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The Commercial Leasing Process is Holding Brokers Back

A single source of truth can help

In Collaboration with

If we all have anything in common, it’s that we don’t have enough time. Time is the most limited resource and technology has successfully changed how other industries work via powerful time management and collaborative platforms. You would think this would mean that technology has changed the way commercial real estate is bought, sold, and leased; after all, those in CRE are busier than others as they only eat what they kill. With so many time-consuming and potentially zero return tasks like prospecting or marketing, brokers may feel like no matter how much they work, they’re not doing enough. The only way to do enough is to streamline efforts. 

Nevertheless, the CRE industry seems to still operate a few, or a dozen steps, behind and the leasing documentation process is no exception. There isn’t one reason to point blame to, though. A lack of trust, incredibly complicated processes, adherence to the status quo, and frustration with technology are all reasons why the transaction process hasn’t changed much since the advent of a collaborative shared doc. “A broker’s lack of desire to embrace technology mirrors the way we respond to just about everything when there isn’t an existential threat,” explained Dave Cairns, Senior Vice President CBRE. “In our day to day lives, we tend to like to maintain the status quo, but when the pandemic hit we were forced to respond swiftly, changing many of our behaviors overnight.”

The opportunity for the CRE leasing process to evolve and catch up via technology is here. The world will keep evolving and we have to be willing and able to change with it. Without change, opinions and expertise will become out of date and fail.

“Good enough”

A big obstacle in commercial real estate is the nostalgic appeal of traditional processes. “I’ve witnessed quite a bit of cognitive entrenchment in the commercial real estate sector over the years. People seem to get stuck in their old ways and legacy processes, which limits the possibilities of innovation” stated Marat Safir, Co-founder and Principal of TMG Real Estate Advisors. Cognitive entrenchment is when experienced groups become rigid under pressure and regress to what they know best. “Just because something has worked well for many years doesn’t necessarily mean it will continue to do so for the foreseeable future. We need to be open to forward-thinking mindsets, in order to further progress our industry in uncovering innovative tools that eliminate inefficiencies, as well as provide intrinsic value to all stakeholders,” he continued.

Just because something has worked well for many years doesn’t necessarily mean it will continue to do so for the foreseeable future. We need to be open to forward-thinking mindsets, in order to further progress our industry in uncovering innovative tools that eliminate inefficiencies, as well as provide intrinsic value to all stakeholders.

Marat Safir, Co-founder and Principal of TMG Real Estate Advisors

Decades of brokers have carried out the process in the same or a similar way and have been successful, so why change what’s been working? Since processes have evolved and brokers can do things in a better, faster way, the real question is why are brokers still operating like they don’t have these capabilities? “The real estate industry is now at an inflection point, playing catch-up at a time when the pandemic has created a paradigm shift in the way the industry operates,” stated Patrick Leiser, Director, Product Management with JLL Technologies’ global leasing group.

Despite technology advancements, brokers may not know there are better options available. “In general, the documentation process is fairly straightforward and that process doesn’t change based on deal type or size,” explained Steven Jaffe, CEO of Propdocs, a CRE transaction platform. “Drafts are emailed to recipients who review, comment, and hopefully track changes before it’s sent back. This goes on until terms are agreed upon, during which there is a battle about trust in each other and the process itself.”

The challenges of the back and forth process are felt across many industries, and workflow management platforms have answered the call. Solutions like Asana, which has grown 97 percent year-over-year, Monday.com, and AirTable have created places for many users to participate towards project completion with less friction and more efficiency. However, these platforms aren’t the right fit for the collaborative leasing documentation process.

The generational divide is becoming more evident as these platforms are adopted in other industries. “The question for the next generation is, will you stick with the tried and true, or will you sacrifice time and money today for a better tomorrow?” asked Jordan Gorjian, Director of Leasing at Gorjian Acquisitions.

Trust in the system

Trust in the leasing documentation process is a two part equation. Every time a document is released from one party to another, there is a loss of control and a dependency on trusting the individuals handling the document as well as the technology it passes through. With each revision, a new version of a document is created and just because a comment makes it onto a document doesn’t mean it’ll be interpreted correctly.

