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Creating A Technology Enabled Commercial Real Estate Brokerage.

patio

They sat underneath the canopy. The sun was high and warm, so they used the shade to keep cool. The waiter walked past and asked if they needed more water.

” Yes that would be great,” he said. He was tall. You could see his head sticking up over the others on the patio.

” I could use some too.” They were both in their early thirties and had known each other since college. He leaned back in his chair and noticed someone he knew a few tables over. He acknowledged them with a quick wave and a nod. “That’s the wife of one of the brokers I was talking about.”

” She looks like she is trying to stay thirty.”

” She may be trying, but she’s mid-fifties at least, and I am trying to be kind.”

” So, let’s continue that conversation that we were having at the golf course the other day. You mentioned that you were thinking about going out on your own or maybe putting some type of firm together.”

” Yes, and I would like to get your perspective and feedback if possible, and I need to keep this between us.”

” That’s not a problem you know me. So you are thinking of going out and competing against the very people who helped you get started.”

” Well, when you put it that way it sounds as if I have no loyalty.”

” I did not mean it that way. I probably should have phrased it differently but how are you going to compete against them? What’s going to be your market advantage and why would anyone use you?”

” Before I even start I know that you know it’s about relationships. I get that, and you get that so let’s say that’s a given.”

The waiter returned and filled their glasses and asked if they needed anything else. They both acknowledged that they were good.

” That could be said about any business for that matter, but I do know you have built up some good connections and worked hard at it.”

” Thanks for that I do try hard, and it’s what has made me pretty good money so far. But I am getting frustrated with the processes and the ridiculous, antiquated system we have to use to do anything.”

” You hear that in many different industries also but sometimes change is slow to come and is that always a bad thing?”

” In this case, I think so. There is no real reason for some of these parts and pieces to be this way when there are obvious alternatives.”

” So how would you set this up?”

” First off I would take at least a more regional outlook and by that, I mean that some of the communities are more interconnected than they have ever been. It’s a broader market and yes I understand about each niche, but it is all commercial real estate. The next thing I would do is think about the firm as more of a digital startup.”

” A startup are you nuts? Are going to whip out the t-shirts jeans and tennis shoes?”

” You’re not listening. But think about how they get started and how cost effective they keep things in the beginning. What’s it cost to get something like that going these days?”

” I think that it depends.”

“And that’s my point. Strip away all the layers and what could you have and at what cost?”

” You need to have some sort of deal system or deal platform or am I off base here.”

” I see what you are thinking. Need to keep as many things under one roof as possible. I’m not so sure. First off one of the things that’s not considered is the way we face the actual user. We keep way too much information away from them. It’s not helping them make a decision and does not create any sense of trust at all. I’m thinking off the top of my head here but as an example have a deal room on Dropbox? It’s free, and you could control access. Another thing all the documents need to be digital and secured. How hard is that in this day and age? How much more could we automate that transaction? Again how many layers of just that could we take away?”

” I see where you are going, but that’s not enough. That’s going to happen eventually.”

” I agree but what about how I get and track leads. There is AI software out there that will do that for me.”

” Is that not the basis of your job? Creating and doing deals. You want to leave that up to a computer?”

” If it helps me do my job better yes. There is mapping software. I mean predictive mapping software that can define an opportunity for a client no matter what class of commercial real estate they are looking for. Then there is the VR stuff that’s just starting to take off.”

” Do you think someone is going to buy a huge asset based off of a VR experience?”

” I’m not so sure about that but that is information about a property that has not been available before and more information as I said equals a better deal and experience.”

” You are always on me about who controls the inventory and how they control the market.”

” The actual users of commercial real estate control the market. They want to know they are making a positive business decision. How is keeping that inventory away from them a good thing?”

The waiter dropped off the check and thanked them for coming. The tall one reached out ” I still owe you from the golf course.”

” Learn to putt that’s all I have to say about that.”

” Don’t even get me started. So, how far down the road with this are you?”

” I’ve been working on it for about three months.”

” Do you have a budget and business plan together?

” I have a pitch deck I put together?”

” You are in startup mode.”

” Just think of the volume of deals you or a team could do if these things were in place and supporting you.”

” Are you pitching me?”

” I thought we were having a payback lunch.”

” It sounded more like a tech-enabled brokers lunch to me.”

They walked towards the parking lot and their cars. Reaching for the door handle the tall one looked up “I’m interested, and I’m pretty sure I can get about five more who would listen.”

” Sounds good anything I can do to help that along?”

” Yes, 90/10 splits.”

He smiled ducked into the car and waved as he pulled out thinking to himself and wondering how many more deals could he do if did help create a technology enable commercial real estate brokerage.

 

 

 

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  • Janice Sangster-Phalen

    90/10 splits in residential are rewarded after a certain level of production or negotiated on reputation of past deals. How many times does your principal come into the office to see the massive conference room? How many time a week does that conference room get used for large meetings? Reduce your footprint and pay the brokers more in splits. I’ll bet a lot of the brokers can log-in and work remotely if they choose and are technologically enabled. Look at “hotel” arrangements for hosting brokers. Walls needed for plaques are archaic. Actually same issues for residential that has higher splits. Time to reduce monthly expenditures and pay brokers more. If the managing broker is producing, reduce the pay and incent them to produce more. They must have relationships. CoStar and Loopnet (Exceligent, where available) have neutralized the in-house database advantage, unless all the information about the client is shared (which won’t happen), so schedule a reminder call and call your potential prospect like every other broker can and every other tech company does with their CRM database.

  • Kathleen Howard

    If you are a lone wolf or member of a small team and have an established CRE career within a small geographical (or otherwise) footprint, then there could be extensive cost savings which would equate to increased earnings. The benefits, however, quickly diminish as you expand your services and the area you cover. Let us know how this works out for you.

  • Rich Edwards, CCIM

    Our office has a 90/10 split, however we are primarily a “resi” office and I was brought in to start commercial division for our millennial and gen-x agents/brokers. We now have all of the bells and whistles, CoStar, Loopnet, CCIM, and tons of social media campaigns, etc… It is all very costly, especially with an opulent Miami (on the beach) office.
    Here’s the dilemma, with all of the technology, it always comes back to relationships , “who do you know,” and who do you need to know. Trying to get those two generations (a little generalization) to bang out phone calls, visit businesses, make appointments and send out “physical” marketing pieces is a tremendous challenge. They and we are all being fed that “technology” is our saving grace. It helps, but we need to have our human element of relationship building lead the way.

  • Daniel Black

    I agree technology will be a key factor moving forward. Any idea on which ones of these technologies may be the most usefull?