Commercial real estate professionals differ from our residential colleagues in many ways.
But, how would our industry change if we adopted some of the practices of our residential brethren? Well, to coin an old phrase — “seven ways from Sunday” — here it goes.
We would share our inventory with a realty board.
Residential agents belong to boards of Realtors. Many fine things are accomplished with this connection. Available houses for sale are readily accessible through a common multiple listing service. Status – active, pending, and closed – are required of each listing. No such clearinghouse exists for commercial real estate.
We would be more consumer-facing.
Once a listing is published through a realty board the information flows to consumer websites such as Realtor.com, Zillow, and Redfin. That transparency enables you to search for a house in your bathrobe from the comfort of your kitchen table. You can see commercial listings on LoopNet, but the process is flawed, the information incomplete, and the goal is to point you toward a commercial broker for details.
We would track “real metrics.”
Because the multiple listings are consistent — the number of houses on the market, number of houses sold, market time and new sale escrows — they can be tracked and provide residential agents a true look at what’s happening. In CRE, we are forced to react to our “gut feel” for activity or to rely upon global stats such as vacancy factors or absorption.
Our use of technology would be much greater.
Wow! This topic alone is column-worthy. CRE professionals have been slow to adopt technology. We are an aging industry stuck with 1980’s methodology. Doubt this? Some in my office still use a Rolodex!
The majority of our deals would be sales not leases.
Generally, 8 of 10 deals we do are leases. Our counterparts transact just the opposite – with many residential agents never doing leases.
Most of our transactions would be owner based.
Many in the commercial trade only represent occupants. These are known as “tenant rep” firms — a specialty that places companies that seek to occupy buildings as owners or tenants. Shunned are assignments that require sourcing a tenant or buyer for a vacant building on behalf of the owner.
Standardization would be encouraged.
Boards of realty have strict codes of conduct and forms for everything. Agents “toe the line” lest they be ousted from the board and lose access to available inventory. A death sentence of sorts as a potential ouster creates a sense of cooperation among agents and firms.
Allen C. Buchanan, SIOR is a principal with Lee & Associates Commercial Real Estate Services. He can be reached at 714.564.7104 or abuchanan@lee-associates.com