Time to let go?
Leasing and or tenant information. Is this the true cre holy grail? Why is this information held in such high regard? What makes it so critical? Is the information so sacred that it will never ever be revealed to the public?
Here is a quick summary of the way it is:
The brokers value proposition or “pitch.”
“We serve as your strategic advisor, lowering your real estate costs and occupancy risks while maximizing workplace flexibility and productivity. We’ll analyze your business drivers and occupancy needs, identify and evaluate appropriate options, and manage lease negotiations. In fact, we’ll be your on-call expert for all your leasing and lease administration needs.” Pretty standard stuff and I am sure versions of this are used just about everywhere.
Brokers also gather and aggregate critical information and data.
As we sit here today that information is still directly held by brokers. Let’s be honest, they are holding on to it for dear life. Brokers tend to be less forthcoming about some of the sensitive deal points of completed transactions. Term, renewal/escalation clauses, extra TI allowances, signage and expense provisions are critical and rarely disclosed items.
Many commercial representation agreements include confidentiality provisions, so the broker may be prohibited from disclosing details of their work. If there are no confidentiality provisions they still hold that info back, maybe only sharing bits of the info with trusted colleagues and in a vague and opaque way. Hey, without that critical data what would happen?
What about the financial sector?
Once upon a time, to find out the price of a stock you had to call your brokerage firm. They had all the critical information needed to make a sound decision about a particular stock. When a real brokerage firm started providing the near real time prices on their website, they thought they wouldn’t need as many people in their call center, and reduced staff.
What actually happened is that clients called asking more complex questions about trading strategies, not only did the clients have more interest in the stocks themselves, they needed even more guidance. Sounds pretty simple when put in that context.
It’s time to let it go.
In a market with great transparency, the only brokers that won’t be necessary are those that can’t provide those services (those that had been previously making commission checks by hoarding data as opposed to providing valuable service). The guidance of a good broker is essential, especially with the added complexities of commercial deals. What type of environment have we created for the cre clients? What is their real experience?
Does it really need to be tied to the source of the data? Having data transparency eliminates a major headache (data collection and verification) and frees up the brokers time to focus on their strengths: analysis and decision making.
The market shifts?
Some may say this will NEVER happen. I disagree. At what point does the data not become a commodity? When will a major brokerage or company not use that transparency as an advantage to let their brokers/agents or representatives compete in the marketplace?
My guess is soon very soon. Don’t think so? Tell me why!
Photo via Flickr: http://www.flickr.com/photos/jenlen/