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Warren Buffet buys Toronto asset firm Brookfield

Warren Buffet and friend (Bill Gates). The legendary investor has demonstrated faith in the US residential real estate market by expanding his brokerage holdings and now creating a new “super” brand, acquiring Toronto’s Brookfield Asset Management to do so. 

One of the world’s most famous investors has turned his attention to the residential real estate market, and Toronto’s Brookfield Asset Management is the latest object of his interest. Warren Buffet, the legendary “Oracle of Omaha,” whose Berkshire Hathaway company already owns HomeServices of America, is “partnering” with the Toronto private equity firm, a move that will double his real estate brokerage business. Brookfield owns the Prudential Real Estate and Relocation Services, as well as the Real Living franchise.

The new company will be known as Berkshire Hathaway HomeServices, with head office in Irvine, California. HomeServices is an umbrella company under which twenty-six realty firms now operate in more than twenty US states. The company had more than $32 billion in residential real estate sales in 2011. According to Bloomberg, managers at Buffet’s Berkshire Hathaway have been positioning the company to benefit from the recovering US home market.

Brookfield, meanwhile, has over $150 billion in assets, including real estate. The company says it has more than 75,000 real estate professionals in more than 2800 locations, who did over $150 billion in transactions in 2011. The Prudential Real Estate and Real Living Real Estate agents accounted for over $72 billion in residential sales in that year. Brookfield is listed on the New York and Toronto stock exchanges.

The Prudential and Real Living brands will disappear over the next few years under the terms of the deal. The chairman and CEO of HomeServices told the Associated Press that the strategy behind the deal is to create a single “super brand.” The Berkshire Hathaway HomesServices banner will now fly over all affiliates, giving the brand a dominant presence online.

In a release about the move, Brookfield says that the new franchise brand will benefit from the strength of the Berkshire Hathaway name, the operational excellence of HomeServices and the franchising experience of Brookfield.

Buffett himself said that the new franchise is “built upon the financial strength and leadership of Brookfield and HomeServices.” 

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