People look to Corporate Real Estate as a huge asset class with some really large Fortune 500 service providers focused on it. On the surface, it shares many similar qualities to fields like Finance and HR where every company on earth requires it. CRE also takes up a huge portion of any company’s balance sheet which should make it a focus.
Unfortunately, the built-in financial models for real estate will continue to prevent real estate from evolving in 2019.
Until the huge, landlord paid commissions stop funding the bulk of the industry, brokerage firms and brokers have too much incentive to keep the status quo. They hold an undo influence over the industry and do not want the corporate side to take more ownership of their portfolio.
This may seem like a strange position for someone that has spent over a decade in the field (a full decade from within a brokerage firm) to say. But I’ve seen firsthand how commissions can destroy relationships, submarine corporate partnerships, and drive professionals to be given incomplete information for their decision. Because the company doesn’t pay for any of this, they aren’t in great position to push back too hard. They don’t fund their own vendors.
So I’m sticking with my position of little changing until the world comes around to really understand how subversive landlord paid commissions are to the industry.
PS- Before you start ragging on me because commissions are only out of control in certain markets, I realize that. But for large companies, the outsize impact of those markets skews everywhere else. For small companies, you often aren’t able to get top talent to focus on your needs because you don’t drive enough revenue.