It used to be that the commercial real estate market information stayed fresh for five or six months. Now it goes stale in 30 days "and soon clients will want data no more than 15 days old," said Whitney Peyton, senior managing director for CB Richard Ellis in Minneapolis.
He believes the model for the industry's information should be Wall Street, which gives its investors up to the minute updates on how their investments are performing.
"We used to control the information flow; now we have a more dynamic relationship with our clients," says H. Ross Ford, president of TCN Worldwide.
Clients want brokers perform other services as well, such as managing risk. In fact, while consulting fees used to account for less than 10% of his firm's revenues a decade ago, Peyton said that now they account for 30% and he would like to see it go to 50%. "It's more dependable income," Peyton says.
Bob Angleson, president of Eden Prairie, MN-based Welsh Cos., agrees: "Corporate services is a significant growth area."
The brokers discussing the brokerage business at the recent RealShare Minneapolis conference in downtown Minneapolis differed on whether the consolidation in the brokerage industry was over.
"The turmoil is largely over," said Clint Miller, president of Northstar Partners.
Pointing out that although CB Richard Ellis' recent merger with Insignia makes it the largest commercial real estate brokerage company in the world, Peyton noted that it still has only about 4% to 5% of the total fees. Given how fragmented the industry remains, he thinks there is plenty of consolidation to come.
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