Technology has turned almost every business completely upside down. These days, rapid change and disruption are the only constants to be expected, and the commercial real estate business is no exception. The availability of information and the speed at which it flows has changed the way brokers interact with clients and affected the way investors and companies make decisions.
In the past, the real estate broker was the gatekeeper of all of the critical information clients needed. Only brokers had access to detailed information about prices and rents on properties for sale or lease. If a business owner or investor wanted to know what was available in the marketplace they had to call a broker – this was the broker’s primary role.
In today’s world, the equation has flipped. Buyers and users of commercial real estate are researching their choices on their own and narrowing those choices before they contact a broker. The broker is no longer the gatekeeper of data – it’s all out there for anyone to find. The client can now seek out commercial real estate availabilities online through a variety of choices. A quick Internet search will provide demographic information and specific property information on the county property appraiser’s site, and Google Earth can even be used to “drive” the market from the client’s office. Many properties have their own websites with video tours, photos and detailed floor plans. All these tools are free and entire searches can be accomplished without even getting in a car to tour the market.
So, what is the commercial broker’s role now? If brokers are no longer the gatekeepers of proprietary market data, why are they needed? Here are the top four places a commercial broker adds value in today’s market.
- Consulting: Brokers help clients navigate complicated transactions. Despite attempts to commoditize the commercial real estate business, no two deals are alike. There is no such thing as a standard lease or a standard contract. There are also market standards on how rents, square footage and expense pass through amounts are calculated, but there are variations in all of these. Navigating a commercial deal requires knowledge and expertise, and brokers deal with these issues on a regular basis whereas an office user, for example, might only be involved in a lease negotiation every five to seven years.
- Relationships: Relationships are important to any business in any industry. Part of our company’s value proposition is the depth of the relationships that we bring to our clients outside our local market and the properties we represent. We have done business in many other parts of Florida over the last several years and developed key relationships in doing so. Creating, nurturing and maintaining these relationships are a big value add for our clients and help us close more deals.
- Marketing: Commercial brokers know the best way to display and market commercial real estate. Since technology has allowed users and investors to do more homework on their own, it is crucial that the most professional, relevant property information is available and easy to find. A broker’s listings are the products they sell and their website is the store. The features and benefits of these listings must be articulated and presented in clear, concise and professional ways.
- Exposure: The best marketing in the world doesn’t matter if no one sees it, which is why exposing commercial real estate to the right audience is key. In our company, we use an expression that we market with a rifle and not a shotgun. We spend a lot of time and effort making sure we are finding and targeting the right groups of investors or users when we market our commercial listings.
The stakes in commercial real estate are high. Although the broker and client dynamic has changed, the services that a qualified commercial real estate broker can provide are more valuable than ever.
Nick Banks is the managing director of Front Street Commercial Real Estate Group located in Gainesville, Florida. Front Street offers brokerage, management and mortgage banking services to its commercial real estate clients. Nick is a graduate of the University of Florida where he serves as an advisory board member to the Bergstrom Center for Real Estate Studies. www.FrontStreet.net