Sands, Dunn Divisions to Merge

Fred Sands Realtors on Wednesday said it will drop out of the commercial real estate business by merging its Sands Commercial unit into the brokerage division of Charles Dunn Co. Inc. The value of the deal was not disclosed.

Founder and company President Fred Sands said the move will allow him to focus on his larger and better known Brentwood-based residential brokerage business, which includes more than 50 offices and about 1,500 agents statewide. In contrast, Sands Commercial has only a single, 25-agent office in West L.A.

“It was somewhat of a distraction,” said Sands, who wants to concentrate his time on expanding his residential real estate brokerage to 500 offices within five years. Sands Commercial, which ranks among the 20 largest commercial brokerage firms in Los Angeles, started operations about 15 years ago.

Sands will end up with a 20% interest in the brokerage division of Los Angeles-based Charles Dunn, which is also involved in property management. The acquisition will give Dunn, which has three offices in Los Angeles and Orange County, a presence in the booming commercial market on the Westside of Los Angeles.

Last year, the commercial brokerage units of both companies sold and leased $600 million worth of real estate, according to a Dunn spokesman.

“Sands Commercial is a strategic fit in Charles Dunn’s expansion plans for the western United States,” said Walter J. Conn, chairman and chief executive of Charles Dunn. “It works very well for us.”

Conn said his commercial brokerage unit also expects to pick up customer referrals from Fred Sands’ residential brokers. In turn, Dunn agents will refer their clients to Fred Sands when shopping for homes.

Conn said the 76-year-old firm is looking at other commercial brokers for potential mergers and partnerships.

“We are talking to several other smaller companies that would benefit from the use of our name and reputation and the resources we have available,” Conn said.

Sands said that he had tried to expand his commercial brokerage through merging or acquiring other rivals, including Charles Dunn. “We attempted to buy commercial real estate companies, but we were unsuccessful,” said Sands.

The merged commercial brokerage company, which will assume the Charles Dunn name but retain all the Fred Sands agents, will operate in a vastly improved commercial real estate market, which has benefited from the region’s economic expansion. At the same time, however, Charles Dunn will be up against such huge rivals as CB Commercial, Grubb & Ellis and Cushman & Wakefield, which dominate the market.