“We're going backwards, armed with new technology” is a line from
Depeche Mode’s 2017 opening track to its fourteenth studio album. This
sentiment may very well sum up the feelings of modern life, and it certainly is
reflective of the changes taking place in the real estate brokerage industry.
After a decade or so of falling behind the advances in technology and
communications of other key service industries, the real estate brokerage world
is on a fast-track to catch up, and is empowering independent companies, whose
prevalence diminished during the past 40 years.
This renaissance isn’t led by multi-market corporate real estate
companies. The change is happening locally by a new breed of boutique
companies, empowered by readily available, high-quality education &
training coupled with leaps in high-quality, cutting edge real estate technology.
It’s taking place at the sole proprietor and partnership level by savvy, entrepreneurial,
and educated professionals, who see their capabilities to work together enhanced
by cloud-based technology, a greater transparency of market information and the
ease of gathering, analyzing and sharing data. Back-office staff, marketing,
research and graphics support, are readily available today from the cloud. A
revolution in the bourgeoning, third-party data industry provides not only
transparency of market data and instant download,
but offers it at a fraction of the desk-cost.
Such advances result in
cost-effective agency methods, reduced desk-costs, increased connectivity, and
the rapid absorption of new tools to stay ahead of the industry and to stay in-line
with client trends. Couple this with state of the art working environments and it
becomes clear that there is change coming which will transform the traditional approach
to the brokerage industry.
The rise of the boutique real estate company is a phenomenon for today,
but as with all things in life, it draws comparisons to the past.
Traditionally, real estate services were provided largely by independent
businesses, with very few multi-market, and even fewer global companies. In the
70’s through the late 90’s with globalization swelling, many of these independent
companies were acquired to form the large corporations we have today.
My forecast is this; technology and changing business culture has freed
the real estate practitioner from the need to rely on corporate brokerage companies,
which has allowed them to become more entrepreneurial. That being said, delivering
multi-market and global real estate services to large corporations will remain
primarily the domain of the large corporations. They may continue to
conglomerate, however the delivery of ‘local real estate brokerage services’
will revert to a pre-conglomerate structure.
The return of the local real estate company is underway. Their founders
will lease office suites over shops, or in class B buildings in their market
areas, shedding class A rents. They will form equity partnerships to share in
the returns from their efforts, not just in commissions and they will design a
work environment which will attract the next generation of real estate
professional. Simply adding glass to a corporate office and opening walls won’t
cut it. It’s a technological and a cultural shift.
The boutiques
will provide unapparelled attention to client needs and empower their agents to
take control of their career and lifestyle. It’s happening now and it’s
happening all around us.
Mark Hinkins, CCIM,
FRICS is President & Managing Broker of Trimark Commercial Real Estate, a
San Francisco commercial real estate company. A pioneer in the rise of the
boutique brokerage company, Mark seeks to empower the next generation of
brokerage professionals and enable them to create a successful and fulfilling
career.
Over Mark’s 25-year career, Mark has represented property owners, investors, institutions, lenders and borrowers in the acquisition, disposition and leasing of commercial property across all property sectors including stand-alone office buildings, office portfolios, industrial buildings, land, multi-family communities, medical office buildings, high street retail, shopping centers and special use and mixed-use properties.
Before forming Trimark Commercial Real Estate in 2016, Mark was President & CEO of Hinkins Real Estate Analytics (2011-2016) an investment real estate analytics, brokerage and consultancy firm which works with investors to maximize asset value. Before this, he was an Investment Broker with the Oakland, Calif. office of Grubb & Ellis Company (2001-2011), and a national high-street retail agent with Lambert Smith Hampton in the United Kingdom (1993-2001).
Mark earned the prestigious CCIM designation (Certified Commercial Investment Member) which recognizes experts in the commercial and investment real estate industry. Mark is a Fellow of the Royal Institution of Chartered Surveyors which is a professional body that accredits professionals within the land, property and construction sectors worldwide and is a licensed Real Estate Broker in the State of California.