There was once a time when real estate firms were - to say the least - conservative in their approach to change and technology. That was before the Internet, before globalization and the accompanying revolution in technology. Today, these same firms are in a mad scramble to keep up with their clients' demands for more and better services, and they're using every tool available to keep ahead of the competition.
Never before has the full-service real estate firm been called upon to provide quite so much service to its clients in so many different areas. In one sense, current trends reflect that outsourcing is being taken to the next level - 'you do the real estate functions for me that I once did in-house so that I can concentrate on my core business,' say many of their clients.
In addition, clients expect their real estate compatriots to move at the same speed that they do - faster and faster every day.
They want it all and they want it yesterday. The firms that are poised to be the greatest successes are those that are finding ways to provide that level of service.
Around the country, officials at full-service firms agree that speed, high-quality service and innovative solutions powered by technology and a desire to keep up with the changing demands of clients are vital to success.
Providing new levels of service In the heart of the Midwest, Kansas City, Mo.-based Glaze Commercial Real Estate Advisors Inc./CRESA is part of an emerging trend of providing these unprecedented levels of service to real estate clients. Glaze/CRESA provides commercial consulting to companies and professional service firms. Its sole purpose, according to company president Lawrence Glaze, is to assist clients facing real estate decisions with whatever products and services they require.
"We decided that we're going to use our tools and techniques in assisting the corporate user," says Glaze. "The market is moving so much faster. More analytical tools are required, so it's very difficult for one firm to do the investor side, the ownership side, as well as the corporate side."
Its focus is, indeed, on the corporate side. To manage clients' new demands, Glaze/CRESA has bundled workplace strategic planning with an understanding of corporate services.
"We have married those two disciplines with the transaction and implementation side," says Glaze, who asserts that the company is filling a niche that had been largely underserved in the country's heartland.
Glaze offers corporate clients an extensive menu of services from which they can select "all of the above" or pick and choose those items they need. The company may be called upon to handle a task that the client does not have the personnel for, or it can become the client's independent real estate department.
Company officials - like those at many other full-service firms - say they offer their clients not only products and services, but also solutions to their particular problems.
"It's a great time to be in the business if you're a company with the right talent that understands the workplace issues and how space can impact a company's profitability," asserts Glaze. "It's critical to understand how corporations view themselves internally and how they can respond, and how they communicate, and how they get projects approved internally."
He says that because of its expertise and understanding of the processes, Glaze is part of the decision making process from the beginning.
"We're brought in with the other department heads to strategize what is the best solution - both short-term and long-term," he says.
Internally, the firm maintains a wide variety of talents, ranging from architects to space planners to specialists in every area for clients who need to relocate or make other decisions.
"We are able to evaluate different locations and recommend which ones are going to be able to fit them best," says Glen Miller, vice president for workplace services at Glaze/CRESA. "We can manage their move from a space layout standpoint and then really handle the process of getting that space built out for them and occupied. We can even handle the specifics of actual relocation, of moving them from point A to point B."
Technology = solutions It has almost become a cliche that technology is changing the way the real estate profession does business. Nowhere is that trend more evident than in the full-service segment of the market.
Chicago-based Transwestern Group is one of a growing number of companies that show how the net can be used to bring people and resources together from widely varied locations for a single project.
Transwestern's Trans-ePortal is a collaborative web-based data warehouse strategy that permits the company to integrate many different applications across all of its service lines. These include owner advisory services, management services, corporate advisory services, investment services and development services.
"We have a client for whom we're providing a disposition service in the West," says Charles Nash, executive vice president, and Chief Information Officer for Transwestern Group. "For that same client, we also are acquiring and developing a new headquarters site. We're handling sublease requirements for them in the Midwest, and we're handling leasing requirements for them in the East."
In that multi-service example, Transwestern is crossing over most of the service lines within the company. To facilitate those projects, the company put together a web portal that permits users to track data and communicate effectively with their client.
"The site includes tenant representation, investment sale or acquisition of the site, or a development component that has a significant amount of project management associated with it," says Nash. "We have widely separated locations and a variety of different vendor relationships that need to be a part of that process. We've been able to incorporate all those client requirements into a single Website. There we can provide them with continuity and information so that they can view and understand what is happening to their particular projects all in one location."
