Aspen Real Estate

ASPEN, Colo.—Two of the valley’s largest real estate firms—Morris & Fyrwald Sotheby’s International Realty and Chaffin Light Real Estate—have merged. The new entity, called Aspen Snowmass Sotheby’s International Realty, is expected to be a dominant force—in terms of number of brokers and dollar volume—in the upvalley market.

The deal, finalized Tuesday, creates a company with seven offices and more than 130 real estate brokers in Aspen, Snowmass, and Basalt. The next largest real estate firm, Coldwell Banker Mason Morse has 60 brokers and six offices from Aspen to Glenwood, including one in Redstone.

Aspen Snowmass Sotheby’s International Realty will be governed by a board of directors, which includes partners Craig Morris, Ernie Fyrwald, Andrew Light, and Garrett Ruess. Ruess, who had a minor ownership stake in Chaffin Light Real Estate, was the managing broker of the Snowmass office, which is where the company started.

Prior to the merger, Morris and Fyrwald was for five consecutive years the leading local real estate firm in terms of dollar volume. In the past year, its 74 brokers closed more than $483.2 million in real estate sales, representing 17.5 percent of the total volume of the 30 firms in the Aspen-Glenwood Multiple Listing Service (MLS). Chaffin Light Real Estate, the number three firm in dollar volume, sold $282.5 million and had 10.3 percent of the market share from mid-February 2011 to mid-February 2012, according to the MLS.

The combined sales volume, $765.7 million is more than half of the $1.27 billion in real estate transactions in Pitkin County in 2011.

Asked what the advantage of merging Aspen’s leading real estate firm with another major local entity, Morris and Fyrwald co-founder Craig Morris said: “The name of the game in our business is exposure, market share.”

Informal discussions started in April of last year, when Andrew Light, another partner, bumped into Morris and Fyrwald co-owner Ernie Fyrwald after a Rotary meeting, Light said. Light also manages Chaffin and Light’s development interests in the valley and was the point person for the two families (of Jim Chaffin and Jim Light) on strategy for CLRE.

“For me the logic behind the deal is you have two companies with very little strategic overlap,” said Light. “Where they’re the market leader in Aspen, Chaffin and Light is the market leader in Snowmass and the midvalley.”

A second advantage is managerial and organizational. Mark Overstreet, president of Chaffin Light Real Estate, which includes 62 brokers and 20 employees, will serve as president of the Aspen Snowmass Sothebys firm. This frees up Craig Morris, a consistent top seller, to sell more and capitalizes on both their strengths.

“By combining specifically these two companies—we have synergies, the same goals, the same philosophies—by combing it puts us in a position to have superior management and marketing,” said Morris. “And the new company will be able to demonstrate its abilities far greater than anyone else is producing in this market.”

And for the Chaffin Light side of the organization, allying itself with the Sothebys name gives the firm some major technological tools for its web presence and digital marketing.

“I think being able to say we’re number one in all the markets and we have a great technical platform and a solid management team is going to be an attractive platform for brokers to work off of,” said Light.

The past few years have seen some consolidation in the local real estate industry, the largest until now being the Coldwell Banker and Mason Morse merger, which combined a 50-year-old company with broad local penetration with a nationally recognized brand. A few small firms folded during the economic downturn, which is how Morris and Fyrwald acquired the Sotheby’s franchise.

Craig Morris agrees that the merger of his company is to some degree a product of the times.

“The market has gotten tougher over the last few years and it makes it more challenging,” he said, adding that there were economies of scale to consider. “And not lonely does it help these companies bringing us together, but it gives us a platform to do a better job for our sellers.”

Local real estate attorney Bart Johnson, who was not in any way involved in the deal, observed that the merger was most likely not a sign of distress on the part of either company.

“The top brokers and companies have done just fine” through the downturn, Johnson said. “Some people are deciding that the future is in these large companies with tentacles reaching into ever corner of the market and with a lot of volume—and still doing marquee deals, still having good brokers. They’ve decided that bigger is better.”

For both firms, the concept of consolidation is not new, although the scale of this merger is.

Chaffin Light Real Estate, a consolidation of three separate companies, has been in business for more than 40 years. Majority owners Jim Chaffin and Jim Light bought a large part of Snowmass Village in 1978; as principal developers, they also acquired Snowmass Real Estate Company, which had been formed by Snowmass’ original developer several years earlier. In the late 1990s, Chaffin and Light acquired Chardonnay Real Estate, changed the name to Roaring Fork Real Estate, and set up shop in downtown Basalt with an expanded broker team. In 2002, they acquired Carol Ann Jacobson Realty, a 30-year-old Aspen firm, and established a toehold there.

The three companies merged under one new name, Chaffin Light Real Estate, in 2007. The Chaffin and Light families (Andrew is the son of Jim Light), also own and direct Chaffin Light Management, whose projects include the Sinclair Meadows subdivision in Snowmass Village and the recently approved Lift One Lodge in Aspen. Chaffin and Light, in different partnerships, also developed the Snowmass Club and the Roaring Fork Club.

Morris and Fyrwald was formed in 2000 by Craig Morris, who had been a broker for three years at the time, and Ernie Fyrwald, a 30-year local who owned Aspen Sports, which comprised of 18 ski shops between Aspen and Vail. The partnership was a fruitful one, as it grew it's market share in terms of sales volume fairly quickly.

Although it was the worst year locally for real estate, 2009 was a good one for Morris and Fyrwald. In February, the firm acquired the local franchise agreement for Sotheby’s International Realty, a worldwide luxury real estate brand associated with the renowned auction house, when Aspen Land and Homes closed and relinquished it. Then, REAL Trends, a company that analyzes real estate sales nationally, named Morris as being the top producing real estate broker in the country, with $177 million in real estate sales in 2009. That year, the firm he had founded had $425 million in sales, 19 percent of the market share.

Chaffin Light Real Estate President Mark Overstreet has also earned some accolades. REAL Trends recognized him in 2008 as being one of the top 10 brokers in the country. In 2007, Overstreet represented the Forbes’ family in selling their 171,000-acre ranch in south-central Colorado for $175 million, which is believed to be the highest price ever paid for personal property in the U.S.

Overstreet, who works on word of mouth only and generally outside the MLS system, said he is committed to making Aspen Snowmass Sotheby’s International Realty “the leading real estate enterprise in our valley. Our mission is to serve our customers in the finest manner, care for our employees in the highest measure, achieve enduring profitability and contribute back to our communities in meaningful ways.”

There are no immediate plans to make any changes to staffing or office locations for the combined firms, said Light and Morris, though both left the door open to changes in the future.

“Our plan is to blend the two companies and keep our current staffing in place, and as things develop and unfold with the new company, we will make those decisions,” said Morris.

Attorney Bart Johnson speculated that the merged company might look at consolidating its office space, or on the other hand might be looking to “build a bigger economic engine to create more steady cash flow to pay for the office space.”

And in terms of staffing, he made the analogy with big Wall Street mergers that focus on being the biggest and attracting the best people.

“The people who aren’t as productive might be looking for jobs after some amount of time,” he said, “although not sure if that will happen here.”