Vancouver-based McCredie Investments has completed the purchase of Sutton Group Realty Services Ltd. with plans to aggressively grow the brand throughout the country.
Sutton Group is a Canadian-founded brokerage operating 200 offices nationwide with a team of over 6,000 agents and annual sales volume surpassing $35 billion. There are about 115 franchise owners across Canada.
Ross McCredie, principal of McCredie Investments — a boutique investment and advisory firm focused on “cutting-edge real estate services and technology” — confirms the deal closed this week.
About the response, he says, “(It) has been pretty amazing. Every company I’ve bought in the past I’ve worked with the current owners. In this case, I couldn’t really do that. I’ve bought a number of companies in California where you work with the ownership and you do the transition. I said to my wife when we bought Sutton Group, I felt like I bought a barn but I didn’t know if there was anything inside the barn or not,” McCredie, now president and CEO of Sutton Group, explains.
A solid track record
Aside from founding McCredie Investments, McCredie brings a track record and depth of expertise to lead Sutton Group into the future — including as founder of Sotheby’s International Realty Canada and RealWealth, co-founder of Dundee 360, former chief global strategist of Pacific Union and CEO of its subsidiary, and more.
“When I owned Sotheby’s, we really grew fast when the market slowed down a little bit. The Canadian real estate market has obviously slowed down quite a bit and that’s when agents and franchise owners start to look at other options. So for me, it was very opportunistic from a timing point of view to buy (Sutton Group) than anything else,” says McCredie, who brought Sotheby’s to Canada in 2004, then opened the first office in Vancouver and 40 offices across Canada before selling the brand to Dundee Corporation in 2015.
“It was a great opportunity”
“COVID hit and I had a company in California that we just sold … I live in Vancouver. I kind of love where I live. So, when the opportunity came up to actually buy a Canadian national brokerage, I just decided it was a great opportunity because, with Sutton, not much has been done with the brand for the last 15 years. The former owners really hadn’t invested in the brand,” McCredie continues.
His thinking was to re-energize the brand by bringing in some technology — which, he points out, hadn’t been done much.
Technology partnership opportunities — gap in Canada
McCredie feels the Canadian marketplace is behind the U.S. when it comes to technology in real estate: “The Canadian marketplace, I would argue, compared to the U.S. corporations and brokerages, they’re pretty outdated. I’ve worked for the past 10 years in the U.S. Compass alone spent over $1 billion on its technology suite. I really think there’s an opportunity to partner with big technology companies to bring data and tech into the Canadian real estate market.”
One thing McCredie has always been surprised about is that “Homeowners in Canada have access to the worst real estate information of any G7 country in the world. For example, in the U.S., people can find out a lot of information related to a house they might want to purchase, everything to the number of times the police may have shown up to a certain home.
This is the most important transaction a lot of families make but, in Canada, we rely on really bad information, and a lot of time that information is put in by a real estate agent or someone like that, so it’s not verified,” he points out.
Significant growth expected
McCredie expects to see significant growth for the Sutton Group brand.
“The feedback has been pretty overwhelming … It’s one thing to invest the money to buy the company, but we’re looking to spend double that to refresh the brand. We’re already building a new website, we’re building a lot of technology suites into it (and) working with major groups across Canadian and American data companies to start bringing access to verified data and information to the Canadian consumer and a Sutton distribution of 6,000 agents across the country to start with. That’s really the caveat to why I bought Sutton. It was a huge opportunity to have an existing infrastructure and distribution for an enhanced platform,” he explains.
McCredie feels more collaboration is inevitable: “It’s just a matter of time before real estate transactions and management of real estate assets become much more transparent, and homeowners work together with their real estate agent and other fiduciaries, like their accountant and their lawyer, to do a much more seamless transaction.”
He says the current management of Sutton Group will remain in place and he will be tripling the size of its head office immediately. “We’re going to triple the investment in the company. We’re going to change the way we actually interact directly with the franchise owners and the agents across Canada.”
As for the transaction itself, McCredie says it was private, and financial details will not be disclosed.
Setting up for success
Sutton Group has been around for 40 years which the company’s vice president of operations, Rick Taron, says is a big deal. “Up until Ross showed up on the scene, the same two (Vancouver) guys owned it … Scott Shaw and Lance Tracey. They’ve had a good run with this thing,” Taron points out.
“I think the new, fresh blood that Ross is going to bring into the organization is going to be a tremendous boost for everybody. Originally, Scott and Lance were innovators of their time, back in 1983, and they brought in a lot of technology and (other) stuff. They were the ones who started a lot of this over the years. But, from what I’ve learned about Ross, he’s got a big background in technology and that’s where we’re going to be putting a lot of effort and focus.”
“We’re going to hire more people … tap into different parts of the market … He’s doing everything he’s supposed to do”
Taron believes Sutton Group will continue to grow, and that the brand is strong — it’s just been stagnant.
“We just need to have some fresh blood and make this thing hum. If we didn’t have a desire to grow, then I don’t know what Ross is thinking of doing because we would just flounder. I know we’re going to hire more people. We’re going to try to tap into different parts of the market. Plus, with the stuff that he’s going to bring in with his background, I think that will bring people along as well. I’m told there are all kinds of people contacting Ross and asking questions about the brand. That by itself is huge,” he explains.
Taron says the company is expecting very positive changes going forward and feels they’re on the right track since McCredie will be hands-on.
“He’s doing a whirlwind tour across Canada, trying to meet everybody and make the phone calls. He’s doing everything he’s supposed to do. That by itself is a big deal. The things that we add to it, the technology and the new services we’re going to put together, that’s just going to be a bonus to us.”