The Evolving Role of Commercial Real Estate Firms
We often hear and acknowledge that it’s important for an accounting firm to be a business’ “trusted advisor,” but what we're beginning to hear more about is the emerging role of commercial real estate professionals as trusted advisors.
While our Georgia on the Rise survey highlighted the challenges (and opportunities) that real estate firms are dealing with in our state, there is a broad effort afoot by top real estate firms to be much more than a “broker” in the traditional sense. In the Winter issue of NAIOP’s Development Magazine, Christopher Lee said, “Perhaps the biggest role change over the next decade will be within the brokerage industry. The title of broker will slowly disappear and be replaced by an advisor or business advisor, whose role will shift from transactional to a strategic advisory function.”
In a recent conversation with Stephen Bridges*, Executive Vice President at JLL in Atlanta, Georgia, we discussed his view of the most pressing issues real estate firms face and talked a little about how JLL is tackling them.
First, Bridges said the most pressing issues are:
- The time, finesse, process, detail and cost analysis of renewing leases, expanding, relocating, selling or buying facilities in a seller/landlord-driven market.
- The imperative to collaborate with the client’s C-Suite, Operations, Human Resources, Procurement, Supply Chain and Sales groups to proactively determine and successfully execute real estate planning and decisions.
Not surprisingly, Bridges said the most important step in successfully addressing both of these pressing issues is building relationships. To achieve the real estate goals aligned with the client’s business, he says the real estate professional “must understand the pain points and future obstacles that connect to each area of the business.” Real estate decisions are affected by:
- Communications – Open, consistent, and transparent communication between the client and the real estate firm are imperative. A clear understanding of objectives, the real estate, intangible characteristics, and finance requirements and a plan for change management comprise the cornerstone of a solid relationship and reduce risk for both parties.
- Human Resources and Recruiting – What kind of employees does the client employ? What will help them attract and retain the talent they need to successfully run their business? These answers affect location, design and planning.
- Logistics – What kind of transportation access is needed? Some of this has to do with the type of industry, i.e., distribution – which may drive the need for rail access. On the flip side, it may be impacted by employees (see point 2 above), who may desire access to public transportation to get to/from work.
- C-Level Executives – Relationships with the CFO, the CEO/President, General Counsel, Human Resources and the Real Estate Director (for large companies) must be established and actively cultivated throughout the project.
- Building Owners – The real estate professional should have an understanding of the short and long-term goals for the business owners, C-Suite, and employees. This is critical to long-term satisfaction of the site/space selection.
At the same time, there is usually a fairly quick timeframe for real estate decisions and implementation of solutions. This doesn’t leave much time for long-term relationship building, so real estate professionals must create an understanding of their value in a short time frame and must be accessible, knowledgeable and easy to work with. And, of course, trustworthy.
In part two of this series, we will discuss how real estate firms are using technology to help clients (and themselves) make better real estate decisions.
*Stephen Bridges is a member of the Atlanta Chapter of the Georgia Manufacturing Alliance along with Smith & Howard and other Atlanta professional service providers who serve the needs of Georgia's manufacturing businesses.