The honeyguide is a unique bird. Not for its appearance or song, but because of its behavior: it is renowned in the areas it lives in for its peculiar habit of leading people to beehives. It’s a mutually-beneficial encounter, since after the person opens up the beehive, the bird feasts on the leftovers.
It’s a metaphor for plenty of business interactions in general, but one particular scenario has a few particular highlights. That scenario is commercial real estate brokerage. For investors, occupiers, and landlords, the reality of the situation is often that spending the time and energy to secure an appropriate match for a given space is impractical or impossible. Brokers exist to fill that gap, and they’ve come to represent a central part of the commercial real estate business.
But what if, in the honeyguide analogy, the hive advertises itself, too? Where then does the bird fit in? What is the role of the broker in a world in which workspace owners have strong digital presences for their office “hives”? The answer is that brokers still have a critical role, but it might take a little more creativity than in years past.
The truth is, brokers are more than just search agents for properties. The broker’s scope of services certainly includes the property search but would not be complete without the careful management and shepherding of the due diligence and closing process, as well as the provision of context-specific advice to the client. Our dialogue on brokers is in many ways a double-edged sword. Even in the PropTech community, where we often discuss the broker as a human face to the transaction, we neglect to consider the non-sales aspects to the role. Sure, title and escrow companies can handle certain parts of the closing process, but for clients without a legal representative on hand, the broker serves a critical role as an advocate throughout the entire process.
One company that has acknowledged the full scope of the broker’s contributions is Singapore-based GorillaSpace, an online workspace marketplace. GorillaSpace goes a few steps beyond listing sites like LoopNet by offering curated spaces and an interactive, highly-customized search process. Ben Eckblad, GorillaSpace’s co-founder, told us that “with brokers, we see our offer as more complementary. We believe brokers play an important role in delivering the more complex transactions, where expertise in negotiations and in the preparation of documentation is a requisite. By the same token, simple transactions with flexible space operators and requiring only a license agreement can be concluded online.”
In GorillaSpace’s model, brokers still have a role as advocates, representatives, and contact points for property companies, all completely necessary roles more or less removed from the traditional sales-heavy vision of a commercial broker. Until the day that the due diligence process is instantaneous and closing is as simple as the push of a button, until the day that property buyers, sellers, and renters can get through a transaction completely question-free, we will need brokers in the industry to make sure everything goes smoothly for all parties involved. Of course, other companies have different models. Branded flexible workspaces like WeWork present an opportunity for tenant rep agents, especially as the co-working operators continue to try to fill their spaces with larger leases.
The long term role of commercial brokers is very much up in the air, particularly as automation tech begins to take over some of the more banal duties of the profession. But even as offices get glitzier, as the beehives put bigger and bigger billboards up, the brokers – the honeyguides of the real estate world – will still have an important job to do.