Compass Faces New York Antitrust Inquiry Following $1.6 Billion Deal

According to a message reviewed by the publication, representatives from the Attorney General’s office have contacted executives at several major New York City brokerage firms seeking information related to Compass and its operations. The Attorney General’s office has not publicly announced an investigation, and a spokesperson declined to comment on the matter, according to a statement cited by The Real Deal.

The reported inquiry comes months after Compass completed its $1.6 billion merger with Anywhere Real Estate, a transaction that combined two of the largest residential brokerage companies in the United States. Anywhere is the parent company of several well-known real estate brands, including Corcoran, Sotheby’s International Realty and Coldwell Banker. The merger created Compass International Holdings, which now oversees a network of more than 340,000 agents and franchisees nationwide, according to company announcements and reports on the deal.

Industry observers had expected the merger to face significant regulatory scrutiny because of the combined company’s scale. The transaction united the nation’s two largest residential brokerages by sales volume and positioned the new entity as the largest real estate brokerage operation in the country. Reports at the time indicated the combined company would control a substantial share of residential home sales in several major metropolitan markets.

Despite those concerns, the merger cleared a key federal antitrust review period earlier this year and closed shortly thereafter. According to securities filings and company disclosures, the expiration of the Hart-Scott-Rodino waiting period removed one of the final regulatory hurdles for the transaction.

Questions surrounding the federal review process later resurfaced after The Wall Street Journal reported that Compass enlisted attorney Mike Davis, a lawyer closely aligned with President Donald Trump, to advocate on behalf of the merger. The Journal reported that Davis helped present the company’s case to Deputy Attorney General Todd Blanche and that efforts to pursue a more extensive review within the Justice Department’s antitrust division ultimately did not move forward.

The merger has drawn criticism from some lawmakers and antitrust advocates. In December, U.S. Senators Elizabeth Warren and Ron Wyden urged federal regulators to examine the transaction, citing concerns about competition, housing costs and market concentration in the residential real estate industry. Additional questions about the approval process were raised earlier this year by members of Congress seeking details about the Justice Department’s handling of the deal.

It remains unclear whether the reported New York inquiry is directly connected to the merger review or focused more broadly on Compass’ business practices and market share within the state. Neither Compass nor the New York Attorney General’s Office has publicly commented on the reported outreach to brokerage executives, according to statements referenced by The Real Deal.

Source: The Real Deal