Princeton is a tough market for real estate. Home sale values, even in a down market, are high and so is the prestige, which means no shortage of competition.
At the top of the Princeton food chain for decades were Henderson Sotheby’s International Real Estate and N.T. Callaway, the two firms that factored into half the residential deals in town. A year ago the two firms came to a cordial understanding — they could continue to butt heads or they could work together. So “the Gucci and Versace” of Princeton real estate, as co-owner Jud Henderson calls the firms, merged without a single dollar changing hands.
A year after the merger Callaway Henderson Sotheby’s International Realty, based at 4 Nassau Street, has been involved in 59 percent of all residential real estate transactions in Princeton, says Henderson. And the conjoined company’s revenue is 12 percent higher than what both companies would be expected to have achieved on their own.
Co-owner Pete Callaway says the unification came with little upheaval, but still took some adjusting. “At first it was hard for the agents,” he says.
“There’s a lot that goes into combining two companies whose owners and agents had been doing things their own separate way for decades,” says Henderson.
From the technology standpoint alone, the union required combining everything from websites and back office systems to consumer materials and agent workspaces. “We thrust a lot of change on our agents, who, thankfully, were up to the challenge and I think recognized the merits of what the new company would provide,” Henderson says.
And although Callaway calls the merger “a friendly get-together,” Henderson says that “a small number of employees” were let go so that the company could save on redundant costs. “We tried to find a place [for everyone] wherever we could and managed fairly well to do so,” he says. But not everyone made the transition. Callaway Henderson now employs 15, plus 200 agents in five offices
The merger itself, says Henderson, was actually spurred by Sotheby’s. “They opened up the dialogue between us. N.T. Callaway was the first affiliate when the auction house took on that model with real estate companies in 1976.”
Pete Callaway opened his first office in 1974, and until 2005 N.T. Callaway had been affiliated with Sotheby’s. But that year Callaway traded his company’s Sotheby’s affiliation for Christies. When merger talks began in 2011, Callaway took another look at the marketing reach that comes with the Sotheby’s name and wanted to take advantage of it. And for Henderson, “the prospect of combining and creating the single best real estate company in Princeton was great,” he says.
Henderson’s grandfather, John T. (Jack) Henderson, first opened his office in Princeton in 1953. In the 1970s Jud’s parents, John and Peggy worked for Jack and eventually took over the firm. Henderson says his mother — who remains an agent with the firm — fully supported the merger. “She knew this combination was the best way to keep a family-owned business not only relevant but thriving,” he says.
Both families maintain an equal ownership share with equal voting rights. The company also established a rotating broker-of-record term, and because Callaway had seniority in the ownership circle, he was the first. Henderson is the current.
On the Callaway side, Pete’s son, Norman, and daughter, Karen Callaway-Urisko, are managing members with administrative roles. Callaway’s wife, Christina, is an agent with the firm. Henderson’s siblings, Matt Henderson and Jane Henderson Kenyon, also are managing members with administrative roles. All are licensed agents.
Jud Henderson started working for his grandfather’s firm (for his father) at the ripe age of 18, as a licensed real estate salesman. After graduating from Hamilton College with a bachelor’s in English, he went to work full-time at Henderson Realtors
Callaway grew up in New York City and started his professional life in the 1960s in a decidedly different arena — Upperville, Virginia, where he managed a large horse farm. He was called back to Princeton for “family responsibilities,” which he figured would keep him in town no longer than a year. He also figured he’d spend his short time in Princeton dabbling in real estate and went to work for Edmund Cook, who at the time was one of the biggest names in real estate in the Princeton area.
In 1969 Callaway formed a partnership, Peyton Callaway Real Estate. By 1973 he felt he was ready to go out on his own and opened N.T. Callaway Real Estate in Princeton. His company eventually opened (and still operates) offices in Pennington, Montgomery, Cranbury, and Lambertville.
Callaway says he is glad to be re-affiliated with Sotheby’s after his brief time with Christies, in large part because when it comes to residential real estate, the Sotheby’s name carries a lot of weight and is a label hung in most luxury markets around the world. “The power of seeing ‘Sotheby’s’ on the sign really is contagious,” he says. And since the firm has about 500 offices worldwide, it is used to dealing with transitions and mergers into the Sotheby’s family “Sotheby’s guided us through the merger very well,” Henderson says. “They knew what to expect and it went smoothly.”
Sotheby’s has a team in place that has been helping with these types of situation around the world these last few years, Henderson says. “They knew what to expect financially, culturally, legally and logistically pretty much every step of the way. We’re indebted to them, really.”
The other aspect that has bolstered things for the united company, says Callaway, is the fact that the Henderson and Callaway companies both built their names on being local, family-owned enterprises. This, he says, built loyal customer bases — but customer bases that always liked the other company as well. “I can’t tell you how many homeowners have come to us and said thank you for coming together, because now we don’t have to choose between you,” he says.
