Sotheby’s International Realty Network Reports Significant Gains for 2015

MADISON, N.J. (Feb. 25, 2016) – Sotheby’s International Realty Affiliates LLC today reported that in 2015 its affiliated brokers and sales professionals achieved approximately $80 billion in U.S. home sales volume (transaction sides multiplied by average sale price). Driven largely by a brand record of over 100,000 total transaction sides, this is the highest annual sales volume performance in the history of the brand and marks a 13% increase from the prior year.

Global Growth

The Sotheby’s International Realty brand also reported growth in its global network, which now encompasses 63 countries and territories worldwide. At year-end, the network totaled 835 offices, a gain of nearly 10%, and more than 18,800 sales associates, up 14%.

“2015 was a record year for domestic franchise sales for the Sotheby’s International Realty brand,” said Philip White, president and chief executive officer, Sotheby’s International Realty Affiliates LLC. “This year alone, we have also added 12 international, independently owned and operated affiliate brokerage locations to our global network, which will drive accessibility to the increasing level of international buyers in key luxury markets.”

Outside the United States, the Sotheby’s International Realty brand continued to expand into key markets in 2015. The entire Gulf Region is poised for significant growth as the brand’s affiliate brokerage in the region, Gulf Sotheby’s International Realty, acquired the rights to deliver real estate services in Bahrain, Kuwait, Oman, Saudi Arabia and Qatar. The brand saw continued growth entering the countries of Chile, Finland, Ireland, The Netherlands, and Nicaragua, while expanding its presence in Italy, Queensland, Australia and in Buenos Aires, Argentina.

The Sotheby’s International Realty brand also added five independently owned and operated residential real estate firms and 73 new offices to its network across the United States. This past year witnessed continued growth by existing affiliate companies through mergers, acquisitions and recruiting. Notable transactions included the coming together of three companies in Vermont and New Hampshire that resulted in one of the largest operators in those states under the Four Seasons Sotheby’s International Realty banner, and the acquisition of South Bay Brokers in Manhattan Beach by Vista Sotheby’s International Realty. Several key open markets were also filled, namely: Baltimore, Md.; Block Island, R.I.; Charlottesville, Va. and Portland, Ore.

Last year The Wall Street Journal/REAL Trends “Top Thousand” ranked agents based on average sales price, recognizing the success of agents that specialize in the luxury real estate segment. The Sotheby’s International Realty brand had 75 of the top 250 (30%) individuals by average sales price. This achievement is reflective of the success of our efforts to further establish the brand as the voice of luxury.

Sotheby’s International Realty Affiliates LLC 175 Park Avenue Madison, NJ 07940

In 2016 and for the ninth year in a row, the Sotheby’s International Realty brand won Franchise Business Review’s Best in Category for Real Estate Franchisee Satisfaction award. In addition to its real estate ranking, the brand also came in fourth in the overall top 50, and second among the Top 50 “Systems with 250 or more units,” which is a ranking of all franchise systems across all categories with more than 250 locations.

The Sotheby’s International Realty brand hosted several international networking events throughout the year exemplifying its truly global reach. An event in Rome brought together 27 affiliated companies from 19 countries within the European, Middle Eastern and African region while another event in Rancho Palos Verdes, California had representation from over 113 affiliated companies worldwide. “Our international footprint is the cornerstone of our global esteem and our events around the world serve as a platform for our network to work together while developing relationships to increase referrals and share best practices on the exclusive line of Sotheby’s International Realty products to better serve their clients’ needs and meet their business goals,” said White.

Marketing

From a marketing perspective, the brand’s 2015 campaign delivered more than 1.2 billion impressions. At the core of the Sotheby’s International Realty 2015 strategy was its relationships with pre-eminent media powerhouses in both print and online arenas to showcase unique properties from the brand’s worldwide network including: The New York Times, The Wall Street Journal, Architectural Digest, Bloomberg, Financial Times and as the exclusive real estate partner for Dwell.com.

To mark the 40th year of Sotheby’s International Realty in the luxury residential real estate brokerage business, Philip White and Wendy Purvey, chief marketing officer, were joined by honorary guests of the Sotheby’s International Realty brand to ring the Closing Bell at the New York Stock Exchange on December 29, 2015. Additionally, the brand was featured with prime placement on the New York Stock Exchange video banner in Times Square. Running the entire month of December, the video was shown 15 times per day, reaching over 1.6 million daily visitors to Times Square and highlighted the brand’s lifestyle focus and drove viewers to sothebysrealty.com for more information.

