Keller Williams might spark a trend of brokerages to tap private equity

I think this is the beginning,” said John Heithaus, chief security officer at Ocusell. “People are recognizing that there’s some players that are better equipped for the future. There’s lots of brokerages they could be dancing with, but they chose this one for a reason.”

Brokerages that are struggling may be waiting until the housing market recovers to make changes to their businesses, but that is looking less likely in the near term. While they’ve dropped recently, mortgage rates remain at relative highs. Home sales are at historic lows and economists are bearish on inflation easing due to President Donald Trump‘s positions on tariffs.

Another factor is that large brokerages have also seen their coffers drained by settlement payments on class-action antitrust lawsuits that have ensnared the industry. This has made in-house investments to change their operations more difficult.

These conditions might prompt other brokerages to court outside investments, mergers or acquisitions.

“There’s a bunch of public brokerages and franchise organizations in the marketplace today, and it gives them impressive banking relationships,” said Victor Lund, managing partner at the WAV Group. “It allows you to take an industry which is highly cyclical and flatten it out because you have good bankers. The company can operate consistently despite market iterations to maintain their position in the market without over-leveraging a sole proprietor.”

Like a lot of legacy brokerages and franchisors, Keller Williams has been losing agent count and teams to newer players such as Compass, The Real Brokerage and Fathom Realty, whose agent counts have risen dramatically in recent years.

Since peaking in the third quarter of 2022 at 177,377 agents, Keller Williams’ head count has dropped by 13.3%. Conversely, agent counts at Compass (+29.5%), Real (+224.9%) and Fathom (+23.9%) have exploded during the same period.

Despite the decline, Keller Wiliams still boasts one of the highest agent counts in the business. And it maintains a brand that industry sources say still has a lot of equity, which likely made it attractive to Stone Point.

“Keller Williams is a very successful brand,” said Jeremy Crawford, president and CEO of First MLS. “They do very well as far as market share. Having private equity behind brokerages seems to be more frequent right now, and Stone sees a long, profitable future ahead for Keller Williams.”

Stone Point isn’t new to the real estate space. The firm took a stake in Lone Wolf Technologies in 2020 and it acquired CoreLogic in 2021 with the goal of taking it public later. It also currently has stakes in CREA, Meridian Capital Group, Rialto Capital and Hyphen Solutions, among others.

Lone Wolf CEO Jimmy Kelly said that Stone Point acts as a type of strategic partner in Lone Wolf’s operations.

“My team puts together what that strategy is, and then we leverage our relationship with Stone Point to make sure that we’re not missing something based on their experience in the space,” he said. “They’ve been a really good partner from that perspective.”

Some of the largest private equity firms in the U.S. have expertise in real estate — most notably Blackstone, Brookfield Asset Management and Apollo Global Management — so there’s no shortage of potential suitors for brokerages.

Which brokerage is next to get a boost from private equity is anyone’s guess, but legacy brokerages that want the financial breathing room to retool their operations could attract interest from outside investors.

Whispers about the future of Redfin have grown louder of late, particularly after a financially subpar 2024. For the year, Redfin’s revenue rose by 7%, but its net loss from operating activities was $32.3 million. 

The company’s agent count peaked at 2,750 in the first quarter of 2022 but has since fallen to a quarterly average of 1,765 in 2024. It should be noted that many brokerages got a swell of new agents during the hot post-pandemic housing market.

RE/MAX’s agent count has fallen from its 2019 peak of 63,121 to 51,286 at the end of 2024. Its operating activities have fared much better than Redfin’s as it produced $59.7 million in net cash in 2024, although its revenue dropped by 6%.

Anywhere Real Estate’s agent count has dropped from its post-pandemic peak of 198,900 to 182,100 today. It’s net cash from operating activities clocked in at $104 million for 2024, although that’s a substantial drop from $187 million in 2023.

These are public companies, and taking a public company private is a lot different than a firm making investments in a private company. Financials aren’t available for Keller Williams to compare them to others, and neither are the terms of Stone Point’s investment.

But while it’s hard to name names for what happens next, the conditions are undoubtedly present for similar transactions in the space. And while some may view the Keller Williams move as a negative, industry bigwigs believe it’s a good sign that a firm would double down in real estate.

“For these guys to be making a major investment in a business like that, they have to have a degree of confidence that they can make a difference,” Heithaus said. “I think it’s very bullish, and I have confidence that they’re going to succeed because they’re just good at what they do.”