Part 2 of 2
LOS ANGELES—“We have become a bifurcated industry. In the brokerage business, you are either corporate or boutique and local.” That is according to sources from our recent two-part look into the brokerage business, both boutique and corporate. According to Charles B. King, Jr., a past president o f CORFAC International, who is principal of King Industrial Realty/CORFAC International in Atlanta, GA, when he first started as a broker in Atlanta in 1967, all of the real estate companies were local.
Now, if you are a broker with one of the national/international firms, he says, “the client is the client of the brokerage house. If you are a broker with an independent firm, the client is your client for life—unless you die, screw up, or the client's company is sold.”
The DTZ Cushman merger, he explains, “doesn't mean that much to me or our business; it makes their platform stronger to compete with CBRE and JLL. But it doesn't change our business at the local level much. A big multinational isn't going to hire me anymore than a local small business owner is going to hire them--it's a mismatch.”
King goes on to emphasize the strength of the individual broker, noting that “The individual broker relies on his or her service to the client to maintain and sustain that relationship and get future work and referrals—there is very little corporate assistance to that process.”
He tells GlobeSt.com that “Our industry is becoming a handful of really big companies at the Fortune 1000 level and a bunch of smaller ones at the regional level—with very little in between.”
Past president of CORFAC International, David Prior, who is a principal of the Klabin Co./CORFAC International in Los Angeles, views the consolidation as “an opportunity for people to take a second look at the smaller boutique firms and understand the advantages and differences.” Unlike the big firms with multiple service lines, he says, “boutique firms like ours have the ability to change directions quickly as market conditions dictate.”
For example, in 2009 and 2010 when the leasing markets were devastated, he says that his firm focused on buying and development opportunities for our clients in anticipation of an eventual recovery. “We're not trying to be all things to all people—just the best in class in our markets. We know there is going to be change for many good brokers out there and we're ready to accommodate the right people.”
Just look at the landscape today versus a couple of years ago, or further back, he notes.
“Ten years ago we had Trammel Crow, Insignia and CBRE—and now they are one. Two years ago we had Cassidy Turley, DTZ and Cushman—and now they are about to be one,” Prior says. “This means there are fewer companies to compete with—for listing assignments, tenant rep work and for recruiting the quality brokers themselves. Plus all of these institutional firms are focused on trying to be the same and offering a vast array of services.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