Between user error and software misalignment, documents often need to be reviewed line by line to ensure accuracy and identify all changes. The inefficiencies in this process can equate to tens of hours and thousands of dollars while also elongating the time it takes until the deal is done. “Trust shouldn’t be a distraction from getting the deal done,” added Jaffe. “If the process becomes frustrating, you’re risking losing the deal. It’s easier to frustrate people than it is to make them happy.”

Throwing technology at this challenge isn’t the entire fix as studies show that Americans have a weakened level of interpersonal confidence. PEW Research’s “Trust and Distrust in America” report revealed that 71 percent of Americans think people are less confident in each other than they were 20 years ago. When asked why, one research participant explained that the heavy reliance on cell phones and computers for short, indirect and impersonal communication has lessened our assurance that others are presenting information in a sincere and honest fashion.

The need to present information in a trustworthy fashion has been addressed in many software platforms like Asana, Jira, and Trello. Used heavily by engineers and developers, these platforms increase accountability and tracking within collaborative projects. While there is the possibility for real time collaboration that almost feels like being in the same room, there is a learning curve and it’s not the right answer for many real estate professionals. On the other hand, real time collaboration isn’t always desirable such as when internal team edits need to be finalized before being shared with another party.

In CRE, word of mouth is a trusted source to learn new methods for processes. Learning about what’s available is one challenge but getting up and running with it can be another. “You have to take the time to save the time,” stated Deena Zimmerman, Vice President at SVN Chicago. “People can get overwhelmed and sure, it’s going to be a bit of work to learn the new tech, but then you and your clients will benefit. I’ve won deals by showing how I incorporate tech because it makes processes much more simple than how it used to be.”

You have to take the time to save the time.

Deena Zimmerman, Vice President at SVN Chicago

One place to do it all

Deals are rarely decided in person where there is one edition of a document and any needed clarity on comments is instantly available. Technology can replicate parts of this experience by hosting a place for the leasing process to take place. Google Docs offers a place for collaboration but has strict role-based permissions, lacks e-signatures, templates, payments, and other functionality needed. For companies that do not use Google Suite, Office365’s Microsoft Word has the same one-sided experience and checks even less required boxes. Plus, with today’s relevant ease of converting PDF to editable formats, “uneditable” isn’t really so. Many companies utilize DocuSign for signatures and while it’s possible to leave comments while signing, the document is already at the finish line. The result is that many different software options are used in conjunction and with each transfer, upload and download, the risks for error, loss of confidentiality, and greater inefficiency grow.

The one consistency amongst these software options is that email is the channel of choice to update others. Unfortunately, according to a 2017 study published by the Journal of Experimental Social Psychology, spam emails and dubious attachments have conditioned us to mistrust our email inbox. This means more emails go to the spam folder, fewer emails are opened, and the entire process is delayed. Additionally, email creates an opportunity for multiple versions of a document to exist simultaneously.

Today’s brokers need a consolidated place that recreates the in-person experience of trust, transparency, and accuracy. By offering the ability to complete every step in the leasing documentation process on one platform, there is now inherent trust in people and document integrity. “Simply speaking, there are three main steps in the leasing document deal: creation, negotiation, and finalization. Using a single, cloud-based platform throughout the entire leasing documentation process elevates it to the level of efficiency we want, we need, and we should expect,” said Jaffe.

The days of starting and finishing deals in person are mostly behind us but using technology as a tool to increase transparency, trust, and efficiency can keep everyone on the same page. Deals that have one living edition of a document move faster, creating opportunities for more deals to be done. As Cairns said, “We’re using 10-year-old plus technology to do our jobs. Of course this makes no sense, but we are human and if there isn’t pronounced pain to change, we won’t. But with technology eating the world, that pain is around the corner, so those who get out of their own way will win the day.”

We’re using 10-year-old plus technology to do our jobs. Of course, this makes no sense, but we are human and if there isn’t pronounced pain to change, we won’t. But with technology eating the world, that pain is around the corner, so those who get out of their own way will win the day.

