It’s no secret that any startup that is entering this space is looking to chip away at CoStar’s market share, or create a new model for how space is marketed and found. If I were CoStar, I would be very afraid. Their product is cumbersome and their data is rarely accurate.

The most reliable service CoStar provides is their ability to market available space within the brokerage community. The problem is, however, that everybody uses it and nothing else. This is a huge opportunity for startups.

Think about it. If there was a way to register interest in office space on the internet without having to speak with a broker, who (or what) would be the procuring cause of the interest in space? The listing broker or the website on which the interest was registered? The brokerage companies that partner with the new listing services first will be the ones that benefit from the eventual wave of internet tenant demand from tenants directly and brokers looking on behalf of tenants.

After all, brokers are the experts, but they might not be the best or most efficient source of demand. 

-Matt

I’ve never been a fan of waiting. It makes me feel anxious. I like things to be figured out and taken care of quickly.

 As a commercial real estate broker, I feel like I am always waiting for the latest technology that is supposed to make my job easier. It never seems to happen fast enough.

I’m not alone in this thinking. Recently I attended a talk here in Boston with industry execs and discussed, among other topics, how advancements in technology may eventually disintermediate brokers from the deal process. Or at least begin to erode the fee structure.

Comparisons were drawn to the travel, residential real estate, and financial services industries to support the contention that unless the CRE industry begins to adopt new technology, it will be marginalized by the technology itself. To be clear, when I refer to CRE technology, I mean software solutions that utilize the internet to increase efficiency in a process or transaction within our industry.

Who really cares? A CEO is required to care because he has to., For the broker, though, is technology really that big of a differentiator? I believe that the answer is a resounding yes. I argue that there are two categories of CRE technology that will eventually shake up the industry. More specifically, it will dramatically change how brokers get paid and add value.

-Matt

I have been working with my co-founder John Kelleher on a project called Leasability for the better part of the past year.

As a full time commercial real estate broker who has always been interested in tech, I encountered a problem in the office space leasing process that I felt could be solved with technology. I found myself spending way too much time managing several different listings with different client reporting tools and formats. I thought that I could save time by centralizing client reporting into a real time, mobile-enabled application built specifically for the space leasing process.

Through using Leasability, brokers can keep their clients and teammates up to date on deal pipeline and market activity in real time from anywhere, rather than the industry norm of weekly conference calls reviewing boring spreadsheets. Everyone wins! Thus, I dove into the Boston start-up scene and began building Leasability.

This post is not all about my journey building a startup, but my observations about the Boston startup community. In no particular order, here is what I have observed.

People genuinely want to help you. The pressure that comes along with climbing a corporate ladder sometimes creates headwinds when dealing with others. I noticed in the start-up world, that even when people may be providing resistance, they are usually doing it to challenge your thought process on your start up, which is actually a good thing. This goes for investors, entrepreneurs, attorneys and others. The bottom line is that people want to see you succeed, and you need that because it is not easy to do so.

Good developers are really hard to find. The start-up scene in Boston is so strong right now, that even developers that are not fully employed by a start-up or big tech firm are contracting on their own, and making good money. So to convince a top notch developer to join your team pre-revenue and before they are customers, you have to be able to tell a really good story.

-Matt

This post also appears on Matt’s personal blog http://mattgiffune.wordpress.com/.

To the tenant, a landlord is the guy that comes around and asks if everything is OK, sends you tickets to the game, and offers you space when you may not need it.

To the tenant rep broker the landlord is the guy that says “Bring your tenant to my building, we love paying brokers.” Or “We treat our tenants well, they will be in good hands.”  What landlords don’t necessarily broadcast is that they will do anything in their power to keep rents competitive and deal costs low. That is their business and that is completely fair.

From the tenant rep perspective,however, this presents a serious challenge – explaining to a tenant why they need a broker. That is a topic for another Boston Blog post, but the basic argument from the tenant rep is that if a landlord offers a tenant a “market deal,” there should be a commission imputed into the rent. And because “market deals” typically involve brokers, landlords expect to pay a commission on every deal. That is how they underwrite their investments. So when a landlord does not pay a commission and the tenant gets a “market deal,” the commission is left on the table for the landlord, and the landlord wins.

It isn’t stripped out of the rent or disclosed that it exists. Therefore tenants may actually end up paying a premium when dealing directly with their landlord.

-Matt

This post also appears on Matt’s personal blog http://mattgiffune.wordpress.com/.

Tenant representation is perhaps the most competitive arena within the commercial real estate brokerage industry. Real estate companies large and small are all chasing the same group of space occupiers through cold calling, relationship building, networking, entertaining, etc. There is only so much business to go around.

To tenants, brokers tend to all look and sound the same. Even exclusively tenant rep firms must compete with the traditional brokerages that represent landlords. No matter what you call yourself as a broker, you have competition coming from every angle. Tenants are very demanding of their service providers to deliver more solutions for lower cost. It’s a battle out there.