Finally, the Sotheby’s International Realty brand’s website, sothebysrealty.com, was re-launched in 2015 to provide a fully immersive, responsive, video-based experience with unique content. With a focus on creating the best possible user experience, the new sothebysrealty.com continues the brand’s tradition of revolutionizing luxury real estate in the digital space. Last year the site saw the most traffic in its history with 14 million visits, a 30% increase year over year. The new Sotheby’s International Realty, website was recognized by the Web Marketing Association with the “2015 Outstanding Website WebAward” and by W3 with the “2015 W3 Gold Award.”

Sotheby’s International Realty listings are marketed on the sothebysrealty.com global website. In addition to the referral opportunities and widened exposure generated from this source, each brokerage firm and its clients benefit from an association with the Sotheby’s auction house and worldwide Sotheby’s International Realty marketing programs. Each office is independently owned and operated.

About Sotheby’s International Realty Affiliates LLC

Founded in 1976 to provide independent brokerages with a powerful marketing and referral program for luxury listings, the Sotheby’s International Realty network was designed to connect the finest independent real estate companies to the most prestigious clientele in the world. Sotheby’s International Realty Affiliates LLC is a subsidiary of Realogy Holdings Corp. (NYSE: RLGY), a global leader in real estate franchising and provider of real estate brokerage, relocation and settlement services. In February 2004, Realogy entered into a long-term strategic alliance with Sotheby’s, the operator of the auction house. The agreement provided for the licensing of the Sotheby’s International Realty name and the development of a full franchise system. Affiliations in the system are granted only to brokerages and individuals meeting strict qualifications. Sotheby’s International Realty Affiliates LLC supports its affiliates with a host of operational, marketing, recruiting, educational and

business development resources. Franchise affiliates also benefit from an association with the venerable Sotheby’s auction house, established in 1744. For more information, visit www.sircaymanislands.com. 

InterContinental Hotels Group buys Kimpton Hotels

In an announcement that will effect the latest hotel being built by DART on Grand Cayman's Seven Mile Beach, United Kingdom hotel chain InterContinental Hotels Group has has agreed to acquire United States-based boutique hotel specialist Kimpton Hotels & Restaurants for $430 million in cash and a short-term debt facility.

Talking to Hotel News Now, Richard Solomons, IHG’s CEO, said the deal would close in early 2015 and is “bang in line with our strategy of using surplus capital at this point in the market and when the right acquisition comes along.”

“It is a perfect fit, in which the market is strong and we are strong,” Solomons said, who dismissed recent shareholder activism requesting that IHG be sold as “a little bit of noise.”

The $430-million price tag “was not cheap,” he said, “but quality never is.”

“Kimpton’s portfolio has been developed in some of U.S.’s highest (revenue-per-available-room markets), where RevPAR is $180-plus, with 80% occupancy, which will make Kimpton IHG’s highest RevPAR brand, higher than InterContinental*,” Solomons said earlier during a webcast announcing the deal.

“It also helps us to fill white space in the upper-upscale segment at the top end of our portfolio,” he added.

“The deal, I believe, makes a lot of sense to owners. Our goal is to create win-win situations, and this is one,” Solomons told HNN.

Running San Francisco-based Kimpton will be current COO Mike DeFrino, while CEO Michael Depatie, according to Solomons, will be one of four existing Kimpton executives to run the Kimpton Real Estate Investment Fund.

The fund owns 30% of the existing portfolio and five of its pipeline properties. Further proceeds will be used to make future investments in Kimpton-branded hotels, according to IHG’s director of global corporate communications Zoë Bird.

“Mike DeFrino has been at Kimpton for 20 years and effectively runs it, while Depatie has increasingly been involved in the fund, so it makes sense going forward to organize it in that way,” Solomons said, adding that Oliver Bonke, IHG America’s chief commercial officer, who came to IHG in September 2013, would work closely with DeFrino to protect the Kimpton brand and to help bring IHG power to bear.

As to how the new, enlarged hotel company infrastructure will change—whether, for example, Indigo and wellness-focused Even will sit beneath Kimpton and whether any platforms will be transferred from IHG’s American base in Atlanta to San Francisco—Solomons said it is too early to say.

“It’s something we will work on. We will think about it all as a bigger business, as it now is bigger, and as there is a lot of commonality,” he said.

Not small anymore
Kimpton, established in 1981, has 62 hotels, all under management contracts and comprising approximately 11,300 rooms in 28 cities; a pipeline of 16 properties with approximately 3,000 rooms and constituting 27% of the overall portfolio; 1.6 million loyalty members; and 71 hotel restaurants and bars.

