Our Clients


Negotiating and structuring a complicated acquisition


Sherin and Lodgen LLP was asked to structure a sound yet creative transaction, allowing its client – a partnership of real estate professionals in the high-end segment of a major metropolitan market – to repurchase a residential real estate brokerage it sold 10 year ago to a financial-services conglomerate that in 2009 decided to divest its real estate operations.

The brokerage was among the assets that recently were bought by a residential real estate franchise operation headquartered outside the United States. The franchise operation offered the brokerage to Sherin and Lodgen’s clients as part of a strategy to shrink its balance sheet while strategically extending its franchise operations in major markets in the United States.

Sherin and Lodgen laid out a strategy that included the goals of:

  • Negotiating a purchase price and payment structure that would not strain their client’s earnings and cash flow in ensuing years, particularly in the first few years, when conditions in the client’s markets were expected to be most challenging and uncertain;
  • creating a financial relationship with maximum financial flexibility and tax deductibility, and;
  • forging a franchise agreement that would allow for the retention of their client’s locally-focused, agile management culture while leveraging selected back-office capabilities offered by the international franchise operation.


The clients turned to Steve Eimert, a Sherin and Lodgen partner who specializes in the acquisition and disposition of private companies, for an agreement that would provide a structure for operational independence, financial flexibility and future profitability while meeting the needs of the seller for minimum guaranteed transaction value and a share of upside earnings potential over an extended period going forward. The transaction included terms with the look and feel of a conventional franchise contract, with financial incentives for our clients to take the risk of buying back their agency at what arguably was the riskiest period in the past twenty years.

A further hurdle in the deal was overcome when the buyers agreed to waive two years of remaining guaranteed compensation and additional prior bonus claims that were part of their original contract with the financial services conglomerate.  Those claims, which were pending when the financial services conglomerate was sold to the franchise operation, could have stymied the deal but instead became part of an overall package of conventional and implicit value sufficient to drive the deal to closing, which in the end found the seller including in the deal for a nominal price four additional offices that it owned adjacent to the buyers’ existing market.


At a difficult period in the residential real estate industry, our clients completed a deal that permits them to re-acquire the iconic agency that its founders had built from a one-shop, two-man operation to a network of more than 400 agents in affluent neighborhoods within one of the country’s largest metropolitan areas, while expanding the agency’s footprint by nearly half and ensuring that their seller-franchisor shares with them a substantial part of the financial risk.

On its end, the franchise operation has increased its bottom line through the franchise deal while enhancing its reputation by adding under its umbrella a team of veteran and highly respected real estate professionals in a premier market. Equally as important, the addition of the high-end agency has helped the franchise operation attract other franchisees by sending a message to the market that high-end brokerages are willing to join its U.S. franchise team.

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