October 2, 2008
As the owners of Koenig & Strey real estate offices are set to change hands for the second time in nine years, buyers and sellers locally may not even notice, predicted former chief executive officer Ed Koenig, who lives in Glenview with his wife, Norma.
Koenig, retired from his namesake business Koenig and Strey. He made his comments as an outside observer regarding the announcement that Brookfield Residential Properties Services, a Canadian company based in Toronto, had entered an agreement to buy GMAC Home Services, parent company of GMAC Real Estate and GMAC Koenig and Strey, from GMAC Residential Holding Co. and Residential Capital. The sale is expected to close in three months.
“This is a local business and local people are working there.” he said. “Agents still talk about Koenig and Strey. They don’t talk about GMAC. Whether GMAC or Brookfield is the parent company, I don’t think that would matter.”
Having a Canadian company buy an American real estate company makes sense because of the relative weakness of the dollar, said Marki Lemons, a broker with Rubloff Residential in Chicago.
“For them, it’s a sound investment, but they are probably getting a discount,” she said about Brookfield buying GMAC Koenig & Strey.
Ed and Norma Koenig, along with Norma’s brother, Ed Strey, founded Koenig & Strey in 1961. At the time, Ed Koenig worked at International Harvester where he kept his job in the early years while the company was getting started.
Koenig credits Norma with much of the company’s success in launching.
“Norma was the one and only salesperson, along with her brother, Tom, who managed the Glenview office,” Koenig recalls.
Tom Koenig retired in 1985 and went into the development business.
The company grew from just one office in Glenview, closely followed by a second office in Wilmette, to 18 offices in the city and suburbs with more than 1,100 sales agents, according to a 2006 press release.
Then in 1999, the Koenigs sold their company to GMAC. Ed Koenig stayed on as chairman until 2006, when he retired at age 85.
“I was there observing, but not running the company,” he said.
Since he retired two years ago, Koenig said he has not been in touch with GMAC.
Ed Koenig and his son, Tom Koeng, and son-in-law Chris Eigel, also co-founded Windsor Mortgage, which still has a link on the GMAC Koenig & Strey Web site. But Tom Koenig and Chris Eigel are also both no longer involved in any of these businesses, Ed Koenig said.
Ed Koenig said he was not surprised to hear about GMAC selling its real estate businesses, “given the condition of the real estate market.”
For its part, GMAC Real Estate, a subsidiary of General Motors, was founded in 1998, with the purchase of the “Better Homes and Gardens Real Estate” brand. Some offices operated as franchises but Koenig and Strey offices were all run directly by the parent company, said Koenig.
During the last two years, GMAC Residential Capital suffered a serious drop in profits, with net losses of $2.7 billion for the six months ending June 30, versus a loss of $1.2 billion for the same period in 2007.
Reduced funding for mortgage-backed securities, increased foreclosures and a slowdown in the housing market all contributed to the need for GMAC to sell one of its subsidiaries, according to recent GMAC regulatory filings.
But Koenig said he has been around long enough to realize swings in the market are cyclical. “There’ll be a comeback,” he said.
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