"There is this argument in our industry right now that if banks begin doing their own development deals, they may not then use a third party leasing and property management company," Crossman says. "Additionally, we would end up competing with them for new development sites so we would have another competitor and lose a client." The Trammell Crow executive cites the growth of the REITs in the 1990s as an example of the above scenario.

"While we made money selling them properties, their growth limited our growth in third-party leasing and management because REITs typically handle their own accounts," Crossman says.

"So if banks started developing on their own and used inhouse services, for example, that would hurt," the broker says. "On the other hand, if banks began looking for deals and used third-party firms and would consider doing joint developments, our business would increase."

Crossman says he is betting that's what will happen if banks are permitted to duplicate services currently being offered by full-service real estate firms.

"I think this is a more likely scenario as I believe that banks would be more likely to realize that it would be more cost effective to outsource," the former Faison Associates professional says. "Having a big inhouse team when deals are slow can be very costly. But by outsourcing, banks could more easily choose when to get in and when to get out of the market."

Crossman sees the entrance of banks into the commercial real estate sphere as an opportunity for brokers "to grow our relationship with them" as partners and not as adversaries.

Instant Insights /

New Thinking: Broker Feels Banks Could Boost Brokerage Business

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