IHG franchises, leases, manages or owns more than 4,700 hotels and 697,000 rooms in nearly 100 countries, with almost 1,200 hotels in its development pipeline. The chain’s IHG Rewards Club comprises more than 82 million members worldwide.

IHG’s Indigo brand and Kimpton now possess a combined portfolio of 197 properties open or in the pipeline.

During the webcast, Solomons said Kimpton was one of the few hotel companies IHG had considered for acquisition.

“Kimpton saw that it needed a scale player to take it to its next phase of growth, and its new scale will provide immediate benefits for owners and earnings-enhancement in the first year,” Solomons said.

Paul Edgecliffe-Johnson, IHG’s CFO, also speaking on the webcast but from London, added that Kimpton executives did run a process through its owners when IHG was first in discussion with it, but they realized they needed help if they wanted to go global.

All of Kimpton’s hotels and restaurants are in the U.S., and its food-and-beverage component is of particular interest, with Kimpton considered a leader in the hotel-restaurant business.

Solomons said Kimpton’s F&B would be leveraged across the IHG portfolio.

Kimpton would see more international growth under IHG ownership, but there would be more in the U.S., too, Solomons said. In Kimpton’s current pipeline is one property in the Cayman Islands that Solomons said is not due to open until late 2016 or early 2017.

Solomons said he wants Kimpton to expand carefully, knowing the brand genuinely provided something special for the marketplace. IHG values what Kimpton has and had done, he told HNN, and executives will work to protect Kimpton’s brand integrity.

A behemoth such as IHG taking over a relative minnow such as Kimpton was more about understanding the value of that brand, not about its size, he said. Owners would understand that IHG knew why they had bought into Kimpton and what they liked about it, Solomons added.

“We genuinely respect (Kimpton) and share similar culture and values. That might sound a bit soft, but it’s true and about driving returns for owners. It’s an interesting conundrum, but we know a lot of the owners already. Their business will evolve because of IHG’s part but also because the world is changing,” Solomons added.

That growth could occur in Europe and Asia, Solomons hinted.

“(Kimpton) would work very well there. We know that the demand is there,” he said.

Financials
IHG stated that the merger would almost double Kimpton’s earnings before interest, tax, depreciation and amortization to $39 million for year 2017, achieve returns above IHG’s cost of capital by the third year after closing and that for U.S. tax purposes, the transaction, constituting an asset sale for both vendor and purchaser, will result in a reduced tax bill of $160 million.

Solomons also said the boutique company’s existing pipeline had not been built into its EBITDA predictions.

In response to a question from analyst Tim Ramskill from Credit Suisse during the webcast, Solomons said his EBITDA projections derived from future pipeline, strong growth and back-of-house synergies.

“There also is the ability to lower online-travel-agency sales, but that was not the principal part of the deal,” he said.

“The Kimpton funds have generally developed properties and then sold them off, but they have lost only a couple of properties from the platform in its entire history,” Solomons added.

Solomons also said Kimpton’s management contract model would likely stay, and while IHG would look at franchising, it was something that would not be looked at urgently. IHG’s last calculation that capital expenditure would be approximately $350 million a year also would not change due to this news.

Poland Sotheby's International Realty

We are increasing our global footprint. Welcome to the family Poland Sotheby's International Realty.

Sotheby's International Realty Affiliates LLC today announced that leading Polish real estate firm Park House in Warsaw has joined its luxury real estate network and now will operate as Poland Sotheby's International Realty.

The firm is managed by Arkadiusz Wojciechowski and Piotr Sliwka, who signed an exclusive 25-year master franchise agreement to develop the Sotheby's International Realty® brand throughout Poland including the luxury residential real estate markets in Warsaw, Crocow, Wroclaw, Poznan and Lodz.

"Expansion across Europe continues our commitment to providing access to the Sotheby's International Realty network's exclusive real estate services in key cities around the world," said Philip White, president and chief executive officer, Sotheby's International Realty Affiliates LLC.  "This affiliation, which strengthens the brand's presence in Europe, offers entrance into the famous capital city of Warsaw.  I was proud to attend the Warsaw launch of Poland Sotheby's International Realty in person, and am delighted that a global clientele will now have access to the brand in this historic part of the world."