This is particularly important since the company has a large board, adds Transwestern president Jack Eimer.
"Individuals on the board can, at any time, access this web portal and can go to the web and call upon the site and have a live video shot of the construction of their headquarters," he says.
These Websites can become like a central filing cabinet where documents can be placed and retrieved by all participants, says Glaze's Miller.
"We recently had a project that had many participants in multiple cities," he explains. "Any document that was created could be deposited into that Website for any participant to read, print, manipulate or whatever they need to do."
They also can use the site as the single source for directory listings, so they can update project directories only once. Instead of mailing, or even e-mailing documents to multiple participant lists, clients can come to the site to get the information they need when they want to access it.
"The information is located there, and we saved a lot of administrative time because we didn't have to send things out over and over," says Miller. "It also served as a communication point for the client by allowing them to communicate to their employees what was going on with the project. It kept a newsletter up to date as well as frequently asked questions. They could write and ask us questions about things they (employees) had anxieties over."
Lawrence Glaze adds that, "With that Website we saved a lot of anxieties by taking a lot of people from a very 1980s workspace with large work stations and large private offices to a 21st century workplace with much smaller, open-planned stations and few private offices."
Show me the data Companies also are using technology and the Internet to leverage information and manage projects in ways that were totally unforeseen a few years ago. Even the ways in which information is obtained and used are going through a dramatic evolution.
Where once companies devoted tremendous resources to pushing information to brokers and potential clients, today Websites are springing up that allow those same clients to "pull" down the information they want, when they want it.
"Everything that I push out as information now is not reaching its market because they've got the ability to pull in only those things that they need," says Dave Gialanella, executive managing director of New York-based Cushman & Wakefield.
The Internet led to countless Websites that now provide information that was once difficult, if not impossible, for the average client to obtain. This data is often provided free, where once it came at great cost if its holder was willing to give it up at all.
"In our industry, if you had the information and you were able to keep it quiet and use it, you had a strategic advantage," says Gialanella. "Look at the Internet and look at the proliferation of information providers to the real estate industry over the past few years, and you find that information is becoming more like a commodity."
Those organizations that once had a hard time finding information today have many readily available resources. Now the mere possession of information is no longer an advantage.
"You must have a better understanding of how you access and utilize the information that you do push to your market place," says Gialanella. "It also demands that you provide a complete set of services that will allow the client to capitalize on the information that they can obtain from more than one source now."
Ready to move in Tenants demand greater flexibility, not only building to building, but also within buildings. These demands for adaptability and greater speed have spawned the ready-to-occupy office space. Chicago-based Equity Office Properties Trust, for example, has entered a joint venture with HQ Global Workplaces Inc., the world's largest full-service turnkey workplace provider, to expand into the increasingly lucrative executive suite market.
HQ is developing full-service business centers in Equity Office's extensive property portfolio - more than 300 buildings comprising nearly 100 million sq. ft. in 23 states and the District of Columbia.
This ready-to-use space comes equipped with a full variety of furniture, as well as computer equipment and even IT support available through the building management.
These offices can be used for as long as the client needs the facility. All administrative support is provided along with the space and equipment.
"Five years ago companies could define their customers by A-, B- and C-building users," says Michael Steele, executive vice president of real estate operations and COO of Equity Office. "The whole world has changed now. The supply and demand dynamics have been turned upside down by the technology boom. The concept of the old economy/new economy business is very, very different in that even traditional space users find that they have very different types of space demands than they had five years ago."
Real estate executives agree that old-line business with traditional space requirements may now have "dot.com" subsidiaries requiring much shorter leases than their parent company. In fact, a company of this sort may be trying to satisfy a six-month lease need for its subsidiary, while putting together a much longer lease for itself.
"So they are really looking for a landlord who can come to them with a broad menu of space, not as brick and mortar, but as a point of service to their business strategy," remarks Steele. "It's a challenge. The business world continues to change at a fast pace, so we are constantly trying to stay in touch with our customers and come up with new and innovative ways to meet their business needs."
We're global, why aren't you? In recent times going global has become a powerful trend in the real estate industry. Full-service firms say that as their clients have moved to an international platform, they have responded by following them to England, France, India or, as one executive noted, even Vietnam.
