Under One Roof
Fresh off their monumental December merger, Louisiana real estate’s two top families share their thoughts on the future of the industry.
Last December’s announcement that Latter & Blum had acquired longtime competitor Gardner Realtors made big news in 2020. The two companies had spent decades vying for local dominance ever since Gertrude Gardner — a former Latter & Blum employee — put out her own shingle in 1943.
Company leaders call it a natural match that will help the combined entity thrive in a competitive, fast-changing industry.
According to Latter & Blum President and CEO Lacey Merrick Conway, “It was a very easy cultural fit — what we deliver to the agents, our outlook on the community, our commitment to both. There wasn’t a lot to figure out.”
Latter & Blum is now the largest real estate firm in the Gulf South region, with more than 3,700 real estate associates under its umbrella — around 800 of them from Gardner. The firm is the 20th largest among the nation’s 85,000 real estate companies.
Latter & Blum is also the country’s second-largest woman-led brokerage. Conway took the helm of the 105-year-old firm in January 2020, when her father, Bob Merrick, who had held that position since purchasing the company in 1986, transitioned to the role of chairman and owner.
Both Merrick and Conway, along with leadership team members Chip Gardner and Crystal Gardner-Phillips (great-grandchildren of Gertrude Gardner) joined Biz New Orleans to discuss the merger and share their views on the future of residential and commercial real estate in the region.
How did this acquisition come about?
Crystal Gardner-Phillips: We have gotten to know each other very well for the past few years through the Realty Alliance. Sitting down talking about the state of affairs of the industry just led to a ‘what if” conversation. So, although we’ve been in serious talks about this for a shorter period of time, we’ve been talking about the industry for years.
Lacey Merrick Conway: I think part of what added to that quick ‘Let’s talk… Oh my god, we’re going to do this’ is the sheer fact that we get along. We’re just so pleased and proud as a company that the Gardner family thought enough of us to want this to happen.
How has the transition been so far?
Conway: I think with any acquisition or coming together, we both have fiercely loyal agents — to what the company stands for and what we are. It’s been a quick transition for some because we do so much that is the same. It’s just getting everybody up to speed, even the technical — like the signs, still honoring the Gardner name but knowing that we need to make this transition in a timely manner.
Chip Gardner: This is truly a marriage of the top two real estate families. When two distinct individuals get married, one takes on the other’s name, and at the end of the day, we took on Latter & Blum’s name with this marriage. Our great-grandmother, Gertrude, actually started her career at Latter & Blum — we didn’t always talk about that as we ran a great business for 77 years, but it’s also part of the reason why we came back to Latter & Blum, why this marriage occurred. We’re excited about it.
How have both companies benefited from the merger?
Gardner-Phillips: We’re two companies with many more similarities than differences. What we can do together is far more than we could have done apart. It’s a fair statement to say that the client’s desires and needs from their realtor continues to evolve, and the realtor’s expectations of what they want from the brokerage continues to evolve, and we will be unmatched in providing that and continuing to lead the market together.
Conway: It’s more fun to be here and do this together instead of competing against each other. The other thing that’s interesting is that we’re very lucky in having my dad, and obviously their father [Glenn Gardner]. It’s nice having the wise counsel there helping us guide the ship, and I think that gives a lot of reassurance to our agents in the community in that we have a good leadership group.
Gardner-Phillips: We always like to say that we’re a generational real estate company, with the perspective of multiple generations. That’s one of the things that makes us so strong.
“I go down Magazine Street to get home every day. I think the last time I started counting, there were about 26 ‘For Lease’ signs. And Magazine Street a year ago I thought was maybe the hottest street in the city of New Orleans.”
How do you square this move against the deconsolidation happening in the industry, with smaller brokerage firms breaking off?
Conway: Smaller, boutique-y firms will always have a place in the real estate world. As far as our company is concerned, we’re unique in that we really have our finger on the pulse of what’s going on in all the major communities in Louisiana. We have a lot to offer within markets throughout Louisiana — not just residentially, but commercially, with property management — everything we do.
Gardner: Quite frankly, the most successful companies are going to continue to get larger, and it’s going to be harder for the smaller companies to compete in the future, with what’s going to be required from a resources, technology and talent perspective.
