in Woodstock, Vt.; and Peak's Realty in Telluride, Colo.
Good said the market itself must qualify for being part of the network before he considers applications from a brokerage firm within the market.
"For a market to qualify, its average price must minimally be 50 percent above the national average," he said.
The strategy for expanding the new franchise in Florida "will for the most part be along the coasts," he said.
Sotheby's and Christie's are the two best-known auction houses in the world for fine art and antiques.
Sotheby's founded its real estate business in 1976 to help clients buy and sell luxury homes and resort properties.
Christie's followed suit with Christie's Great Estates in 1995 and now has the largest network of real estate brokers marketing "important properties."