Has technology in support of commercial real estate been a little oversold historically? Coy Davidson thinks so. At least, he says, it has to the degree that CRE listing services, apps, mapping and the like are touted as “disruptive”. In The Tenant Advisor, Colliers International Senior VP Davidson makes the observation that the last fifteen years of the commercial business has seen major advances and important efficiencies brought to the industry, but that these have not, as sometimes has been touted or warned, turned the basic business on its ear and made brokers, reps, consultants and the whole cast of professional characters obsolete.
Well, it is 2013 and corporate tenants are still using brokers to select properties and structure transactions and property owners are still using brokers to market their real estate assets for lease and sale despite the fact that relevant property data exists and is accessible on the web. Furthermore, who is in the market for property both tenants and investors alike is no longer a brokers best kept secret.
I contend that little has changed and the demand for brokerage services will not diminish anytime soon, if at all because of one simple fact.
The reason is that commercial real estate deals are relatively complex transactions that involve multiple disciplines and participants: owner and user, consultants (brokers, architects, attorneys, contractors.) Leases and Purchase and Sale Agreements are complex legal instruments that can involve hundreds of thousands to millions of dollars.
I think Coy’s right, but I’d say that the issue centers more on marketing of technology than actual technology. “Disruptive” is a loaded word and technology offerings that propose to up-end the basic process of commercial real estate are almost always to be taken with a grain of salt.
If brokers, consultants, reps and the like suddenly found themselves without access to the internet for a month, that ringing phone and the face to face meetings hashing out the complicated features of unique deals wouldn’t stop. Users of space, owners of space, shapers of space would all remain, and the need to own, to use and shape remains.
That said, while nobody doing deals would be out of business, it would be a nasty month to be sure. Particularly because prospecting and research would be thrown back into the stone age. We’d never want to willingly give up our favorite listing services. But the fact is trillions of dollars worth of commercial property deals happened in the stone age. Some things in this business are eternal: space, users, owners, buyers, shapers and consultants. People.