"Big changes under way in the U.S. commercial real estate industry aren't shaping up the way most brokers anticipated," says Livingston, chairman/founder, NAI Realvest Partners Inc., Maitland, FL.

Just back from the REALCOM conference on commercial real estate technology in Las Vegas, Livingston says "rumors were rampant" on the continuing consolidations and mergers of national brokerages.

"Major consolidations in the U.S. have reduced the number of large-scale brokerage companies to six and most commercial brokers anticipate that further consolidation will result in only two or three large U.S. firms," Livingston says.

As that contraction occurs, smaller firms have a chance to step to the plate and win a fair market share of the business once dominated by the big hitters.

"Today, the large national brokerage firms handle less than 15% of the commercial property transactions in the U.S.," Livingston tells GlobeSt.com. "The plain fact is that most commercial property transactions are done on a local basis and don't involve the big national and multi-national corporations."

He says, "Brokerage networks, whose members--independently-owned and operated local brokerage firms--share leads and opportunities with colleagues outside their markets off the national brokerage companies their stiffest competition."

But the biggest challenge and opportunity, Livingston says, is that "the large national brokerage companies face a trend toward outsourcing corporate real estate needs."

He says, "U.S. corporations tend to look for independent real estate professionals to act as advisors or consultants in large transactions, such as (the sale of) a 50,000-sf office building."

A real estate professional for 40 years, Livingston says "the brokerage business is a low-margin enterprise that entails a large overhead and is exceptionally subject to the vagaries of the marketplace, from bad business practices to low-value transactions."

The broker says "this trend contributes to consolidation as a way to reduce overhead, but it also leads to fractionalization within the brokerage community."

He says, "As corporations and brokerages look for ways to reduce costs, demand for efficient, highly knowledgeable local brokerage experts is growing."

Small brokerage firms will continue to follow a trend to specialize in their local or regional markets. "A small firm that has absolute knowledge of a market region or a market segment is much better able to serve large and small users than a national company," Livingston says.

However, to capture a share of corporate business, the small brokerage first has to be in a market where corporations are headquartered.

In Orlando, where Darden Inc., the restaurant chain, is the only big-name corporation with local world headquarters, soliciting corporate business becomes "a real problem," Livingston tells GlobeSt.com.

To overcome that handicap, small firms "need to be aligned across the U.S., and maybe the world, with a networked group of capable brokers," he says. "And that network has to have name recognition. Like NAI, for example."

Another avenue for capturing corporate business is to "do a very good job for one manager or division (that) may lead to national representation," Livingston says. Forming a joint venture with a national company and then sharing real estate revenue could also help bring in the new business.

Regularly publicizing successful deals might get the attention of corporate decision-makers, the broker says.

"The real key is to be in a network that is perceived to operate as a separate national company," Livingston says. "This may prove to be the best model (because) it sure keeps overhead down."

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