“There’s also the reality that the market had changed dramatically.” and together we knew we could be more certain that a family owned business could continue to thrive in this community.”
Of course, a much-improved residential real estate market also helped Callaway Henderson Sotheby’s turn such a profitable 2012. Even in the depths of the Great Recession, Princeton’s formidable housing market remained relatively safe in its bubble and was largely immune to wholesale foreclosures. Sales, though down, still outperformed most markets in 2009 and 2010, and average home prices remain almost double those in the rest of Mercer County. According to Henderson, Princeton’s average home sale price is just below $700,000; the rest of Mercer County’s average is just below $400,000.
“We’re selling more houses for more money,” Henderson says of 2012. In fact, 2012 is the third straight year Henderson can claim that his company sold more houses than the prior year. Sale prices have not yet returned to their 2004 summit, but the number of houses moving has steadily increased. And while Princeton’s average home price is about $700,000, the average for Callaway Henderson Sotheby’s has been about $850,000.
The uptick in units sold buoys the hopes of both Callaway and Henderson against recent talk of “the cliff” on which the economy and residential real estate is feared to be resting. The cliff is a convergence of factors hinging on proposed federal tax increases and cuts in national spending that could, if misplayed, send the recuperating residential market back to its gasping 2009 self. “All this is not exactly making people feel all warm and fuzzy,” Henderson says. “But the market is getting better. It’s just that the money is lower, but remember, we just had three years in a row of increased sales.”
Callaway adds that worries about the so-called cliff are mostly aimed at the rich, who want to know how their wealth will be affected. But keep in mind that Princeton has no shortage of wealthy people and the effects of the federal tax/cut have yet to take shape.
Callaway Henderson Sotheby’s, however, is not worried and has settled in nicely at 4 Nassau Street. Henderson says the company chose 4 Nassau Street for a few reasons. One is financial. “But really it’s also a better retail presence than 34 Chambers Street (Henderson’s previous main office, which is separately owned by Jud and Matt), and quite frankly had been in operation as a real estate office for much longer than 34 Chambers,” he says.
“We did separate out real estate that was owned by either family and was not part of the new company ownership,” Henderson says. “We all agree that made things easier.” A new single tenant has been signed for all of the space at 34 Chambers Street, where the previous multiple tenants have been leaving throughout the year.
Callaway and Henderson prefer not to divulge any details about the new tenant or when it will move in. Numerous sources, including former tenants of he building, have told U.S. 1 that a re-insurance company from Bermuda has expressed interest in the space.
On top of the new tenant, Callaway Henderson Sotheby’s has ramped up its multimedia, having hired Sotheby’s vet Natalie Gilmore as its new marketing director and two photo/video professionals to make Internet listings more interactive and alluring. Henderson says his company had tried the idea of agents shooting their own videos and photos, but the results were predictably iffy. “Rather than make it a headache for the agents, we hired professionals,” he says. The company also has launched a YouTube channel to get its listings out to a broader audience.
The company also measures its success by how well its campaign toward Hurricane Sandy relief has come along. Since November the firm has contributed a portion of its sales to relief charities in New Jersey and is on track, Callaway says, to reach its goal of $10,000 by January 31.
Still, more than anything, Henderson is banking on the cachet carried not just by the Sotheby’s name, but by the Henderson and Callaway names in the Princeton market. “We’re a locally owned, family-owned company surround by a lot of not-locally owned and not-family-owned companies,” he says. “We think the legacy of two local, family-owned companies can survive and thrive. After one year, there’s no doubt that together, we are better serving our clients.”
Callaway Henderson Sotheby’s International Real Estate, 4 Nassau Street, Princeton 08542; 609-921-1070; fax, 609-921-2927. www.callawayhenderson.com.
Year of the Merge
DataCede-Strategic Initiatives Management Group. DataCede, a re-insurance company based on Research Way, merged with Strategic Initiatives Management Group LLC in March. Strategic Initiatives managed distressed insurance companies and was run by Holly Bakke — the commissioner of the state Division of Banking & Insurance from 2002 to 2005.
DataCede produces software (CedeRight), a cloud-based package that untangles the process of getting insurers paid by re-insurers.
DataCede, 2 Research Way, Princeton 08540; 877-789-2333; Joseph Zarandona, director & CEO. www.datacede.com.
Bartolomei & Ballezzi. Two Lawrence-baced accounting firms joined forces on Brunswick Pike. Ballezzi & Associates has merged into Bartolomei Pucciarelli, giving the combined company offices in Lawrence, Cranbury, and Ocean townships.
“We are continually looking to increase our commercial business practice,” said James Bartolomei, managing partner of Bartolomei Pucciarelli. “This deal is a home run for us as we continue to expand our operations.”
