Courtesy of Tech, Community, and Flexibility.
Tech and the attitude that comes with it permeates into every facet of the business world, and commercial real estate is no exception. We all have an idea of what #CRELife is all about, with bold, driven brokers who have an “eat what you kill” attitude. If commercial real estate and tech are to converge – as trends are showing they are and will continue to do – an attitude shift is necessary.
The tech and startup attitude is somewhat in conflict with the #CRELife attitude. Tech and startups, like brokers, are scrappy and fast-moving, but here’s the difference: startups take a community-oriented approach to business, one that’s often lost on folks in the commercial real estate industry. Startups don’t live by the “eat what you kill” mantra, but more accurately assume a “share your spoils” approach, where the team comes first.
Having a Mindset of Collective Consumption.
With the rise of the on-demand economy, smartphones, the internet, and the growing popularity of commercial real estate tech networks, it’s now easier than ever for tenants to find and even book space on their own, without the need for a broker. For brokers in the traditional CRE industry, this is a frightening prospect. Technology is here to take our jobs – right? Wrong. Brokers are a necessary part of the commercial real estate industry and will continue to be for the foreseeable future. But there’s a caveat.
In order to stay relevant to the burgeoning sector of startups, professionals, and young companies looking for commercial space, and to serve this growing demographic, the CRE industry must adopt tech and the attitude that comes with it. As long as CRE professionals (brokers, people) can adjust to tech, they will always be a necessary force in commercial real estate.
So what does that attitude adjustment entail? It requires acknowledging that many startups and new companies expect the office leasing process to be flexible, simple, and tech-driven. And it means knowing how to leverage the available tech tools to cater to those needs. As companies look to lease smaller spaces on flexible terms, it means that brokers have to adopt a mindset of collective consumption to stay ahead, get the most deals, and continue being relevant in the startup world.
Brokers can go after many small deals at once and close those deals quickly (tech encourages speed) using broker referral programs through CRE tech companies. We all know that large deals are difficult to find and even harder to close, especially for young brokers. Tech gives brokers the ability to grow significant revenue from a handful of small deals, and that becomes extremely beneficial in our tech-driven world. By folding tech into CRE and creating a more flexible model for office space discovery and leasing, we can bring these two seemingly disparate worlds together. Then, we can drive more deals for everyone…but, remember it starts with an attitude shift.
Leveraging Technology & Transparency.
What’s the greatest asset that tech provides to the commercial real estate industry? Information. Because of tech, there’s now better transparency into commercial real estate than ever before. There are tons of commercial real estate tech companies that focus exclusively on information in CRE for people in CRE, but for the average Joe to make use of that information, he’ll have to know where to look for knowledge and how to use it.
This new layer of information also changes the dynamic between broker and consumer. Consumers can do a quick Google search for the type of commercial space they need and immediately come up with a list of relevant results. If any consumer can go and find listings on their own, then why do brokers even matter? Well, the truth is, there’s often too much information.
For the consumer, it’s often hard to sift through those “relevant” results in a strategic and consistent way. Maybe as a consumer, you can get square footage, price, and amenities on some listings, but not on others. And because consumers can conduct their own searches, brokers must focus their time to be curators and deal makers, rather than simply “searchers.” Of course, brokers still maintain some exclusive listings, but as CRE options become more abundant and real estate networks grow more complete, these exclusives could become rarer and less important.
A New Attitude.
As the startup life continues to permeate into CRE, the “eat what you kill” mentality will become less relevant for brokers, especially those who are early adopters of CRE tech. A bunch of young commercial real estate companies have already adopted a salaried model for their brokers (or “deal closers” of any name – at LiquidSpace we call them our Workspace Concierge). This salaried model, which puts community before the individual, can partially eliminate the often desperate need for people working in CRE to “eat what you kill”.
If we work together – brokers with tech companies, brokers with brokers, startups with other startups – we can create a CRE world that’s better for everyone, particularly consumers. If people in CRE decide to ignore this necessary attitude shift, consumers will continue to use technology to search, discover, and book commercial space. If you’re not on this train already, you better hop on it. It’s moving fast!
LinkedIn: Richard Heby.
+1 Did I call this or what? Did you catch it?