Dave Cairns, Senior Vice President CBRE

The brokers of yesterday were tied down to mundane and tedious tasks. “Tomorrow’s brokers are figuring out how to automate some of those functions into a system that allows them to compile critical information. Spending less time with busy work and contextualizing valuable data sets enables brokers play a more advisory or consultative role with our customers. Those brokers that will continue to lean on technology to augment various daily activities and focus on strategy, rather than drilling down on purely the transaction, will ultimately garner more successful end results,” added Safir. 

Brokers optimizing their leasing documentation processes through technology don’t need every software available, they just need, as Zimmerman put it, “a few tools for the toolbox and use them efficiently.” There are many options but today’s brokers need a single source of truth that offers a solitary place for their transactions and keeps everything straightforward and secure. One solution that does many things reduces the onboarding time required, too, enabling brokers to hit the ground running for their clients and ahead of the competition

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<div class="wpforms-container wpforms-container-full" id="wpforms-132234"><form id="wpforms-form-132234" class="wpforms-validate wpforms-form" data-formid="132234" method="post" enctype="multipart/form-data" action="/the-commercial-leasing-process-is-holding-brokers-back/?utm_source=piano&#038;utm_medium=email&#038;utm_campaign=16624&#038;pnespid=sKtkFSBVOroW2..OtGi1Sc.V4UmjRZB5MOzjzukw9wFmU78KTul0.f5tiL6.rs0iYzmgu5R8Lw" data-token="862c80701f7834d2a089aad0087f9415"><noscript class="wpforms-error-noscript">Please enable JavaScript in your browser to complete this form.</noscript><div class="wpforms-field-container"><div id="wpforms-132234-field_1-container" class="wpforms-field wpforms-field-name" data-field-id="1"><label class="wpforms-field-label" for="wpforms-132234-field_1">Name <span class="wpforms-required-label">*</span></label><div class="wpforms-field-row wpforms-field-large"><div class="wpforms-field-row-block wpforms-first wpforms-one-half"><input type="text" id="wpforms-132234-field_1" class="wpforms-field-name-first wpforms-field-required" name="wpforms[fields][1][first]" required><label for="wpforms-132234-field_1" class="wpforms-field-sublabel after ">First</label></div><div class="wpforms-field-row-block wpforms-one-half"><input type="text" id="wpforms-132234-field_1-last" class="wpforms-field-name-last wpforms-field-required" name="wpforms[fields][1][last]" required><label for="wpforms-132234-field_1-last" class="wpforms-field-sublabel after ">Last</label></div></div></div><div id="wpforms-132234-field_2-container" class="wpforms-field wpforms-field-email" data-field-id="2"><label class="wpforms-field-label" for="wpforms-132234-field_2">Email <span class="wpforms-required-label">*</span></label><input type="email" id="wpforms-132234-field_2" class="wpforms-field-large wpforms-field-required" name="wpforms[fields][2]" required></div><div id="wpforms-132234-field_3-container" class="wpforms-field wpforms-field-text" data-field-id="3"><label class="wpforms-field-label" for="wpforms-132234-field_3">Company <span class="wpforms-required-label">*</span></label><input type="text" id="wpforms-132234-field_3" class="wpforms-field-large wpforms-field-required" name="wpforms[fields][3]" required></div><div id="wpforms-132234-field_5-container" class="wpforms-field wpforms-field-text" data-field-id="5"><label class="wpforms-field-label" for="wpforms-132234-field_5">Job Title <span class="wpforms-required-label">*</span></label><input type="text" id="wpforms-132234-field_5" class="wpforms-field-large wpforms-field-required" name="wpforms[fields][5]" required></div></div><div class="wpforms-field wpforms-field-hp"><label for="wpforms-132234-field-hp" class="wpforms-field-label">Phone</label><input type="text" name="wpforms[hp]" id="wpforms-132234-field-hp" class="wpforms-field-medium"></div><div class="wpforms-submit-container"><input type="hidden" name="wpforms[id]" value="132234"><input type="hidden" name="wpforms[author]" value="228"><input type="hidden" name="wpforms[post_id]" value="133649"><button type="submit" name="wpforms[submit]" id="wpforms-submit-132234" class="wpforms-submit om-trigger-conversion" data-alt-text="Sending..." data-submit-text="UNLOCK THE REPORT" aria-live="assertive" value="wpforms-submit">UNLOCK THE REPORT</button></div></form></div> <!