When you look at what’s happening with residential real estate, there are so many players coming into the space – it’s a lot of noise and disruption. We are positioned in a way that we’re accepting of it, we’re rolling with it, we’re making our moves but definitely staying true to who we are at the core.
Lacey Merrick Conway
When Mr. Merrick was leading the company, Latter & Blum undertook several mergers and acquisitions. Do you anticipate that remaining part of the company’s strategy?
Conway: We’re always open to it. I would say that obviously we’re picky. We want the companies that are like our company, where we feel the synergies are going to work. We’re not just out to buy anybody and everybody. [But] it’s always out there. We have a lot to say grace over. Part of the wonderful thing with this Gardner coming together is that it really beefs up and locks us into New Orleans. This is where we are based. Both companies were started here. I think it reiterates our commitment to the communities that we are already in.
Do you plan on continuing the philanthropic focus that has been a hallmark of Latter & Blum and Gardner throughout their histories?
Conway: Absolutely. Gardner definitely brings another element with what they had taken on as a company and what is near and dear to their heart. I think with COVID-19 and everything going on in the world, it’s more important now for companies that can help the community to do their part. We’ve been so committed to that — I think that’s absolutely just baked into our DNA.
Gardner: And although we have changed our family’s last name to take on Latter & Blum’s, one of the ways we are going to keep Gertrude Gardner’s name alive — because it is a household name — is through the Gertrude Gardner Foundation. That meant a lot to our family and our realtors and the community, and that commitment will continue.
What is the state of residential real estate across the region?
Conway: Residential real estate has definitely been the shining star, not just in Louisiana but across the nation. America is looking at the home in such a different way — it’s where you play, work, eat… Everybody is asking themselves what they really want in a home because they’re spending so much time there. It’s a weird juxtaposition with restaurants and tourism on their knees. How are people having this push to buy homes? Interest rates have been a big tailwind for that. I think interest rates hit record lows maybe 16 times in 2020. I mean, if that doesn’t get people out of their chairs to buy real estate, I don’t know what really would.
Someone made the comment that in residential real estate it feels like we’re kind of in Q5 of 2020 versus Q1 of 2021. It’s the same story – low inventory, low interest rates, high demand. The question is how long will that continue? And the consensus is that it will probably cruise along through Q2, but at some point, the reality of the world might slow that down. Interest rates will go up a little bit — nothing dramatic, still at incredible lows, but that may put a little pressure on, and just the fact that prices are rising will maybe make people pause a bit.
There’s been so much activity all over the place. But what might lessen the shining star in 2021 are the evictions, delinquent mortgage payments, unemployment… In New Orleans, we have a lot that’s going to make 2021 a hard year.
“A lot of things have changed over the years in real estate, but the one thing that has always stayed the same and is the most important piece of the puzzle is that client/realtor relationship. Technology can always complement and enhance that, but it can never replace it.”
Which categories or geographies have been particularly hot?
Conway: Everybody is doing more business. Everybody is seeing a boost in their sales prices, and inventory is tight pretty much everywhere. Generally, when we look at the Northshore or Metairie or Greater New Orleans, they traditionally have more units sold, so you can really see a jump in those areas that are traditionally more popular. I think some people, for whatever reason, are trying to get out of Orleans Parish or want a little more space, and Metairie and Old Metairie — inventory is so tight there.
Gardner: The strongest headwind in this segment of the business is low inventory. The market would see an even greater amount of transaction if there was enough inventory. It’s not just a New Orleans thing — this is actually the lowest point of inventory in the country’s history, across the nation. The residential market is good in all three segments: the overall marketplace, what you call ‘entry level’ and luxury. There aren’t many times where all three are trending in a positive way in alignment.
Conway: We are seeing so many families that want to upsize — they really want that extra space… the pool, the yard… that people didn’t always want to deal with. And this isn’t unique to our area. It’s an interesting change in what is popular. People are having an easier time selling that house with all the square footage.
Bob Merrick: One of the funny things to me is I’ve been in my house for 26 years, and with COVID-19, I’ve probably sat on my front porch more in the last nine months than I have in 26 years. I’ve met more of my neighbors on a real personal basis than I have in 26 years. So, there were some pluses to this — front porches are wonderful.
