Massey, Reffkin From left: PaulMassey, Robert Reffkin/ photo credit: Mark Sagliocco@marcojsagliocco

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NEW YORK CITY—With news such as Eastern Consolidated's closing, the coming of blockchain, and Cushman & Wakefield reportedly operating at a loss for the last three yearsshouldbrokers be worried?

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Paul J. Massey, Jr. recently launched the investment sales and capital advisory firm, B6, amove of resounding confidence in the brokerage business. He's hiring 50 brokers. The firm recently signed a 12,010square-foot lease to occupy the entire eighth floor at 1040 SixthAve. with the building's asking rent in the low-$50s, as reportedin the New York Post.

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Massey and Compass CEO Robert Reffkin presented their views onthe brokerage industry's future at an event at 100 E. 53rd St.Tuesday night, produced by CollabNet and Ellipsis, LLC.

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Massey said with Eastern Consolidated, “The owners of that firmwanted to retire. That was a fundamental driver. They had fantastic40-year careers. I believe in the future of brokers.”

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As to technology eliminating brokers' jobs? He pointed out thatthere are multiple variables with commercial leases and investmentproperty. “Human judgment is critical,” said Massey. Technologywill serve to make the industry better and more efficient—noteliminate a need for brokers, he added.

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But Massey said for brokerage firms to succeed, they must treatbrokers as clients. “The companies that survive are all about theagents. They are supporting the agents.”

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Massey and Reffkin at 100 E. 53rd St. Paul Massey and Robert Reffkin, July 23, 2018 at 100 E.53rd St./ photo credit: Mark Sagliocco@marcojsagliocco

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Speaking for the residential sector, Reffkin agreed. He opinedthere is an emotional bias against agents in this country. He notedinstead of focusing on how to make things better, there are oftensentiments of “How do we get rid of agents?” and “How do we get ridof their commissions?”

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However, Reffkin said the most important technology on theirwebsite is a button that gathers feedback from agents. They type inideas. Other agents will add to an idea, creating a running chainof communications. Ultimately, brokers will determine whether achange occurs, by voting up or down.

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Reffkin said leadership has to be grounded in reality, with avision of where to go and a path to get there. Compass is workingto expand to the top 20 US cities and to get 20% market share by2020.

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Although optimistic about Compass's goals, Reffkin noted changesin the following areas:

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(1) Teams are replacing individual agents because they can reapgreater commissions.

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(2) Real estate expenses are rising and agents are using thecompanies less. Thirty years ago, splits were 50/50. Now, they areincreasing across the country. Agents are going back to ownerssaying “I am being overcharged for the value I am getting.” Thereare a lot of people trying to hire agents, so splits are gettinghigher.

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(3) Brokerages are buying software piecemeal that suitsindividual needs. This kind of technology investment is notcomprehensive enough for firms, and is costly in a low-marginbusiness. This will need to change.

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“As an industry we have to come together. We have to find waysto collaborate and we are not doing so,” said Reffkin.

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“The company that wins is the company that has a help button ora suggestion button or is really listening to their people. That isthe future,” said Massey.

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Betsy Kim

Betsy Kim was the bureau chief, East Coast, and New York City reporter for Real Estate Forum and GlobeSt.com. As a lawyer and journalist, Betsy has worked as the director of editorial and content for LexisNexis Lawyers.com, a TV/multi-media journalist for NBC and CBS affiliated TV stations in the Midwest, and an associate producer at Court TV.