The Internet had knocked them for a loop; “disintermediation” was the buzz word. Just as residential real estate agents, travel agents, and other fee-charging service providers had seen their incomes take a dive due to the explosion of information over the web, even sophisticated stock trades were being discounted and sometimes even performed by “do-it-yourself” investors.
It was only a matter of time, the Ivory Tower guys were saying; the information age was making everything a commodity. Soon everyone would extract the information they needed from the web, bypass the manufacturer’s rep, the real estate agent, the equity trader – service providers couldn’t hoard their information any longer – the matchmaker function was being hijacked by the web.
…And they weren’t totally off base. The travel industry was one of the hardest hit – it was too easy for a traveler to book flights, hotels, rental cars, and even vacation travel packages – themselves. Travel Agencies failed spectacularly. The percentages taken in stock transfers took a nosedive (but the volume of trading increased so radically, also due to technology, that it offset the percentage drop), and many large manufacturing and product-assembling entities began short-circuiting their “rep” networks to go directly to their customers.
Car Dealers felt the sting; now everyone was an expert on “real” car dealer costs (related to MSRP, but loosely) and could buy cars more intelligently. Real Estate was sure to follow, the experts said. All over the country, local Multiple-listing services were putting all of their listings on the web – enabling all who were technically proficient to do on-line shopping, price comparing, and establishing the “right” price before actually talking to an agent.
The commercial brokers didn’t know what to expect. In the late ‘90’s there was such a proliferation of new investment in technology infrastructure, some involving the need for real estate, that Commercial Brokers just rode the wave.
…And then everything hit the wall, beginning with the bursting of the tech bubble, the recession that started in 2000, and the deepening of it after 9/11.
What emerged was a different world, somewhat corrected, but one still dependent on efficiency improvements that were mostly accomplished in developed nations by technology – and labor cost savings accomplished by outsourcing and exporting of our manufacturing to 3d world labor markets.
Commercial Brokers dodged the bullet. Not only was the world changing so rapidly that market expertise was necessary, but technology made brokers far better at performing necessary services.
They needed to be. Corporate America suddenly realized that the worst asset management internally was their real estate investment. Smaller companies were getting stung with suddenly obsolete property. Retail leases that looked like blue chip investments for a generation with regional shopping malls dictating desirable locations were suddenly in the wrong places; suburban office development offering free parking and easy amenities, combined with a lessening need (due to technology) for all functions to be physically located together, and easier commutes – putting America’s “downtown” on notice.
Corporate excesses and meltdowns such as with Enron, WorldCom, Tyco and Adelphia, among others, further complicated the real estate world; suddenly auditors were knocking on doors, and the rush to put corporate America’s real estate house in order made FASB (Financial Accounting Standards Board) a household word – further putting commercial brokers to the task.
When will it stop? Or…will it stop? Within the Commercial Real Estate industry, those who have thrived have been those with good relationships. Is that enough?
Nope. Anyone who has cultivated relationships for years only to see the important contact replaced, fired, part of a company sale, or often, called to task by superiors to “comparison shop” knows too well how fragile the hold on an account can be. No, it takes more than a friendship, more than comfort level.
It takes the skills necessary to make a difference quickly. If a broker/agent can’t do that, he’s an endangered species. Hanging a sign in front of a building and waiting for the phone to ring doesn’t cut it any more. Meeting a management team and spending a half hour telling them how good you are will get you a quick exit. Running a search team around a market without adequate understanding of what they want will make you just another outsider very quickly.
Look around you today. Try to identify the brokers who are passionate about being good at what they do. You’ll run into a lot who aren’t – and who may spend a lot of time bemoaning their bad luck. But when you find a good one, and you know that he or she is good – you’ll be looking at someone who has evolved into an agent who will make his/her clients perform a lot better.
They’re a long way from being a “Brokestocker”.