According to Wojciechowski, the firm was created to fulfill the needs of highly discerning clients searching for extraordinary real estate and requiring a high quality of service. "It is vitally important for our team to ensure that we understand our clients' needs and to deliver efficient and personalized services with professionalism and confidentiality," he said.  "The Polish real estate market is unique in that it is focused on a number of key cities with an array of high-end apartments and luxury developments, as well as spacious residences in the surrounding popular suburban towns and villages. Now with the support of the Sotheby's International Realty brand we can bring Poland's extraordinary and unique properties to the far-reaching corners of the world."

The Sotheby's International Realty network currently has over 15,000 sales associates located in approximately 720 offices in 52 countries and territories worldwide.  Poland Sotheby's International Realty listings will be marketed on thesothebysrealty.com global website.  In addition to the referral opportunities and widened exposure generated from this source, the firm's brokers and clients will benefit from an association with the Sotheby's auction house and worldwide Sotheby's International Realty marketing programs.  Each office is independently owned and operated.

India welcomes Sotheby's International Realty

Sotheby’s International Realty Affiliates LLC today announced it has signed an agreement with RealPro Infra Private Ltd. to develop the Sotheby’s International Realty® brand in North India with the opening of North India Sotheby’s International Realty.

Amit Goyal is co-owner and chief executive officer of the firm, which will serve the luxury residential real estate market throughout Northern India.  The first office begins operations in September 2014 in New Delhi followed by Gurgaon, Noida, Chandigarh and Jaipur. 

“Northern India is one of the most exciting, beautiful and fastest growing markets in the world, with a developing luxury real estate market,” said Philip White, president and chief executive officer, Sotheby’s International Realty Affiliates LLC.  “Expansion into India was one of our core objectives for this year, and I am proud to welcome Amit and his team to our global network.”

“We are delighted to become part of the Sotheby’s International Realty worldwide network,” said Goyal.  “The luxury residential real estate market in India is beginning a period of expansive growth and the Sotheby’s International Realty brand will meet the needs of high net-worth individuals internationally looking for luxury homes in India and overseas using the brand’s global platform. We also envision future appointments of exclusive representation of luxury residential properties.  India’s luxury residential market is poised to grow rapidly, supported by strong economic growth, and we are in an ideal position to lead this growth by leveraging the Sotheby’s International Realty global platform.”

The Sotheby’s International Realty network currently has more than 15,000 independent sales associates located in approximately 720 offices in 52 countries and territories worldwide.  North India Sotheby’s International Realty listings are marketed on the sothebysrealty.com global website.  In addition to the referral opportunities and widened exposure generated from this source, the firm’s brokers and clients benefit from an association with the Sotheby’s auction house and worldwide Sotheby’s International Realty marketing programs.  Each office is independently owned and operated.

Belize Sotheby's International Realty, welcome!

The Breakers Palm Beach - Represented SIR offices from Belize, Cayman Islands & Houston

Sotheby's International Realty Affiliates LLC today announced its luxury real estate services are now available in Belize with the opening of Belize Sotheby's International Realty, owned and operated by McCann & Fisher Ltd.

The firm, which is managed by Shane and Brittany McCann, serves the luxury residential real estate market throughout Belize and is located at Barrier Reef Drive in San Pedro, Ambergris Caye.

"Ambergris Caye is considered one of the most desirable islands in the world," said Philip White, president and chief executive officer, Sotheby's International Realty Affiliates LLC. "The lifestyle offered there is coveted by people everywhere. Belize is home to the second largest barrier reef in the world, ancient Mayan Ruins, water falls, caves and the well-known Great Blue Hole. We are proud to be able to offer our services in this beautiful and unique market."

According to Brittany McCann the affiliation with the Sotheby's International Realty(R) brand will help achieve their goal of raising the bar in Belize's real estate market. "We also want to help promote the economic growth of our country, and we believe the Sotheby's International Realty brand will help change the dynamics of the real estate market in Belize," she said. "Our company has raised the standards of service and ethics here in the property and rental management field, and this has set us apart from other real estate groups in the country. It is our mission to be the best in the industry and build a team of knowledgeable professionals, and we will continue this as we grow with the brand."

The Sotheby's International Realty network currently has more than 15,000 independent sales associates located in approximately 700 offices in 54 countries and territories worldwide. Belize Sotheby's International Realty listings will be marketed on the sothebysrealty.com global website. In addition to the referral opportunities and widened exposure generated from this source, the firm's brokers and clients will benefit from an association with the Sotheby's auction house and worldwide Sotheby's International Realty marketing programs. Each office is independently owned and operated.

Sotheby's International Realty offices throughout the Caribbean.

