Thursday, September 5, 2013

#CRE brokerage...1985 and today

I provide Location Advice to owners and occupants of industrial buildings in Southern California...aka I sell and lease commercial real estate for a living. My wife, Carla and I went to see the movie Jobs recently and the movie really caused me to reflect on just what an impact Steve Jobs made on the way in which we do business as a world generally and as commercial real estate brokers specifically...WOW! As I sit here in front of my Dell laptop which is tethered to my IPad, with my IPhone close by, technology is VERY easy to take for granted...just like we did in 1985....well maybe not so much. Just how far have we come in 28 years?
In 1985:
Then: Steve Jobs was "demoted" from Apple's board of directors...a company he and Steve Wosniak founded in a family garage a few years prior. Now: Steve Jobs R.I.P but not before leading Apple to a market cap in the hundreds of billions by converting millions of technology users to IPhones, IMacs, IPads, IPods, MacBooks, etc...truly stunning!

My company Lee and Associates had 3 offices in Orange County, California...we now have 48 offices across the USA.

In 1985 I had lots of brown hair, only two children, the same wife, a desk, and a phone...Today...grey, three plus two, desk, phone, mobile phone, laptop, IPad, GPS...and that's just at the office. Multiply that by two for home.

Prospecting:

Then: We prospected for new business by visiting the company in person, calling them, or sending them a letter. If we had vacant buildings to lease or sell and signs on the buildings...we maybe got a call from someone who saw the sign and was looking...that's it! Now: Google searches, CoStar, Prospect Now, theBrokerList, Loopnet, Linked In, blogging, Twitter, Facebook, Pinterest, Organized networking groups, You Tube, email, eblasts, autobot calling, texting, CRMs...how many ways there are today to prospect for ANY company ANYWHERE! Virtually no one is invisible anymore.

Survey and Research:

Then: When we engaged a client who was in the market for commercial real estate, we met with the company in person, discussed the requirement, and "bought" ourselves a week so that we could research the available buildings, contact the listing brokers, gather the brochures (hard copy via mail or delivery), have a survey typed, assemble the tour books...including maps with rub on numbers. Now: We conduct the building search at the client's office on our IPads using CoStarGo and/or we conduct the search at our office, create a PDF and email the file including brochures and/or we YouTube a virtual tour of the space and email to the client. What used to take a week can now be done in ten minutes. I have at least four multiple listing services available to use on my desktop and two that are mobile. I can publish a requirement and receive global distribution in seconds using theBrokerList or BrokerRoster or Rofo. Fortunately commercial real estate brokers do not compete on price for our services OR with the abundance of free information on line, we would get skewered. All commercial real estate providers have the same information...it our service and knowledge of the owners and transactions that allows us to create value.

Touring:

Then: We picked up the client, and started the building tour. You better be familiar with the streets because GPS didn't exist. Now: You can practically direct a building tour from the clients office BUT if you have to drive, there are plenty of navigation tools that make driving in different cities very easy.

Negotiating:

Then: An offer was that...binding and signed by the tenant or buyer. The points were entered into a contract, typed and hand delivered to the client for review, approval, and signature. We also collected a "good faith" deposit that was held un cashed until the deal was made and the leases were signed or the PSA was executed. You "actually met" with the cooperating broker in person and submitted your offer. Any responses were also done in letter form and were mailed or hand delivered...remember we had no fax machines! Now: We have these "silly" wimp clauses in a proposal that state that even if I sign this, I am making no commitment to lease your space or buy your building if and until I sign a definitive agreement which I can still revoke if I disapprove...yada, yada. Much is lost today as "expressions of interest" have replaced actual offers and meeting in person is rarely done. Some of my closest friends in the brokerage community are that because the "old days" forced us to meet, negotiate, and get to know one another.

So what is the net effect In My Humble Opinion?:

Technology in commercial real estate has made us faster to respond, better at servicing our client's needs, and quicker to react to changes in the world economy. Our connections are more global and less local. Our relationships are shallower but more plentiful. We MUST filter an incredible amount of data quickly and efficiently to compete...and the competition is fierce. Nothing has replaced a referral from a trusted friend or advisor. The face-to-face meeting still trumps a call, email, text, LinkedIn request, Facebook comment, tweet, etc.

Do I miss 1985? Absolutely not! After all, Grecian Formula is still available for us grey haired old dudes...and I never rocked the mullet, anyway. Plus we got two delightful new additions to our family this year in a new son and daughter...no I didn't sire them, two of our kids got married.