I had a couple of beers with an old-school guy in that’s active in the New Jersey corporate real estate scene the other day. We had a spirited discussion about where the value of a broker resides and the future of the industry.
I argued that brokerage has changed and will never go back to the way it was. The value that we traditionally associate with brokers, specifically “knowing the market” is increasingly irrelevant. Costar, Loopnet, Trepp, RealCapital Analytics, 42 floors, Compstak, HiRise, etc, have all done a great job of aggregating basic market intelligence.
When I first started in the industry, brokers held the keys to the corporate real estate market. Costar was in its infancy and Black’s Guide was the bible. Brokers were expected to have encyclopedic knowledge of the buildings in the market, vacancies, rental rates, and tenants with pending lease expiration. But today, a lot of that information is publicly available, some of it free, some behind a pay wall. But it’s out there.
Today, it’s less necessary for brokers to know every minute detail about the market. Brokers still have to understand local market dynamics, but a solid grasp of negotiating strategy and what is necessary for getting tenants and landlords to agree to terms is paramount. But for both landlord and tenant brokers, there is also an expectation that brokers understand construction costs, know how to overcome challenges with technology, and be comfortable reviewing legal documents. I’ve also been asked to comment on space utilization, best practices regarding telecommuting, and the new trends around the “workplace of the future.”
This is all a lot more complex than keeping track of the vacancies in the market. Our value is much more about being consultative and much less about holding information hostage.