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You Are A Commercial Real Estate Broker. How Long Will You Still Matter?

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Well you would have to think forever right?

Maybe not so much!

We all know the basics tasks of a commercial real estate broker. Let’s look at them and then think about it another way.

Listing and Marketing.

Listing as we know is the basic agreement between the owner and broker to market the building.

“Marketing “the building today is what? Send in “data/info” on a specific building to the marketing department “chick” and let her do that special pdf flyer magic. Blast out a spam email every three days for a month and….Whew! Now that real work! You of course make sure you send the two or three links the building is on to your client to make sure they see it on the fancy inter webs  and you are pulling that data from where? Go ahead admit it! Yea it’s the same data as the last company that had it right? Shhhh I won’t mention the LoopConetDarkStar company.

The building is already marketing itself nanosecond by nanosecond. Linked up and interacting with it’s own environment.Defining it’s value and comparing itself to every other structure in the world.Without you.

Analyzing the data.

Think back to the days when a young hot shot wannabe deal maker comes busting out of school ready to take on the world. What do you do with him? Bury him that’s what. It’s the old “you need to know how to analyze the deals before you create one” sceniaro. Of course that fresh talent grinds and grinds until it DIES  staring at the computer. Then of course it is then time to slot in another fresh face world beating MBA to sit and squander their talent also.How much does an prime analyst make 50-60-80 dollars an hour?

You know what’s next and yes……guess what you can do…… “outsource” that task now for what……. 20-25 dollars an hour?

Now that data is available in real time and automatically analyzed with pre programmed software. Why do we need an analyst at all?

Defining the market.

By rate by pricing by class by location by……nothing that can’t be readily sourced by anyone!

Relationships.

Yes yes yes I know it’s what brokers Really do. People still do business with people. I am sure that will continue to a point and at….What Negotiated Discount Price? That strategy will…….discount us all.

As a side.

Mentioned writing something like this to a broker friend. He said I was “fear mongering”. Hey asshole I know your reading this. Go climb into your bomb shelter with your canned peaches and don’t forget to put the tin foil on your head for protection. I heard that Russia still has the bomb.

And.

A very nice guy named Chad commented on my site that none of this stuff matters because there are 10 Ways Old School Commercial Real Estate Is Still Kicking Ass.This is one of the most popular posts I have ever written and I know why. It speaks directly to the seasoned broker that is hoping praying pleading that this technology thing does not make them obsolete and that the way they did it “back in the day is by god how we still need to do it today! Dammit!”

So this is not exactly a brand new thought process about brokers and their relevance in the future commercial real estate market.

I have generally written about this in the past and it got me banned from LinkedIn groups nasty emails from brokers and Rah Rah comments that said “WE Will Adapt And Survive”….and so be it but think about this.

You can scream and yell at the messenger all you want but the fact remains.

The data and the client/user is creating the real commercial real estate market…without us. NOW!

How long will we matter?

You Tell Me!

 

Photo Credit:http://www.flickr.com/photos/modern_nomad/363477569/

 

 

 

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  • Are 10k, 15k, 50K SF Deals getting done without a broker? Do you have specific examples? Or are you referring to small start up company deals?

    • Duke Long

      Michael,
      What????

      • just posing the question. I don’t see larger deals getting done without a broker just yet. However, I think potentially more and more landlords/investors are going to see the $ they can keep in their pocket and stop outsourcing to 3rd party landlord leasing teams, keep the leasing in-house, and outsource lead generation to online search platforms for a fraction of what they have to pay a broker…

  • Jeremy Cyrier

    Great article Duke. We’ve done a lot of soul searching at our company over the past 3 years and have concluded that while the people still want to work with people, they are really looking for insights from us. It’s our ability to deliver actionable insights to the marketplace that creates the benefits everyone wants from commercial real estate.

    • Duke Long

      Jeremy,
      Excellent point!

  • Michael Lieberman

    Good questions. I think that you have pointed out trends that may – or may not – be happening for corporate/portfolio sized transactions. Those tend to involve more standarized methodology (e.g. Argus analysis), more access to comparable and competing data, and the ability to plug a generic employee/analyst into the standard frameworks.
    The other end of the real estate spectrum is the local tenant/buyer/landlord/seller. They have less access to data, less ability and inclination to spend the time to become knowledgeable, and do not typically have an “in-house” team of experts. I believe there will always be a place for the broker for these people and these types of transactions. And that’s where your “…Old School…” article resonates and is relevant.

  • Chris

    Gotta lay off that singularity/Ray Kurzweil stuff. May end up being true, but it sure is depressing…

  • JohnEric Siewert Pöllabauer

    Super great article and questions Duke. ( I meant to give you a Positive Star Rating and didn’t know how to get rid of the negative sign in front of the number – sorry about that!) You definitely have a tremendous grasp of the subject matter as well as excellent vision, intellect and instinct. If you put yourselves in the shoes of the clients, or event better still. have discussions with your clients or prospective clients and enquire from them what their expectations and desires are, I am sure the responses will be enlightening. But as others have responded in the past, better to look in the rear view mirror to see what is coming down the turnpike.

  • Duke,

    You know the answer, value.
    Add value or resign yourself to obsolescence. Shoe leather, mobile phone bills and tires
    may be what it looks like (or not) but that is not the value of a broker.

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