It’s financial leaders like Realogy’s Charlotte Simonelli who inspired HousingWire’s latest award Program, HW Finance Leaders. This newest award recognizes the top finance executives in mortgage origination and real estate who are driving financial performance, expanding margins, improving liquidity and helping their businesses access the capital markets.
Simonelli took over the role of executive vice president, chief financial officer of Realogy Holdings Corp. in March 2019. As CFO, Simonelli is responsible for all of all financial functions across the company’s multiple businesses and brands, including financial reporting, planning and analysis, accounting and more in addition to acting as the company’s treasurer.
Realogy reported $1.9 billion in revenue in Q3 of last year, an increase of 20% year over year, or $307 million.
HousingWire reached out to Simonelli to learn how Realogy is continuing to manage its successful financial profile in a year full of rapid change and accelerating volume.
HousingWire: While many industries were sidelined by COVID-19 over the last year, 2020 was truly a remarkable year for mortgage and real estate companies. What role did you and your team play in helping Realogy navigate 2020 and emerge successfully?
Charlotte Simonelli: Realogy’s financial strategy was a critical component in our ability to own the recovery. Prior to the pandemic, we’d been laser-focused on strengthening our financial profile and investing in our strategic priorities, including technology innovation and lead generation, among others. Those efforts proved to be advantageous through the crisis, allowing us to execute from a position of strength and arm our affiliated agents and brokers with the tools and technology they needed to help keep America moving. Our team played both offense and defense: we continued to invest in strategic initiatives, made proactive moves to take care of our people as best we could, identified smart temporary cost savings, and stayed laser-focused on strengthening our balance sheet.
As volume accelerated, we did not lose sight of our financial goals and were able to take advantage of both our momentum and a strong market to further strengthen our balance sheet. In June, we priced a secured debt offering of $550 million, capitalizing on favorable terms and remarkable investor demand, which allowed us to preserve liquidity and retire all debt due in 2021. Later in the year, Realogy delivered its biggest third quarter on record. Volume was up 28% year-over-year, revenue was up 20% year-over-year, and we were able to successfully capture more incremental transaction economics from our title business and mortgage joint venture. We exited the quarter with $380 million of cash and paid down our revolver in October. While still preliminary, our fourth quarter closed transaction volume numbers also showed very strong year-over-year growth.
We continue to thoughtfully manage Realogy’s financial profile today, including preserving our ample liquidity and accelerating our debt reduction efforts while still investing in the business. Just this month we were able to successfully upsize a new unsecured debt offering to $600 million at a very attractive interest rate. In the past six months, we have been able to tap the markets for over $1 billion, giving us even more flexibility as we look ahead. And from where I sit, as investors continue to show excitement about our direction and the long-term potential in the market, the future looks bright.
HW: Not all finance organizations are created equal. In your view, what characteristics and organizational alignment really separate the most effective finance teams from the ineffective?
CS: Across our various business units and brands, Realogy’s finance organization is home to both real estate veterans and industry outsiders, which allows us to use our expertise to make solid business decisions while also fostering innovation. We are focused on driving our strategy and capitalizing on our strengths. I joined Realogy just under two years ago from large, multi-brand companies in the consumer product space. Much of my previous experience was in identifying efficiencies while also finding ways to leverage the collective power of multi-brand businesses. People might think consumer products would never translate to the real estate services business, but I find those experiences inform my work every day as we move to simplify our business and harness Realogy’s size and scale to create value for the affiliated agents, franchise owners and customers we serve.
HW: How does your team work across the company – from the C-Suite to front lines – to be as effective and impactful as possible?
CS: Everything we do is with the success of our affiliated agents and brokers in mind, which in turn drives value creations. Realogy’s teams across every brand and business unit, including our title business and mortgage joint venture, work in close partnership with business leaders to create value for our agents so they can close deals. When we work united by this singular goal, being effective and impactful becomes easy. Our focus from a financial perspective continues to be on simplifying our business, strengthening our balance sheet and doing it all efficiently in order to be as agile as possible to support our agents and brokers where they need us most.
Nominations for the HW Financial Leaders award program close this Friday, January 29. Click here to nominate a finance executive.