Getty Images The following segment was excerpted from Third Avenue Small-Cap Value Fund Q1 2026 Shareholder Letter. During the quarter, the Fund initiated a position in Compass, Inc. ( COMP ) Compass, Inc. is a technology enabled residential real estate brokerage focused on the luxury and upper-middle segments of the U.S. housing market. The company operates a national platform that combines the n...
Getty Images The following segment was excerpted from Third Avenue Small-Cap Value Fund Q1 2026 Shareholder Letter. During the quarter, the Fund initiated a position in Compass, Inc. ( COMP ) Compass, Inc. is a technology enabled residential real estate brokerage focused on the luxury and upper-middle segments of the U.S. housing market. The company operates a national platform that combines the nation's largest agent network with proprietary software tools designed to enhance productivity, client engagement and transaction efficiency. Under this business model, agents are independent contractors who generate commissions on the purchase and sale of a home and revenue is generated primarily from commissions on home sales. U.S. existing home sales are at historically depressed levels, with U.S. residential transactions at their lowest levels on a per capita basis in 60 years. Compass has been pressured by a combination of higher mortgage rates, affordability challenges and constrained housing inventory, weighing on transaction volumes and commission revenue across the industry. At the same time, investor uncertainty has arisen around the long term economics of residential brokerage, fears of commission compression, heightened agent competition and potential technological disintermediation. On the other hand, Compass' recent transformational merger with Anywhere Real Estate (HOUS) creates the largest residential real estate platform globally, expands Compass's agent and brand footprint and diversifies revenue through recurrent high margin franchise, title, escrow, and relocation revenue streams. We expect the industry will continue to move towards a structure in which there are several dominant platforms that effectively serve as exchanges for residential transactions. Compass is very well positioned to emerge as one of those dominant exchanges capitalizing upon the strength of the company's digital search platform combined with a leading selection of property listings...
The war in the Middle East is putting pressure on the Japanese government to consider energy-saving measures, a challenge for Prime Minister Sanae Takaichi as she seeks to calm public anxiety over potential shortages. Japan stands out among countries heavily dependent on energy from the Persian Gulf, having so far refrained from calling for conservation measures seen in places like Australia and S...
The war in the Middle East is putting pressure on the Japanese government to consider energy-saving measures, a challenge for Prime Minister Sanae Takaichi as she seeks to calm public anxiety over potential shortages. Japan stands out among countries heavily dependent on energy from the Persian Gulf, having so far refrained from calling for conservation measures seen in places like Australia and South Korea. The nation has relied on releases from its strategic oil reserve , while seeking alternative sources of supply. The government is mindful of not hurting economic growth or spurring panic among consumers. The public appears keen for more action though. Some 74% of those surveyed in a recent poll by Nikkei and TV Tokyo said energy-saving is needed. In another poll last week by broadcaster ANN, 64% of people said the government should call for conservation measures. “The public is very conscientious, so when the government makes a request, people tend to make a real effort to comply,” Trade Minister Ryosei Akazawa said at a press briefing on Friday. “We should be careful not to exaggerate things or spread horror stories that make people overly anxious,” he said, adding that measures were not needed at the moment. Takaichi has said repeatedly that Japan has enough oil for the time being and that the country has secured stable supply into next year. However, the country has not been immune from the knock-on impacts of the war, now in its ninth week, and the double blockade of the Strait of Hormuz. A shortage of naphtha has led to a major toilet maker suspending new orders and is also hitting petrochemical and other home-fixture firms. Major business and industry organizations have also taken a careful approach to commenting about the need for demand-side measures. Hideo Suzuki, the executive managing director of the Petroleum Association of Japan, said in an interview with Nippon TV on Thursday that Japan was the only nation reliant on Middle Eastern oil that hadn’t ...