It’s a bit cliched to say “there is no better time than now” to do a thing. But right now, in July of 2020, this statement for Corporate Real Estate teams has never been more true.
Covid-19 has provided a global reset for every company around the world, in every industry, with every workplace model to stop and reconsider what they are doing. Fundamental truths of real estate are no longer fundamental. Change will be coming no matter what. It’s almost a given that all companies will occupy their space differently in 2021 than they did in 2019.
At no point in the past 20 years has the gulf between Corporate and Commercial real estate been more obvious. The needs and incentive models are completely twisted around like never before. Corporates are talking about getting rid of space in every single boardroom as they discover that people can work more effectively from home than anyone had ever dared to imagine. Commercial real estate is seeing a terrifying lack of demand for new leases, especially the large ones that can establish market trends.
I am curious to see what kind of relationship gets settled into between these two worlds. Neither can function without the other but the power has largely been on the commercial side for a long time. With non-real estate leaders beginning to take a more active role in disposal strategies, the power dynamic cannot help but flip for at least awhile.
In my perfect world, this is the moment for the entire commission-driven model to be re-evaluated. There’s not a lot in the market to easily replace it, but some enterprising brokers may be able to get incredibly creative. I’m not saying that commissions have no role in the future of commercial real estate, but they create an enormous disincentive to really look out for your client’s best interests.
This crossroads is unique. It’s going to be interesting to travel.