He said that as Ballezzi’s practice grew, the company wanted to join a firm “with a diverse team of professionals and broader resources to support them in delivering the progressive services which both firms are known for.”
In existence for some 40 years, the majority of Ballezzi & Associates’ customer base is in commercial businesses, with a specialty in the information technology sector. Many of those clients are software development companies requiring a wide variety of services, including outsourced CFO, business consulting, performance analysis, and capital procurement.
According to Ballezzi, a 15-year relationship between the two companies made the decision an easy one. Throughout that time, the two firms have collaborated on numerous projects, giving both a solid understanding of each other’s capabilities and approach to client services, he said.
“There is a true alignment with regard to integrity, values, and shared concern for our clients’ best interests,” said Ballezzi. “This was very important to me and my partner. In fact, when we made the decision to merge up, BP was the only firm we considered.”
Bartolomei Pucciarelli LLC, 2564 Brunswick Pike, Lawrenceville 08648; 609-883-9000; fax, 609-883-9008. James Bartolomei, partner. www.bp-cpas.com.
Borden Perlman. Borden Perlman, the insurance firm at 2000 Lenox Drive, merged with PRS, a Highland Park firm headed by Sean Kelly and W. Burton Salisbury. The new firm was called Borden Perlman Salisbury & Kelly (BPS&K). The merger followed on the heels of a deal at the beginning of the year in which Borden merged with Penninton Insurance.
After the PRS merger, the company’s corporate offices were located at Borden’s Lenox Drive office, with the combined company maintaining its presence in Highland Park and Trenton.
The merger increased BPS&K’s total client base to almost 12,000. clients. Partner Douglas Perlman said the merger allowed the company the ability “to offer even more in-depth products and services. We look forward to not only getting bigger, but better.”
This was the second merger of the year for Borden. In April the company combined with Pennington Insurance, formerly on Route 31 in Pennington. Pennington Insurance President W. Scott Miller and his son W. Scott Miller Jr. joined Borden Perlman and moved into the Lenox Drive headquarters.
Borden Perlman Salisbury & Kelly, 2000 Lenox Drive, Suite 202, Lawrenceville 08648; 609-896-3434; fax, 609-895-1468. Douglas Borden, president. www.bordenperlman.com.
NRG Energy & GenON. NRG Energy at 211 Carnegie Center completed its merger with GenOn Energy, based in Houston, creating the largest competitive power generator in the United States.
The holdings of the combined company includes almost 100 power generation assets with a total capacity of approximately 47,000 megawatts (MW) to some 40 million homes in locations in the east, gulf coast, and western United States. The combined company, which retained the name NRG Energy, is now dual headquartered. Its financial and commercial headquarters is in Princeton and its operational headquarters is in Houston. The company has a combined value of $18 billion.
“This combination ushers in a new era of scale, scope, and market and fuel diversification in the competitive power industry,” said NRG president and CEO David Crane, who continues in his present positions.
NRG Energy Inc. (NRG), 211 Carnegie Center, Princeton 08540-6213; 609-524-4500; fax, 609-524-4501. David Crane, president and CEO. www.nrgenergy.com.
Billtrust-Mark Altman & Associates. Billtrust, based in American Metro Center, a provider of automated invoicing and statement systems for small and medium-sized businesses, has been rapidly expanding.
Billtrust’s latest merger last January was Mark Altman & Associates of Hudson, Massachusetts. “The company does municipality billing, for local towns and governments, areas where we were not strong,” said said Flint Lane, president and CEO of Billtrust.
Mark Altman became group president at Billtrust as head of the municipality group. His company’s print and mail facility became the eighth operating facility in Billtrust’s nationwide network.
Billtrust, 100 American Metro Boulevard, Suite 150, Hamilton 08619; 609-235-1010; fax, 609-235-1011. Flint Lane, president & CEO. www.billtrust.com
WithumSmith+Brown-Eisner Lubin. CPA firm WithumSmith+Brown on Vaughan Drive merged with New York-based EisnerLubin in a deal that added 50 employees — including nine partners — to Withum’s ranks.
The merger also expanded Withum’s services by adding EisnerLubin’s non-profit, manufacturing, and real estate concentrations. and is expected to add nearly $12 million annually to WithumSmith+Brown’s revenue.
Managing partner Bill Hagaman said the merger would add $11.6 million in revenue to his firm, which currently earns $76.7 million in annual revenue, for a combined total of approximately $88 million next year.
“We’ve been meeting with them for a little more than a year,” said Hagaman. “I felt the primary factor was the makeup and culture of the firms. We’re going to have some of our partners going to New York to work full time, and the current managing partner, Bob Simon, will be the partner-in-charge.”
WithumSmith+Brown, 5 Vaughn Drive, Suite 201, Princeton 08540; 609-520-1188; fax, 609-520-9882. William Hageman, managing partner. www.withum.com.