A fundamental aspect of real estate is its relative illiquidity amongst investment options. You can’t just quickly sell your investment property, even if it is just a single family rental property. While some companies, such as Opendoor, seek to add liquidity to the home sales market, the industry, and particularly the commercial side, remains highly illiquid. It just isn’t that easy to ditch a 200-unit apartment or a large office building.
The illiquidity of real estate is a good prompt for another, related real estate question: just how self-serve can the business get? And what’s more, what is the optimum level of self-service for industry participants? As e-buying grows, the question may become “you can buy a home through the internet sight unseen, but do you really want to?” Matterport’s 3D camera tours allow for a great sense of what a space looks like from every angle, but is the feeling of a home or office really conveyed through a flat computer screen? The dynamics of sunlight angles through a kitchen window? The reality of living near a construction zone, even if you understand on paper what you’re signing up for? In other words, at what point does convenience take precedence over quality?
It’s a question I dealt with every day as an investment sales broker. Under the Cushman & Wakefield Alliance, my team had an enormous amount of research at our fingertips. CoStar, Apartment Insights, and plenty of other data sources provided multiple layers of analytical insight into every transaction. But as easy as the data was to view and review at the click of a button, we still found ourselves secretly shopping apartment complexes if we were particularly curious about rents or floor plans. Efficient information access, for all its convenience, can’t overcome “do it yourself” sweat equity.
Brokers now are facing another version of the same question. Cushman & Wakefield’s recently-announced partnership with design platform Saltmine arms company employees with the ability to rapidly lay out interior spaces for their clients. It’s a great addition for brokers and real estate services professionals at Cushman & Wakefield, who now have the opportunity to produce space visualizations for prospective tenants. Todd Schwartz, Cushman & Wakefield’s President, Americas Platform & Service Delivery, recently told us that “it allows a client to imagine what a space could look like, and begins a conversation about the elements that make for a successful workspace. Designers and architects work with clients to bring their vision to life; Saltmine can help facilitate and inspire that conversation, and speed up the deal cycle.”
Of course, this could be a double-edged sword. While the specific purpose of the collaboration is to arm Cushman & Wakefield’s professionals with another tool with which to provide great client service, it may not be long before tenants themselves start asking why they can’t just use Saltmine, or a similar tool, themselves. Brokers offer tremendous value through their combination of experience, knowledge, and the ability to advise on specific properties. If clients develop the ability to access clear information and spatial visualizations for those very spaces, the brokerage value proposition is called into question. “There’s great value in being able to pick up the phone and call a broker you know has their finger on the pulse of the market, and is on top of emerging trends that can affect a client’s business,” Todd added.
His words are excellent commentary on the nature of the brokerage business. They’ll remain accurate until clients and space users have the ability to access the information they need themselves.