A week after its IPO, Compass announced on Thursday it would expand its services to Delaware with three of the state’s top teams.
After reigniting its expansion plans in October with an office in Hawaii, Compass is back on the move once again after completing its initial public offering on April 1.
“Compass is proud to call Delaware our newest home, and we’re humbled to welcome some of the most experienced and well-respected professionals from across the state,” Compass Pennsylvania, Delaware, and Southern and Central New Jersey Regional President Jeff Bedard said in a prepared statement on Thursday. “In such a strong real estate market, we look forward to bringing our tech-forward support to agents throughout the State of Delaware.”
The Mottola Group, Andrea Harrington & Associates, and The Andrew White Group will establish Compass’ market presence with 60 agents representing more than $260 million in 2020 sales volume collectively.
Andrea Harrington & Associates and The Andrew White Group serve buyers and sellers throughout Delaware, while The Mottola Group also serves clients in Pennsylvania, southern New Jersey, Maryland, and Florida.
The Mottola Group and The Andrew White Group will operate out of two offices in Greenville, while Andrea Harrington & Associates will operate out of their office in Bear.
“We are very excited to be part of Compass and take advantage of the technology and excellent services that they provide to agents and customers,” The Mottola Group Principal Agent Stephen Mottola said in the announcement. “We are thrilled with the ability to expand our group to support our clients in Naples and Palm Beach county areas while maintaining our core philosophy of exceeding client expectations in all of our existing local markets.”
“We remain committed to specialized and focused one-on-one client service while providing the best innovations that this new relationship provides.”
Compass halted its expansion plans in early 2019 when CEO Robert Reffkin announced the brokerage would instead focus on building its support staff, launching technology hubs, and accelerating its rollout of proprietary technology. However, in October 2020, Compass added Hawaii as its first new market in nearly two years.
The brokerage hit pause again while preparing for its March IPO, where they raised $450 million. The SoftBank-backed brokerage lowered its offering from a maximum of $936 million to $450 million the day before the IPO. However, Reffkin said he was pleased with the $450 million in funding, which will be used to fuel Compass’ growth goals.
The brokerage has remained relatively steady during its first week on the market (NYSE: COMP), with the price per share staying within the $20 to $17 range.
Real estate analyst Mike DelPrete said Compass’ debut reflects the brokerage’s dubious standing with investors, as they try to figure out if Compass is simply a swanky traditional brokerage or a true tech company.
“Between July 2019 and April 2021, many real estate and real estate tech stocks have seen massive gains, even traditional incumbents like Realogy and RE/MAX,” he said.”However, Compass stands out with a tiny 4 percent gain in valuation ($6.4B to $6.65B) over the past two years — two years which has seen massive growth at the company across all metrics.”
“The valuation discrepancy — especially compared to its peers — stands out loud and clear,” he added. “Investors either significantly over-valued the company in its previous fundraising rounds, or are pessimistic about its growth prospects going forward.”
However, DelPrete said there’s still plenty of growth potential for Compass as he places them beside eXp and Redfin as the next real estate leaders: “In 2018, it could have been possible to ignore the companies or dismiss their efforts to grow. But in 2021 they’ve become too big to ignore and are cementing — and growing — their leadership position in the future of real estate.”