While Realty Times is more interested in how a publicly-held real estate company treats and serves its Realtor customers than how much money it makes, the news released by Cendant that it was spinning off its real estate division in anticipation of ending a Cendant conglomeration is newsworthy for a variety of reasons.

To provide a little background, Cendant is spinning off four major divisions: hotel, real estate, travel-distribution and car rentals. The four new companies will be led by Cendant's current senior leaders, including Richard A. Smith, who will be chief executive of Real Estate Services, with Cendant CEO Henry Silverman serving as non-executive chairman.

The new spin-off has yet to be named.

Cendant was formed as a conglomerate, with businesses as diverse as Century 21, Avis, Days Inn and Orbitz. While there is certainly synergy between the travel, car rental, and hotel divisions, real estate wasn't that much of a natural fit in the corporation.

With publicly-held companies already being difficult for investors to understand and subject to complaints that shareholder value isn't served with overpaid upper management, the Cendant team believes that it will meet those demands by focusing on "pure plays" or vertically-oriented companies as opposed to empires. Also, Silverman has announced that he will work "for free;" although as Cendant's largest shareholder, he should do well if the market takes favorably to the break-up news.

In fact, the company's conglomerate image may have prevented its shares from truly taking off. It's been stuck around the $20-$25 level for two years, a price not much beyond many companies' opening shares, complains the company.

"Our successful efforts to simplify Cendant's structure and divest non-core businesses have underscored the benefits of greater clarity and focus," said Silverman in a statement. "With these efforts complete, we have now concluded that it is in the best interests of our shareholders to establish pure-play enterprises, as we and our advisors believe the sum of the parts has a value in excess of our current share price," he said.

Richard Smith was unavailable for comment, but a spokesperson for the company said he is "taking a strong division and picking it up in its entirety and creating a new company with the same leadership. We will be the same company with a lot more upside. We'll be focused purely on real estate and franchising and we'll become even stronger. Our track record in the last 19 months is that there isn't a comparable peer."

"Real estate has been financially and operationally strong, and 39 percent of earnings," says the spokesperson, "so our objectives don't change and our brands will stay the same."

According to one news report, the separate Cendant units each would make attractive acquisitions, but it's unlikely any units would be purchased before they are spun off because of significant tax consequences for the buyer.

A Cendant spokesperson said, "In 2004, approximately 1 out of every 4 homes bought or sold in the U.S. involved Cendant-affiliated real estate offices."

Couple Cendant's announcement with the recent retirement announcement by RE/MAX International founders Dave and Gail Liniger, and that company's intention to go "public" next year, and real estate licensing is suddenly much more interesting, particularly since both these companies are front-runners in providing substantial lead generation services to its broker-members.*

They are also in agreement philosophically about how they want their real estate business run - with strong brand appreciation and little or no interference from the U.S. government.

In 2004, RE/MAX had over 100,000 associates worldwide, with 20 average transaction "sides."

Could this be more than coincidental timing, or are the largest most influential brands about to join forces to create a new world order in real estate?

Published: October 25, 2005

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.