George Raine, Chronicle Staff Writer
Saturday, February 18, 2006

Coldwell Banker Began in the 1906 Rubble of San Francisco

It was either despite his youth or because of it that Colbert Coldwell, then 23 years old with but two years of experience in the real estate business, saw opportunity in the rubble of the 1906 San Francisco earthquake and fire.

On Aug. 27 of that year, Coldwell and two partners opened a real estate office at 53 Post St. -- starting a company that was destined to become a fixture of the San Francisco business community and one of the largest real estate brokerages in the country.

The new enterprise was called Tucker, Lynch & Coldwell and it was led by three distinct personalities: Albert Nion Tucker, 36, was a seasoned bookkeeper and backroom man. John Conant Lynch, 55, a well-known lawyer, had been speaker of the California Assembly in 1885, and was a University of California regent and a regular on the social scene. Coldwell was, well, young and eager.

Youth and drive can take you far. Tucker and Lynch left the company six years later. In 1913, Coldwell invited 28-year-old Benjamin Arthur Banker, a salesman who had carved out a niche at another real estate company, W.B. McGerry, selling lots in Visitacion Valley, to join him.

Coldwell Banker Real Estate Corp., with more than 126,000 sales associates in 4,000 offices in 30 countries and territories, began its centennial celebration by bringing some 10,000 affiliates to its annual conference in San Francisco's Moscone Center this week.

The firm is now a unit of the New Jersey travel and real estate services corporation Cendant. Sales in 2004 totaled $325.9 billion.

In the Bay Area, there are 2,330 Coldwell Banker agents in 32 offices. In 2005, they represented 8,251 sellers and 7,573 buyers in transactions with a total value of $15.2 billion, said Avram Goldman, the president of Coldwell Banker Northern California Real Estate. His office expanded dramatically in the late 1990s through acquisitions.

The firm's origins are tied up with the rebuilding of San Francisco after the earthquake.

Back at the beginning of the 20th century, there was much to do -- not the least of which was to introduce ethical standards to an industry in which fraud was common.

"It was a very cutthroat, unethical, unprofessional business,'' the current Coldwell Banker president and chief executive officer, Jim Gillespie, said of the San Francisco real estate market after the earthquake. Records had burned and salesmen duped clients to reap as much in commissions as they could finagle.

Coldwell and Banker decided to go the honest route. They believed that brokers could not properly serve customers while buying and selling property for their own accounts. They established a rule that employees could not own property other than their own homes. It was the rule at Coldwell Banker into the 1970s.

"If you were offering something that is fair and honest and ethical and aboveboard, you are going to stand out, if the competition is unethical. And it seems that the public was probably pretty fed up with that type of treatment, especially after the quake,'' said Gillespie.

Coldwell was a Colorado native who enrolled at UC Berkeley in 1902 and left in 1904 when he found he could make money in real estate. Over the years, he wore many civic hats: He was a president and a director of the San Francisco Chamber of Commerce, served on the San Francisco Parks Commission, founded the San Francisco Bureau of Government Research and was a director of the Golden Gate International Exposition. He died in 1967 at 84, never having retired.

Banker, a Wisconsin native, was active in civic affairs, too. But he concentrated on building the company, according to his son, Bill Banker, 84, of Piedmont, himself a Coldwell Banker man from 1946 to 1973.

The younger Banker said he was given no preference in the company. Returning from service on a Navy destroyer escort in World War II, he asked his father what he could do at the company. He started in the escrow department and graduated to sales.

"He ran the show,'' Banker said of his father. The older Banker got his work done by 4:45 p.m. to head home to Oakland. "He was very big on that,'' his son said. Benjamin Arthur Banker died in 1965 at 80.

The company was largely in commercial real estate during its first 50 years, although it opened a residential real estate office in San Francisco in 1925 to serve the St. Francis Wood neighborhood, where the Coldwells lived. The company expanded to Los Angeles in 1924 and opened a Phoenix office in 1952.

Coldwell Banker became a major residential real estate company in 1968, when it purchased Forest E. Olson Inc., bringing in 450 employees and 30 residential brokerage offices in Southern California, and Henry Broderick Inc. in Washington state.

That same year, Coldwell Banker became a publicly traded company. By 1976, the company had real estate offices from coast to coast. In 1981, retailing giant Sears, Roebuck & Co. bought Coldwell Banker, affiliating it with investment brokerage Dean Witter and Allstate Insurance to establish the Sears financial network.

In 1993, the Fremont Group, a San Francisco investment firm owned primarily by members of the Bechtel family, bought Coldwell Banker from Sears for $230 million. Three years later, HFS Inc., later Cendant, of Parsippany, N.J., bought Coldwell Banker for $740 million. In the past 10 years, the company's office count has increased by 56 percent and 70,000 salespeople have been added.

"I don't think we have any intentions of slowing down,'' said Gillespie, 61, who joined the Coldwell Banker brand in 1976 and has been its leader since 2004. "I don't have a crystal ball, but the pace that we have set for ourselves the last 10 years -- my goal is to keep that going.''

He said his concern with "all the bubble talk'' -- the anticipation that real estate values cannot continue to defy gravity -- "is what it does to first-time home buyers.'' In California in particular, buyers who were dissuaded from getting into the market over the past two to three years would have lost out on "20, 30 or whatever percent appreciation'' in home value, he said.

Gillespie believes the demographic and economic planets are aligned for continued growth: There are 72 million "Echo Boomers,'' born between 1977 and 1994, who will be buying.

Interest rates will remain relatively low, he thinks.

"Everybody says (the market) can't keep going up, but the facts are there are 250,000 households being created in California this year, the same as last year. And last year, there were only 200,000 residential units being constructed. As long as there is that imbalance, plus the demographics, prices are going to continue to rise,'' Gillespie said.