-- .wpforms-container -->
[wpforms id="131996" title="false"]
<div class="wpforms-container wpforms-container-full" id="wpforms-131996"><form id="wpforms-form-131996" class="wpforms-validate wpforms-form" data-formid="131996" method="post" enctype="multipart/form-data" action="/the-commercial-leasing-process-is-holding-brokers-back/?utm_source=piano&#038;utm_medium=email&#038;utm_campaign=16624&#038;pnespid=sKtkFSBVOroW2..OtGi1Sc.V4UmjRZB5MOzjzukw9wFmU78KTul0.f5tiL6.rs0iYzmgu5R8Lw" data-token="69c9072e041bb8398591c655d6e0b5f6"><noscript class="wpforms-error-noscript">Please enable JavaScript in your browser to complete this form.</noscript><div class="wpforms-field-container"><div id="wpforms-131996-field_1-container" class="wpforms-field wpforms-field-name" data-field-id="1"><label class="wpforms-field-label" for="wpforms-131996-field_1">Name <span class="wpforms-required-label">*</span></label><div class="wpforms-field-row wpforms-field-large"><div class="wpforms-field-row-block wpforms-first wpforms-one-half"><input type="text" id="wpforms-131996-field_1" class="wpforms-field-name-first wpforms-field-required" name="wpforms[fields][1][first]" required><label for="wpforms-131996-field_1" class="wpforms-field-sublabel after ">First</label></div><div class="wpforms-field-row-block wpforms-one-half"><input type="text" id="wpforms-131996-field_1-last" class="wpforms-field-name-last wpforms-field-required" name="wpforms[fields][1][last]" required><label for="wpforms-131996-field_1-last" class="wpforms-field-sublabel after ">Last</label></div></div></div><div id="wpforms-131996-field_2-container" class="wpforms-field wpforms-field-email" data-field-id="2"><label class="wpforms-field-label" for="wpforms-131996-field_2">Email <span class="wpforms-required-label">*</span></label><input type="email" id="wpforms-131996-field_2" class="wpforms-field-large wpforms-field-required" name="wpforms[fields][2]" required></div><div id="wpforms-131996-field_3-container" class="wpforms-field wpforms-field-text" data-field-id="3"><label class="wpforms-field-label" for="wpforms-131996-field_3">Company <span class="wpforms-required-label">*</span></label><input type="text" id="wpforms-131996-field_3" class="wpforms-field-large wpforms-field-required" name="wpforms[fields][3]" required></div><div id="wpforms-131996-field_5-container" class="wpforms-field wpforms-field-text" data-field-id="5"><label class="wpforms-field-label" for="wpforms-131996-field_5">Job Title <span class="wpforms-required-label">*</span></label><input type="text" id="wpforms-131996-field_5" class="wpforms-field-large wpforms-field-required" name="wpforms[fields][5]" required></div></div><div class="wpforms-field wpforms-field-hp"><label for="wpforms-131996-field-hp" class="wpforms-field-label">Comment</label><input type="text" name="wpforms[hp]" id="wpforms-131996-field-hp" class="wpforms-field-medium"></div><div class="wpforms-submit-container"><input type="hidden" name="wpforms[id]" value="131996"><input type="hidden" name="wpforms[author]" value="228"><input type="hidden" name="wpforms[post_id]" value="133649"><button type="submit" name="wpforms[submit]" id="wpforms-submit-131996" class="wpforms-submit om-trigger-conversion" data-alt-text="Sending..." data-submit-text="UNLOCK THE REPORT" aria-live="assertive" value="wpforms-submit">UNLOCK THE REPORT</button></div></form></div> <!-- .wpforms-container -->