Envisioning the broker of the future
07 Jul 2020
Before I became a principal in 2001, I was a broker at CBRE for almost two decades. Brokers who started their careers around the same time that I did used manual tools like the strip system, which I have described in a previous post. We accessed a massive physical file of available properties that listed buildings by their square footage and mapped out the properties using an array of 1-by-14-inch strips of paper that we copied into a master list as part of our marketing materials. We were the gatekeepers of the information, the foundation of every deal. But that function has now become replaceable.
Today, with databases like Redfin, LoopNet, CoStar, and other free and instantly available online property listings, brokers must adapt to make themselves pertinent and valuable amid the shifting sands or find themselves irrelevant and dislodged by technology.
So, how does a broker today make themselves necessary and essential to the marketplace, or at least to private owners like HPP? Cue the broker of the future. At HPP we look to identify and cultivate those primary characteristics which will foster success in our projects for all stakeholders. These key characteristics are in-depth market knowledge, confidentiality, client trust, and responsiveness. These qualities are enduring and timeless and will help develop successful brokers who are not only valuable but essential to their client’s success.
In-depth market knowledge
The emergence of readily accessible information on available properties means that the brokers of today and tomorrow need more insider knowledge than ever to be successful and to add value for their clients.
The basic information on all properties is floating out there on the web, which makes it the broker’s job to discover and then offers insights on projects and deals that are not readily available. Insights such as detailed explanations and analysis of a property’s past and present value, projections for its future trajectory, and most importantly, a thematic understanding of how this property will create value for the buyer. Brokers who have only horizontal knowledge will be marginalized by modern technology but brokers who attain and utilize vertical knowledge will prove to their loyal customers that technology is not everything.
Confidentiality and trust
As the risk of potential conflicts of interest rises in real estate brokerage, so does the value of a broker who is trustworthy, respects confidentiality, and genuinely represents the interests of clients rather than only his own bottom line. In this space, we have previously questioned why an attorney is not permitted to represent both the plaintiff and the defendant in a lawsuit, but a broker can play both sides in the same real estate transaction and garner commissions from the buyer as well as the owner. An honest, trustworthy broker will be careful in this situation and will be fully transparent by disclosing any conflict of interest to all parties involved in the transaction. This is done because of the understanding that an upstanding reputation is a highly valued asset.
Our industry moves fast. The evolution of technology moves faster. A successful broker needs to stay several steps ahead of the competition, and the pace of technology. How is this even possible?
Personally, since shifting from brokerage to development, I found a solution by turning a challenge into an opportunity.
One of the perceived obstacles I have faced in my own career is that I have garnered 19 years of experience in industrial brokerage, and another 19 years as a principal. You would think that I would struggle to be relevant in today’s market and forge a coherent identity as a professional.
However, I have used the diversity of my experience to my advantage. I have purchased, redeveloped, and leased properties in smaller markets like Arkansas, Iowa, and West Virginia where technology does not have as large an impact because of limited supply and capital. I recognized where I could gain a competitive advantage and where I could not, but I have not ignored this country’s major metropolitan markets either.
In the larger market areas, HPP and I can always be more responsive and personable than an automated online system or institutional owners whose processes can take weeks to navigate or whose profile is so focused on risk avoidance that they cannot be flexible in structure or tenancies. This advantage opens opportunities with properties with a vacancy, environmental issues, or functional obsolescence. Just as we as landlords and developers constantly try to improve our responsiveness and services; brokers who continue to improve market knowledge, customer service, and trustworthiness will never go extinct and brokers with these traits are more relevant and valuable now than ever before.
Bruce Haas is Managing Partner at Industrial Redevelopment.