Practically two weeks after mass agent layoffs and the closure of two places of work, controversial low cost brokerage REX has but to throw within the towel.
Practically two weeks after mass agent layoffs and the closure of two places of work, controversial low cost brokerage REX has but to throw within the towel. As a substitute of serving particular person patrons and sellers, the Texas-based firm has adjusted its focus to institutional patrons within the single-family rental market.
“[REX’s focus is] the B-to-B facet of the enterprise, which is to associate with various kinds of single-family rental firms,” REX co-founder and COO Lynley Sides informed Actual Tendencies, which broke the information on Monday. “We’re serving to [single-family rental companies] discover properties. We are attempting to assist them buy properties which can be of their purchase field.”
“It may be a problem for them discovering properties to buy,” she added of the chance to dive into the single-family rental market, which has grown hand-over-fist through the pandemic.
Regardless of stories that REX canned all of its brokers and a sizeable chunk of its help employees, together with account managers, gross sales specialists and others, Sides mentioned the brokerage has sufficient workers to dealer offers for institutional landlords in California and Florida.
The COO refused to share which landlords they’d be working with, their present agent rely and whether or not these brokers will hold their W-2 standing or be handled as impartial contractors. Nevertheless, she did say the fierce authorized battle with the Nationwide Affiliation of Realtors (NAR) and Zillow has compelled REX to take dramatic measures to remain afloat.
“I’ll say that the Zillow occasion was vital and a driver behind radically downsizing,” Sides informed RealTrends.
Sides’ interview with RealTrends comes on the heels of two weeks of damning information that led business members to imagine the brokerage was on the point of destruction. On Might 11, The American Genius reported an imminent shutdown after REX workers reported a second spherical of mass layoffs on LinkedIn.
“After 4 years as a distant Account Supervisor at REX actual property, a terrific start-up expertise, sadly, they made the exhausting choice to shut store… so I’m on the lookout for one other distant alternative if anybody wants me! I’ve expertise, only a exhausting, no-nonsense devoted employee,” learn one former REX worker’s put up, in keeping with a earlier Inman article.
The layoffs coincided with workplace closures in Austin, Texas, and Woodland Hills, California. Seven months prior, REX closed its places of work in New York Metropolis and Chicago amid a stunning announcement it had begun becoming a member of the organizations it had spent seven years eschewing — a number of itemizing providers (MLSs).
In a press release to Inman reporter Andrea Brambila, REX Normal Counsel Michael Toth mentioned the layoffs, workplace closures and different structural modifications have been “painful choices” as a result of their year-long antitrust battle with NAR and Zillow after the portal started separating non-MLS listings from MLS listings on its web site.
REX mentioned the change negatively impacted the site visitors to its listings and violated antitrust legal guidelines. NAR and Zillow filed a countersuit in opposition to REX; nevertheless, the courtroom tossed that go well with final month.
“REX was on path to disrupt the business for shoppers,” Toth mentioned. “Sadly, as alleged in REX’s federal lawsuit, when Zillow and NAR colluded to guard their earnings, REX’s modern enterprise mannequin was sacrificed. The business couldn’t tolerate client alternative. In consequence, we’ve needed to make a whole lot of painful choices.”
Regardless of the beating REX has taken, Sides, Toth and CEO Jack Ryan informed Inman on a number of events they gained’t again down from Zillow and NAR, they usually’ll proceed to navigate their enterprise choices with $10 million in latest funding on their facet.
The insurance coverage firm that underwrote the $10 million personal placement bond, PIUS, declined to say whether or not the funding spherical formally closed however remained upbeat about REX’s trajectory.
“[We] stay assured in REX’s know-how,” PIUS CEO Joe Agiato informed Inman in a earlier story.
“[The funding will] help REX’s continued enterprise development and market enlargement, together with each our know-how platform and residential purchaser providers, as we uphold our mission to ship a direct-to-consumer actual property answer for people throughout the nation,” Ryan mentioned on March 7.
E-mail Marian McPherson