"Globalization has driven us to strategically expand in a way that is consistent with the way the market we serve is demanding that we expand," asserts Gialanella. "If you took the trend of the last three years, the need to globalize has been the most profound for real estate service providers. I think it also applies to other industries as well. You must globalize with more than just a little affiliation here or a dot on the map there."
He says that his company is seeking to "globalize in a way in which you truly build a global company. You must truly create and deliver service delivery standards, approaches and infrastructure that enable you to be as seamless as possible. You approach the business of serving a client the same in Chicago as you do in India."
In this new era, corporations no longer see any differences in doing business in the U.S. or across the oceans. They expect their real estate service providers to be able to provide the solutions they need when and where they need them - even if the where is Vietnam.
This global sense is not limited to the truly international companies. Those firms whose focus is primarily regional or national are forming alliances with overseas companies that can provide those types of services to their clients when they need them.
Being customer centric The movement of the industry into the technology age coupled with the demands that clients have placed on them has produced companies that are, in the words of one real estate executive, "customer centric."
Companies like Equity Office, for example, hold data gathering conventions that include focus groups with the senior corporate executives of those companies using their space. They also perform annual surveys of the tenants who occupy their buildings. Another important data gathering tool is the company's work with a customer advisory board made up of corporate real estate executives.
"Everything is in a constant state of change," explains Steele. "That's why as you talk to people around the country you hear that flexibility is the key need that is being expressed."
Most agree that flexibility to adapt to the torrents of changing circumstances is perhaps the most vital ingredient in the real estate mix. Those who can not adapt are likely to be left behind, while those who adeptly provide the required services will prosper in the new economy.
There was a time when the only practical approach to marketing buildings was directly to clients in your own hometown.There really was no good way to make information available on a regional, much less national, basis.
Sure, you mailed a ton of full-color brochures to brokers and potential clients, but what good did it do? Did they need it when the postman delivered it? Did it end up in a file for future reference, or worse, was it cast in the circular file from which there was no return?
That was before the Internet took hold, and its technology spawned a new way of doing business. No longer is it necessary to push all your materials and information onto a client who may or may not value it. Today, the operating word is "pull," as in giving brokers and agents a readily available place - a filing cabinet on the web, if you will - where they can retrieve the information they need when they need it.
It is a concept that has taken hold among full-service real estate companies. In fact, it is the operating mantra of at least one virtual real estate firm - Comro.com.
"Rather than pushing all this information to you and hoping you need it now - which you probably don't - we'll put all this high-level, detailed information on this server, and you can come get it when you want it," says Kevin Travers, president and COO of the Chicago-based firm. "We'll keep it current, we won't flood you with it, and you won't tie up your resources when you don't need it. We've reversed this information flow from pushing it out to allow people to pull it out. That's one kind of industry market dynamic that we're improving. It's this flow of information."
Comro.com initially provided information on Chicago real estate on its Bulletin Board System, which eventually gave way to a Website that represents a number of major real estate companies such as Toronto-based TrizecHahn and The RREEF Funds, Chicago. In addition, regional companies such as Los Angeles-based Arden Realty, Chicago-based Great Lakes REIT and SL Green in New York have signed on to market their properties on Comro.com. The company has expanded its listing service to include 54 markets and 500 million sq. ft. of office, industrial and retail space.
"The information comes directly from the property owners, so it's the most accurate," says Travers. "It doesn't have to pass through all these intermediary hands where you run the risk that something gets lost in the translation. It also doesn't get outdated."
A potential tenant or broker coming to the site can look at floor plans, photographs and various levels of maps. The amount of information available is far greater than one normally could obtain from printed flyers and brochures, according to Travers.
"They can, for example, go to Atlanta and even pick out a particular submarket in Atlanta and say, 'find me 7,000 to 10,000 sq. ft. of office space, and I don't want to pay any more than $30 gross,'" he explains. "It'll search the database of the properties that subscribe to our service, and they can view all that relevant, detailed information right at their desk top. You can print what you see right from the site."
In addition to offering property, the site also provides access to a wide variety of other businesses, including brokers, space planners, contractors and furniture suppliers - a total of 1,500 vendors.
While the world of real estate may not have entered the heralded paperless society, the era of mailing brochures and flyers to those who do not want them may indeed be over. In its place is the virtual world of the Internet and the choices and opportunities it offers for tenants to seek the kind of information they need, when they need it.