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Q&A: Hanna Real Estate set sights on Buffalo in '90s

Howard Hanna Real Estate Services vaulted into the No. 1 position in Western New York home sales after the Pittsburgh-based firm purchased RealtyUSA last year. That followed its earlier acquisition of Rochester's Nothnagle Realtors, which brought the firm into New York only a year earlier.

Merle Whitehead had built RealtyUSA into the biggest independent brokerage across upstate New York, so Howard Hanna captured that title in one fell swoop, adding to its strong position across the Midwest and MidAtlantic.

The family owned firm is now the No. 3 real estate brokerage company in the country, behind Realogy – which owns Coldwell Banker, Century 21, ERA and Sotheby's brands – and Berkshire Hathaway HomeServices. Berkshire Hathaway also owns the Buffalo News.

Howard W. "Hoby" Hanna IV, president of Howard Hanna Real Estate and son of company CEO Howard W. "Hoddy" Hanna III, spoke recently about the firm's growth and why it set its sights on Buffalo more than two decades ago.

Q: Your nickname is Hoby, and your father's is Hoddy. Where do those come from?

A: We're all Howard, our given name. My grandfather always went by Howard. But when my dad was born, my grandmother thought the name Howard was too formal for a little boy. Somehow, they came up with this nickname, "Hoddy" – not "Hottie," like he's a good-looking guy.

When I was born, my mother felt the same way, that the name Howard was just too formal. So the crazy story is I didn't have a name for the first couple of months. And my maternal grandfather, I guess, was holding me, and said this kid is like a little hobo without a name. And hobo became "Hoby." So it has nothing to do with sailboats. (Hobie Cat Co. is a sailboat manufacturer.)

Then I have a brother named Duffy. And he's actually named after my maternal grandfather, Frederick Duffy, who named me the little hobo. So, Hoby, Hoddy and Duffy.

Then I have a son, Howard the fifth, and his nickname is "Quint," for "five," even though when he was born, agents in the company wanted me to name him "HUD-1," and my wife wondered what she married into. (HUD-1 was the government's standard settlement statement form used in real estate transactions until two years ago.)

Q: How did your company start?

A: The company was founded in 1957 by my grandparents, Howard and Anne. It was a mom-and-pop company that did a little bit of everything.

It was started in the city of Pittsburgh, so it didn't start like a lot of real estate companies with a suburban background. We've always had an affinity for the first-ring suburbs and the city neighborhoods in all the markets we're in. We just think it's great to see they're all thriving back. But that's where our roots are, our origin, and where we were all raised, in the city of Pittsburgh itself. ...

In the late '60s and early '70s, my dad and his sisters, Annie and Helen, came into the business. My grandfather more or less said there's only one office, so if you kids want to run this residential thing, go ahead, and I'm going to focus on the appraisal business. And you can imagine turning over your business to your 20-something-year-old kids, but my grandfather thought there was a space for innovation and youth and energy in any business, and that transferred down to the next generation of the business.

Q: What drives your company's growth?

A: We believe what makes us unique are five pillars or guiding foundations to the company: great sales associates, great sales managers, innovation, financial integrity and mortgage title insurance.

We're still a family business. We have no outside partner. We sign as family members on the dotted line for everything. For the banks when we take the risk, it's our family dollars. We want to have a degree of financial integrity.

All of those principles support what we try to do. At the end of the day, by looking at all those principles, we believe we're creating an experience for customers that is unlike other brokers. That's what I believe we do differently.

Q: What attracted you to buy RealtyUSA?

A: In about 1994, we as a company and a family, we looked strategically at what we wanted the future to look like. There are 14 to 15 family members in the business in some capacity. We realized, with a lot of foresight from my father and my aunts, that if we were just going to be a Pittsburgh company and if potentially all the kids and cousins and nephews and nieces wanted to come into the business, we had to grow.

We did strategically want to grow around the brokerage business. I remember sitting in a room for a weekend, and we took a map out. We drew a circle around Buffalo. We drew a circle around Chicago. We drew a circle around Baltimore. We said within this global circle, these are like-minded communities and the people are like what we're accustomed to.

The first major deal we did was in Cleveland, because it was a broker that we knew. He didn't have a succession plan, and he wanted an exit strategy. We realized we could work with a larger company and integrate it.

A year ago, when Armand D'Alfonso from Nothnagle called us and said, "Hey, I'm looking for an exit strategy, but I want to be part of something for a while. I don't want to ride off into the sunset." That led us to do the deal with Nothnagle.

Knowing he had a presence in Buffalo, and having the relationship we've had for years with Merle Whitehead, it was a little bit of heartburn. Now we're going to be competitors.

But then we were surprised when Merle called six months after the Nothnagle deal and said, "maybe it is time."

Q: What brand will you use?

A: One of the commitments we made to our sales associates and management team was that we wouldn't make a rash decision on the brand, and what would change and what wouldn't.

It'll likely be a Howard Hanna brand, because that helps with continuity. It might remain Howard Hanna, it might remain Howard Hanna-RealtyUSA, we might keep RealtyUSA and just play up Howard Hanna a little more in the logo. It's all in the discovery stage right now

Q: You're the third-largest brokerage, behind Realogy and Berkshire Hathaway, which are publicly traded. How do you compare?

A: I think real estate is still very local, and when I look around the country, and friends of mine who are part of the Realogy network or Berkshire Hathaway, some of their local operators are the better operators and they excel. In Pittsburgh, Realogy and Berkshire Hathaway have really strong operators and are good healthy competitors to us. In a market like Cleveland, they're not as strong. It's the same brand. It's what the leadership looks like.

It's one thing to buy a franchise. But it comes down to how strong an operator is and what difference they make.

Q: How will it be to compete against Hunt here?

A: The Hunt family, I have nothing but the utmost respect for. I've known Peter and Charlie for as long as I can remember, not only from national meetings but from friendship. We've always had a friendship between our families.

Does it make it different when you're competing? It does. But I will say that I'm glad I'm competing with the Hunts. I know there's a level of integrity. I know there's a level of professionalism in the way they run their business. Sometimes there are companies that are competitors and it's just downright nasty, the core capacity and culture of the companies are just so different. I don't believe that here.

Life came our way down a road that included Nothnagle and RealtyUSA. Who knows? Under an alternative universe, it could have been Hunt. They're great people but I think us being in the market will make them better and us being in this market makes us better, because we can see a lot of great things they're doing over there and say, "maybe we should be doing that." So I think it'll be healthy, and I hope they see it the same way.

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