Real estate outsourcing has been accelerating over the past five years. This is due in part to outsourcing continuing to be better perceived within organizations and the CRE outsource providers continuing to improve their services and capabilities. Outsourcing in CRE has can be as simple as a single function (transactions for example) or as complicated as full outsourcing (transactions, projects, facility management, technology, payments, etc.).
This trend is going to keep accelerating. Largely the current growth in outsourcing has been via large firms but the growth over the next 3 years will be from small to medium sized firms.
Why will smaller businesses start outsourcing their real estate services? Because as the big outsource providers improve and streamline their services it will be a simpler matter of applying their processes to smaller firms. This has been a global trend in outsourcing in general. You need some large firms to set the stage for what outsourcing should be like in an industry but once it’s set you gain scale through the number of clients – not just by winning only big assignments.
3 years from now it will not be uncommon for businesses with 3 to 100 locations having fully outsourced their entire real estate function (other than key internal personnel) to one of the big CRE service providers. It’s also easier to move a smaller business than it is to adjust a large one. Trying to implement a proper lease admin system is much more straightforward for less than 100 leases than it is for 500. Partly because of sheer scale, but also because of the number of people involved.
The same is true for every other service. It’s much easier to establish and maintain processes for a smaller organization than a Fortune 500 one (even if they think they are able to push change).