It’s been years since I worked as a commercial real estate broker, but even then I was familiar with the DNA of #CRE report, which takes the pulse of the brokerage business across areas like demographics, strategies, and innovation. Produced by the teams at the commercial real estate software company Buildout and the online commercial broker marketplace TheBrokerList, it always fascinated me to see surveys with the opinions of others in my industry, in other words, my competitors. Imagine my surprise and excitement, then, when I found out I’d be leading the writing of the 2021 edition, years later.
This year’s edition of the DNA of #CRE report has plenty of insights, highlights, and data points for brokers to pore over. But I’m here to suggest that non-brokers give it a read, too. Today, I want to make the case that everyone interested in the future of commercial real estate should pay attention to how brokers innovate.
Brokers are uniquely positioned to make for good weathervanes of real estate innovation. The best brokers in each market keep excellent tabs on what everyone in their universe, whether that is multifamily sellers or office occupiers, tend to be trying and looking for. Their teams themselves often cross-pollinate, with team members departing for owners and developers or bringing in new talent from property management firms. High-performing brokers are usually plugged into the pulse of their region’s real estate scene. At the property level, brokers need to be at least aware of at the very least all of the local buildings in their focus areas to be able to do their jobs well.
What all of this means is that top brokers have access to some of the best innovation intelligence streams in the commercial real estate world. So the signal is strong, but how do brokers tune out the noise?
Even at the top, plenty of brokers have their own hesitancies and biases when it comes to innovation. Many skew older, and with that sometimes (but far from always) comes an element of adoption hesitance. Our DNA of #CRE survey found that over 31 percent of responding brokers said that they have been working in the field for 30 or more years. If they were crushing it for a majority of them, why rock the boat?
Amongst the brokers I have talked to, much of the hesitance to innovate comes from a sense that the solutions they’re seeing don’t actually solve the kind of challenges they are facing day in and day out. The big one of course is prospecting. The inverse of this is that brokers tend to be pragmatic with their adoption of new tech solutions. If a broker is able to be convinced that a solution is right for them and it helps them make more money, there is a good chance that they will be using that tool for a long while.
Perhaps the biggest reason why you should keep an eye on how brokers innovate is that there is probably no other role in real estate that can be so singularly entrepreneurial, at scale. Saying that making it as a junior associate takes a lot of work is an understatement. But, it is a vocation where someone can become a broker straight out of college, with very little resources of their own, and transform into a fully self-sufficient brokerage professional in a matter of five to ten years. This is particularly doable if they are on a strong team. The same is less predictably true for fields like development and investing, which require a lot of capital and greater risk, or property management, which requires a big organization.
With that level of attainable entrepreneurship comes an ability to make more innovative decisions by themselves. While brokers always have a designated broker, firm leader, or CEO to be ultimately accountable to, the fact that brokers can be so entrepreneurial and self-driven within many organizations means that there is a lot of room for these professionals to make their own tech choices on the fly, without the need to wait for bureaucratic green flags or managerial approval. If you want to watch innovation happen in real time, brokers might be the group to look at.
I’m speaking in generalities here. There are plenty of brokers, as human as the rest of us, who buck the trend and either invest in tech solutions they don’t really need or flat out deny even solutions that would be very helpful. But ignoring those outliers, observers of real estate innovation should strongly consider paying attention to the types of media and solutions being directed at brokers. These articles, solutions, and innovations make for a telling microcosm of the commercial real estate business as a whole.