Friday, October 9,

2009  Business First of Columbus - by Brian R. Ball

Gryphon Realty Advisors has joined the United Country Real Estate Inc. network in a bid to expand its auction house division and diversify into the sale of condominiums and single-family houses.

Rich Kruse, president of Gryphon USA Ltd., the brokerage’s parent, said the affiliation with the Kansas City, Mo.-based network will mean a rebranding of his firm to United Country Ohio Realty & Auction Group.

Gryphon and its affiliate Gryphon Asset Management LLC became known as marketers and receivers of distressed real estate amid an unraveled housing market and slump in commercial real estate. Its high-profile commercial assets under receivership include the Northeast Business Campus office park and Thom’s Grandview restaurant.

Kruse wants to broaden his auction business and extend his reach into the residential and commercial real estate markets for when they recover.

“It’s a big risk in this (economic) environment,” he said, “but we’ve calculated it.”

Beyond the country

United Country operates primarily in rural areas through 650 franchised offices in 42 states and in Costa Rica. It entered Ohio in 2007 through franchises in Newport and Woodsfield in eastern Ohio. Walton Realty & Auction Company LLC in Upper Sandusky joined the network in February.

United Country brokerages typically market farm land, ranches, recreational properties and homes in small towns. But the network has expanded into larger cities, including Indianapolis and Dallas, driven in part by the creation of an auction division in 2007.

About 70 United Country brokerages, including Ohio Realty & Auction, offer auction services.

“A lot of our buyers want to move out to the country,” said United Country spokeswoman Mary Carver. “But as we entered the auction industry, we found we have buyers and sellers wanting to work with affiliates located in more urban markets.”

Kruse said the auction services and networking prospects with other brokerages attracted him to United Country. He also sees the affiliation as a way to offer brokerage services in the residential and commercial real estate markets.

“On top of helping out our auction group,” Kruse said, “this creates an opportunity for growth into general brokerage ... that’s just not focused on distressed assets.”

Leveraging contacts

Business diversity has become more important as a growing field of brokerages tap into the increasing supply of distressed properties.

“Having a real estate brokerage primarily focused on distressed assets was all well and good when we were the only ones doing it,” Kruse said. “There’s going to be more of a need for residential folks and nondistressed properties.”

Kruse said he has seen “a shimmer of hope” as the housing market has begun to stabilize amid expectations of a recovery within two years. He intends to launch the residential business during that time through referrals from banks and law firms that have done business with Gryphon’s receivership practice.

 “We’ll work with our current corporate clients to jump-start that,” he said. “We’ll move on from there.”

Kruse said the slow economic recovery gives the real estate firm time to establish itself.

United Country has a commercial referral agreement with Colliers International Property Consultants Inc., but Kruse said he expects Ohio Realty & Auction eventually to expand more into the marketing of sound properties valued at $750,000 to $3 million.

“There’s this middle market where you don’t have a lot of people playing that’s too small for the larger brokerages and too big for the smaller brokerages,” he said. “It’s probably an area where we can continue to work on growing the commercial side.”