The last three days I’ve focused on large account level trends for CRE. But the biggest change is going to be the increased prominence of one-off projects and decisions. Whether an organization outsources transactions or manages them internally there is going to be an increase in the importance of local delivery.
Most brokers (all?) are very entrepreneurial. The best of the best are going to realize there are two ways to make money:
- Become a critical part of a large CRE service providers global delivery team.
- Become the best at delivering projects in their market (regardless of the firm they are with or whether they are independent).
Outsourcing of services actually emphasizes this. If the outsource provider isn’t strong in a certain market they will still be bringing in outside help. Especially because they likely have KPIs associated with their delivery. The better the result the better they score. Therefore they are going to want best-in-class delivery regardless of the market/firm doing the delivery.
3 years from now there will be a renaissance of local and regional CRE firms focused on transaction delivery.
Relationships will be more important than ever. But instead of the relationships being between the broker and the client, it will be between the broker and the outsource providers. They will need to market their services as best in class in a market and the safe choice for local delivery.
This also means that brokers who do regional work over a large geography are largely going to be pushed out. They are too spread out to be best in class local and too small to actually cover a region successfully by themselves or with their small team.