Conway: Front porches, pets and Home Depot – winners!
Any soft spots?
Conway: When we look at the market, you can see the condo market, like in the Warehouse District, is hurting. People are saying, ‘I would rather pass on the condo. I want to have more privacy.’ Condo prices have come down about 10%. We have more inventory because we are seeing people pulling out of the high-density areas. But it’s cyclical. Maybe it’s down right now, but they’re not down and out forever.
Quite frankly, the most successful companies are going to continue to get larger, and it’s going to be harder for the smaller companies to compete in the future, with what’s going to be required from a resources, technology and talent perspective.
How has the pandemic affected the commercial market?
Conway: The winners in that category have certainly been industrial and multi-family. We’re a city with a lot of connectivity with the port, with that kind of industry, so warehousing iswinning. But commercial real estate has definitely had a punch in the gut.
As far as office space, people are still kind of asking, ‘How much space do we really need?’ Those leases are very long term. I think people are getting more creative with what they’re asking for with office space. If we go back to the office, do people need more space now to socially distance?
Retail already had a reckoning of sorts with just how much is online. Boutique-y stores, I think, people are still very loyal to, but that’s going through some changes.
Merrick: On the commercial side, everybody is worried about — we’re a tourist town. We rely on tourism for our economy to work. The restaurant industry is on its knees, hotels are not making it. I think unfortunately you’re going to see a lot of foreclosures over the next year.
On office space — I don’t know anyone who’s got an answer to what’s the two-to-three-year scenario. Retail is another question mark. I think the retailers who have jumped to online sales in a big way have done well. The mom-and-pop shops… I go down Magazine Street to get home every day. I think the last time I started counting, there were about 26 ‘For Lease’ signs. And Magazine Street a year ago I thought was maybe the hottest street in the city of New Orleans. It’s hitting everything.
What makes you competitive against new industry players with a more digital-based model, like Zillow?
Conway: Real estate has always been a relationship business, and I think that’s where we soar. We have great managers, great leadership and great agents that are very helpful. We are a traditional firm, we do have a lot of history, but it doesn’t mean we can’t be fresh and cutting edge. I think we feel very secure with who we are as a company and what we have to offer, knowing there will always be new entrants into the market.
Zillow — they were a third-party aggregator. They’ve been everything in between, and now they’re an actual broker. When you look at what’s happening with residential real estate, there are so many players coming into the space – it’s a lot of noise and disruption. We are positioned in a way that we’re accepting of it, we’re rolling with it, we’re making our moves but definitely staying true to who we are at the core.
Gardner: That is as the local market expert — that is what Zillow and those will never be. When you have the level of local expertise that Latter & Blum has, with the talent of realtors, they can’t compete at that level.
Gardner-Phillips: Looking at this from a generational perspective, we know that a lot of things have changed over the years in real estate, but the one thing that has always stayed the same and is the most important piece of the puzzle is that client/realtor relationship. Technology can always complement and enhance that, but it can never replace it.
Residential Real Estate
Jan 1- Dec 31 2020
Greater New Orleans
17,512 | Closed Sales in Units ( 9%)
$287,300 | Average Closed Sales Price ( 9%)
2,904 | Current Inventory in Units ( 41%)
1,975 | Closed Sales in Units ( 7%)
$192,118 | Average Closed Sales Price ( 5%)
599 | Current Inventory in Units ( 36%)
6,167 | Closed Sales in Units ( 10%)
$212,936 | Average Closed Sales Price ( 9%)
1,340 | Current Inventory in Units ( 45%)
183 | Closed Sales in Units ( 24%)
$186,700 | Average Closed Sales Price ( 10%)
1,080 | Current Inventory in Units ( 31%)
Greater Baton Rouge
12,423 | Closed Sales in Units ( 14%)
$250,500 | Average Closed Sales Price ( 6%)
2,310 | Current Inventory in Units ( 42%)
12,380 | Closed Sales in Units ( 5%)
$212,328 | Average Closed Sales Price ( 3%)
589 | Current Inventory in Units ( 43%)
6,529 | Closed Sales in Units ( 11%)
$200,988 | Average Closed Sales Price ( 10%)
1,063 | Current Inventory in Units ( 46%)