Caribbean Air fares to fall for UK flights

Great news for those traveling from the UK to the Cayman Islands by air, as the Chancellor George Osborne today announced the abolition of Air Passenger Duty bands C and D in his Budget.

The move, which will benefit frequent travellers to Asia Pacific and South America, will see all long-haul flights shift into band B and comes into effect on April 1, 2015.

Currently, APD is calculated according to the distance between London and the destination country's capital city.

This leaves travellers heading to say, the Caribbean, being charged £330, while those who travel an additional 2,500 miles to Hawaii actually pay less at £270.

Today's announced change means that all long-haul flights will now carry the same tax as a flight to the US. And private jets will no longer be exempt from the levy.

Virgin Atlantic said in a statement: "A two band APD rate is a very welcome simplification to remove some of the biggest distortions of the current system, which the Chancellor himself admitted is crazy and unjust.

"The Government has rightly recognised the damage APD is having on exporters and the travelling public alike.

"A tax system which penalised high growth emerging economies such as China and India was always contrary to the Government's stated policy on trade and exports, so this is a positive step that recognises the impact of this economically damaging tax.

"There is a growing body of evidence demonstrating the huge economic benefits to the UK of reducing or abolishing APD and we hope that the Government will continue to go further in the long run."

Dale Keller, chief executive of the Board of Airline Representatives in the UK, said: "The Government has finally acknowledged what the industry and business knew all along – that the highest rates of aviation tax in the world were a brake on driving the UK's economic growth with emerging markets.

"Of course we would like the Chancellor to go further still on reducing APD but this is a step in the right direction and BAR UK will continue its engagement with the Government to deliver the fair and proportionate aviation tax that the UK deserves."

Belgium opens door to Sotheby's International Realty

Sotheby's International Realty today announced its luxury real estate services are now available in Belgium with the opening of Brussels Sotheby's International Realty.

The firm, which is managed by David Chicard, serves the luxury residential real estate market throughout Brussels and Wallonia.

"Expansion across Europe continues our commitment to providing access to the Sotheby's International Realty network's exclusive real estate services in key cities around the world," said Philip White, president and chief executive officer, Sotheby's International Realty Affiliates LLC.  "This affiliation, which strengthens the brand's presence in Europe, offers entrance into this famous and strategically important Belgian capital city. We are very pleased that a global clientele will now have access to the brand in this historic and beautiful part of the world."

According to David Chicard, it is the team's goal to deliver efficient and personalized services with professionalism and confidentiality.  "As the headquarters of many European institutions, Brussels is often considered something of a capital for the European Union," he said.  "Being at the crossroads of cultures and playing an important role in Europe, Brussels fits the definition of the archetypal 'melting pot,' but still retains its own unique character.  Brussels has a population of about 1.2 million, and its metropolitan area is just over 2 million.  Our focus is on providing comprehensive service at every stage of the process.  The quality of our service is based on detailed knowledge of the market and its dynamic, precise and proven procedures, and a motivated, responsible and skilled team. Now with the support of the Sotheby's International Realty brand we can bring Brussels' extraordinary property to the far-reaching corners of the world."

The Sotheby's International Realty network currently has nearly 14,000 sales associates located in approximately 680 offices in 49 countries and territories worldwide.  Brussels Sotheby's International Realty listings will be marketed on the sothebysrealty.com global website.  In addition to the referral opportunities and widened exposure generated from this source, the firm's brokers and clients will benefit from an association with the Sotheby's auction house and worldwide Sotheby's International Realty marketing programs.  Each office is independently owned and operated.

About Sotheby's International Realty Affiliates LLC Founded in 1976 to provide independent brokerages with a powerful marketing and referral program for luxury listings, the Sotheby's International Realty network was designed to connect the finest independent real estate companies to the most prestigious clientele in the world. Sotheby's International Realty Affiliates LLC is a subsidiary of Realogy Holdings Corp.RLGY +0.82% , a global leader in real estate franchising and provider of real estate brokerage, relocation and settlement services.   In February 2004, Realogy entered into a long-term strategic alliance with Sotheby's, the operator of the auction house.  The agreement provided for the licensing of the Sotheby's International Realty name and the development of a full franchise system. Affiliations in the system are granted only to brokerages and individuals meeting strict qualifications. Sotheby's International Realty Affiliates LLC supports its affiliates with a host of operational, marketing, recruiting, educational and business development resources. Franchise affiliates also benefit from an association with the venerable Sotheby's auction house, established in 1744. For more information, visit www.sothebysrealty.com .