Depressed deal volumes, rising interest rates and economic uncertainty have slashed revenues for many commercial real estate brokerage firms. This year, the top publicly traded firms have announced large-scale layoffs and profit loss, but some firms are persevering through the market turbulence. Matthews Real Estate Investment Services is one example.
The firm had its best year in 2022, and this year, it is on track to replicate last year's numbers, says Kyle Matthews, executive chairman and CEO of Matthews Real Estate Investment Services. With the right strategy focused on fundamentals, Matthews believes 2023 could be career-defining. And by investing in talent, Matthews is bullish the firm will outperform competitors despite a challenging market. The firm recently welcomed its largest summer class to date with the onboarding of over 400 new hires and interns.
Building Strong Brokerage Fundamentals
Brokers play an essential role in guiding a deal to fruition and advising investors, but many brokers have relied on a bull market for far too long. When the market is behind you, poorly priced or poorly structured deals can still make it through the gate. In this market, brokers don't have that benefit.
Instead, successful brokers must understand the business and have what Matthews calls strong brokerage fundamentals. "It's like sailing into a headwind," he says. "You have got to be a little more creative. You've got to kind of zig and zag, but you can still move forward. In a sailboat, you can sail directly into the wind. You just have to know how."
Brokers with strong fundamentals are working long hours, making cold calls, preparing for meetings, going to conferences and really doing the leg work to understand the state of real estate and how it is evolving. "We're willing to do the things that no one else wants to do," says Matthews about why the firm's brokers have been so successful this year. "It's not that our agents are unaffected or impervious to the market conditions there. They just battle through."
Investing in Quality Talent
Although some firms are downsizing in response to a shrinking deal flow, Matthews made a commitment during the pandemic to eschew a layoff strategy. The firm has held true to that promise through the last 12 months, as headwinds have intensified—and this year, the firm is actively expanding. "We are protecting our teammates. Our entire platform is not only intact, but we're actually hiring," says Matthews.
According to Matthews, investing in talent and recruiting is essential to the firm's success. "It's markets like these that allow you to widen the gap with competitors behind you, and close the gap if not pass those in front of you," says Matthews. "A lot of how that outcome plays out is determined not just at the top, whether it's a CEO or the C-suite, but all of the way down to the individual professional; in my case, an agent."
Investing in talent is driving Matthew Real Estate Investment Services' resiliency in 2023 and beyond. "The men and women in our offices around the country are executing the fundamentals of the business. They don't have blind optimism, but real optimism."
To read more insights and thought leadership from Matthews Real Estate Investment Services, click here.
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Kelsi Maree Borland
