A fast-growing Silicon Valley residential real estate brokerage is entering San Diego’s competitive Downtown market. Just as it did in the San Francisco Bay Area, Intero Real Estate Services is starting small but thinking big: one office Downtown, 26 brokers and a franchise agreement.
In Cupertino, where Intero is based, the company is known for its rapid growth. The brokerage, which typically competes against large companies, such as Coldwell Banker, and smaller independents, has grown from 40 agents in one office in Morgan Hill, near Cupertino, to more than 1,000 agents in 14 offices statewide all in less than three years.
In April, the first Intero franchise office opened in Antioch, also near Cupertino. Since then, Gino Blefari, the founder and president of Intero, has seen this part of the business expand to include four additional franchises.
Intero San Diego, located at Third Avenue and Island Street, opened on Feb. 1. It is the fifth Intero franchise to open in the last 10 months.
It will be headed by John Stenberg, who, until three months ago, said he had never heard of the company. But after meeting Blefari, and listening to his pitch about the history and values of Intero at a real estate conference in Palm Desert a few months ago, Stenberg said he was hooked.
A Chula Vista native, Stenberg, 36, has been in the local real estate business for 18 years, since he first worked as an agent at Realty World in downtown Chula Vista.
In 2002, Stenberg started the Realty Executive Premiere’s Downtown San Diego office, where he managed 26 brokers, each one of whom agreed to leave that company and follow him to Intero.
“The Intero story sold itself,” he said when asked about the difficulty of convincing his crew to follow him to Intero.
Central to the Intero philosophy is an emphasis on treating clients and real estate agents as valued customers; something both Blefari and Stenberg point out is not typically as important to larger real estate brokerages.
“Most larger franchises are the same,” said Stenberg. “They are only in it for the buck.”
Some San Diego competitors naturally disagree. The La Jolla-based Willis Allen Co., for example, includes as one of its corporate goals, “to earn your trust by providing the most personalized service in San Diego.”
Blefari said he has worked hard to ensure that every franchise “is in alignment with the Intero values, including loyalty and friendship, and the culture of discipline.”
“Intero is about creating a brand name and empowering people to fulfill their dreams,” said Blefari, who tends to punctuate his comments with business-related aphorisms and positive affirmations.
The only way to achieve this, he added, is by finding the right people to work for Intero.
But some veteran real estate agents Downtown are skeptical.
“The brand itself won’t mean that much to people in San Diego, but if they can provide good service, Downtown is a market with few barriers to entry,” said Drew Nelson, an agent at Willis Allen, which also has an office Downtown.
Greg Neuman, a 24-year veteran of San Diego residential real estate sales, foresees challenges ahead for smaller franchises making their debut on the Downtown residential market.
Neuman opened his franchise office of Prudential California Realty on Fifth Avenue in Downtown’s Gaslamp Quarter in 2001. Today, he said he has 30 agents who report to him.
He said he had not yet heard of the Intero brand.
“Any well-funded new franchises Downtown will do well if they are in it for the long haul,” said Neuman. But, he added, “as this market shifts, a lot of the little tiny offices that have opened in the past few years will probably vanish.”
Owners of smaller residential brokerage firms Downtown that have faced similar challenges in breaking into that market agree.
“The market is getting tighter and squeezing out smaller competitors,” said Andrew Boes, who co-founded City Life Realty on K Street Downtown with his partner, Jim Ellis, two years ago.
He assessed the prospects for entrants into the Downtown residential market by saying, “In a nutshell, I think (the market Downtown) is saturated as far as how many firms there are, and with all the discount brokers coming in, there is more competition on that end as well.”
Intero San Diego is betting it can grow despite these challenges.
Stenberg said Intero San Diego will open two additional franchise offices by the end of the year: one on J Street in the East Village area of Downtown and another in Chula Vista. In 2006, there are plans to expand around the county.
“The plan is to have at least 50 agents in Downtown San Diego by next year,” Stenberg added.