Update: Closed, Real Estate of Jackson Hole

Tuesday, December 23, 2008

By Ben Cannon

“Certain” stakeholders, economy blamed

Jackson Hole, Wyoming - With the sudden closure this week of Real Estate of Jackson Hole, the valley lost its largest locally owned and operated real estate firm. REJH announced Monday it would close immediately, following stakeholders’ decision to turn down an anonymous investor‘s offer, as well failed plans to restructure.

CEO Christopher Johnston told employees that the company had exhausted all its resources, and he requested that agents turn in their state-issued “pocket” cards, rendering them unlicensed until they sign with a different real estate broker or set up other arrangements. By midday, many of the firm’s brokers had begun taking steps to secure employment with some of the valley’s other firms.

At a meeting on Monday, employees asked Johnston to reveal the identity of the anonymous investor, but he refused, saying the investor explicitly asked not to be named.

Rob Cheek, a top commercial broker who has been a realtor in Jackson Hole nearly 30 years, began working for REJH when it bought his small real estate company in 2003.

“The market is really struggling – almost to the point that it has atrophied,” Cheek said Monday afternoon. “It’s been really difficult for everybody, but I feel sorry for the staff. They deserved more than that. We brokers will be fine.”
Cheek said market conditions are similar to those experienced during the recession of the mid-1980s.

Johnston did not return calls before deadline, but an e-mail he circulated to employees and stakeholders over the weekend partly blamed “certain” stakeholders’ decision not to accept the anonymous investor’s offer and “certain” stakeholders who “indicated no commitment to remain or adjust commissions to assist in a proposed restructuring.”

“We feel terrible but have no choice but to close,” the e-mail said.
Employees were asked to remove all personal items from company offices, ASAP, “blizzard” permitting, and they were told to remove all REJH yard signs from properties.

“We are working on a solution for the few pending transactions,” the e-mail said.
The news came as a shock to some watching from the outside, and some firms are opening their doors to a flood of brokers – among them some of the valley’s top agents – seeking new agencies. REJH had 70 agents listed on its Web page Monday.

“For us, the cup is half-full,” David Viehman, an associate broker and partner of Jackson Hole Real Estate, said Monday. “We have tons of interviews today and lots more coming.”

Viehman, who compiles Jackson Hole real estate data and analyzes trends in his newsletter and Web site, The Hole Report, said he expected the REJH closure and market slump in general to cull as many as a couple hundred licensed realtors from a market some have said is oversaturated with brokers. There are currently about 850 licensed brokers in Jackson Hole and nearby areas in Wyoming.

Viehman said he was not sure why the valley’s largest locally owned brokerage toppled so quickly, but said Johnston had been aggressively growing the company when the bottom dropped out of the housing market and the economy tanked.
“Sometimes bigger isn’t always better,” Viehman said. PJH
Additional reporting by Matthew Irwin.
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Update: Closed, Real Estate of Jackson Hole | Planet JH News Article: General News

Reader Comments

I'm not sure it can be much of a secret who the anonymous investor is....the apple doesn't fall far from the tree. I'm also sure the market, nor the stakeholders are all to blame. It all stops with the top person, no matter where you work and what circumstances happen. Poor business decisions at the top got you here.
Apres Vous I

This is a very troubling event, mainly because the original stakeholders were blamed for REJH faltering. Cheek is right that the staff suffered the most from this, although you'd never know it. The anonymous investor was in fact Mr. Johnston's father and the deal put on the table was very last minute with threats that the staff would be out of jobs by Christmas. I believe things could have been handled much sooner--Mr. Johnston could have advised the staff in advance, rather than using them as pawns for a last minute deal loaded with conditions most favorable to him. It's important to note that the stakeholders who refused the deal were also long time owners with much interest in keeping REJH afloat. Rumor has it that these folks tried to buy the company back from Johnston last year when they were extremely unhappy with his leadership and his idea that "bigger is better." Anyone who owns a real estate agency will tell you that building a company requires building it in such a way as to go lean when the cyclical nature of the real estate market takes a down turn. It is simply not wise to get greedy and try to grow beyond one's means to survive in tough times. I feel sorry for the staff, especially since it is clear that Mr. Johnston is blaming the economy and stakeholders for his own failures.
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