There is a hidden layer of competition for tenant rep brokers – landlords. Yes, landlords compete for tenant rep business. Not in the sense that they actually represent tenants, but they absorb commissions that are otherwise to be earned by brokers who advise tenants on renewals and sometimes new deals.

I’m not suggesting that this is at all wrong or unethical. I represent landlords as well as tenants. It is simply the nature of the business. If a landlord can negotiate a favorable deal without having to pay a broker, it’s in their best interest to do so. As a tenant rep broker, however, you should be aware that the sales path may actually take you through the landlord.

-Matt

This also appears on Matt’s personal blog: http://mattgiffune.wordpress.com/. 

Here are three reasons why commercial real estate brokers won’t embrace social media.

CRE sales channels are old school. Their fall back is cold calling, canvassing, leasing signs, mailers, email blasts, “networking,” hunting, and playing golf. Don’t get me wrong, these are all good things and arguably necessary. It’s just that they are all becoming less important.

The internet, especially search engines, are where things are found these days. I was speaking with an entrepreneur recently who just leased 6,000 s.f. in Boston off of Craigslist. The broker that put his listing there won because he benefited from inbound marketing. There are over two billion people on the internet. Lots of them are on Twitter, Facebook, Linkedin, and blogs. So add social media to the mix and dominate.

Reason two: leasing commissions. Yes, I realize that’s how I make a living, but sometimes you can trip over a deal and make enough to buy a house. Or, you can work really, really hard and get no result. It’s difficult to measure a real estate broker’s ROI in terms of time spent working. The mentality for some brokers becomes hang around the net, work hard, add some luck and you will be rewarded.

Social media is too bleeding edge for this way of thinking. It involves being yourself, testing the limits of what’s acceptable in business, and perhaps showing vulnerability.

Reason three is: you don’t know what you don’t know. Remember that time you first got behind the wheel of a car? You knew that what you were doing was something that you were going to have to learn, but it was really uncomfortable. That’s how embracing social media feels at first. Until you take a few spins around the neighborhood, you will never know how cool it feels to cruise and pick up some friends for the ride. Every instance of growth in life requires getting outside your comfort zone.

Let me know what you think of this post. Also let me know if you need help getting off the ground with social media for CRE.

This post also appears on Matt’s personal blog http://mattgiffune.wordpress.com/.

I recently returned from Scottsdale, Arizona where I spoke to hundreds of my colleagues about using social media for sales.

The reoccuring theme of our conference was the use of technology to accelerate sales efforts and contribute to the success of clients. I was excited about this, as our industry needs to start embracing new media and tech like other industries have. However, I’m not convinced that people really understand the most obvious sales tool for our business – social media marketing.

Candidly, I think that most commercial real estate brokers hide behind the industry to avoid social media. They say things like “Isn’t twitter for kids and celebrities,” “Doesn’t it take a lot of time,” or “Can you honestly tell me one meeting you got from tweeting?” These are all short for “I’m really afraid of change.”

That may be a little harsh, but its true for a large portion of the CRE population. I do believe, however, that there are CRE people out there that see the value of social media tools, and understand that the ROI isn’t always calculated by leases and commissions but by awareness, social proof and thought leadership.

You can’t have a great brand, corporate or personal, without these things. Brokers have a lot to learn about effective use of social media tools for sales. We’re just scratching the surface.

I used the presentation to give brokers the why and how: why social media is relevant, and how I use it. I have my own guidelines, rules and tools, and do what feels right to me. So don’t feel like I am giving you a lecture. Instead use my presentation as a reference point for your own social media strategy.

-Matt

This post also appears on Matt’s personal blog http://mattgiffune.wordpress.com/.

Co-working is awesome. It’s the most natural working environment that exists.

If you think about it, we as Americans begin co-working as soon as we are put into a classroom environment – usually at preschool or kindergarten. We report to a classroom, sit at a desk, participate in experiments, projects, and games with our peers. We compete, collaborate, and discover new things via our interactions with others. It seems so obvious that we would do this as adults.

The only population in the business world that seems to embrace this concept of work, however, is the startup. Why is this? Perhaps it’s because entrepreneurs feed off each other. Maybe it’s because they dislike the traditional notion of the office,. Or it could be because they rely heavily on the advice of others. Whatever it is, I think they have it right. 

More businesses should invest in co-working as a growth strategy. In the commercial real estate world, it is easy to fall into the pattern of reporting to the office, checking in with a few teammates, then heading to your cubicle to knock a few things off the to-do list or make cold calls. 

True growth in business is the result of new ideas, going against the grain, and stepping into the unknown. How are you going to do this if you are a consultant and hang out with other consultants all day? Or if you are a copier salesman and you follow the same trail through your territory every day. Don’t you want to ask yourself what else you can be doing, or ask others what they do differently than you? This happens all the time in co-working space. That’s why it fosters innovation.

If I ran a professional service business like a real estate firm, a financial advisory firm or law practice, I would clear out my extra office space, fill it with desks, and invite other businesses to use it as co-working space. With no strings attached and no expectations. There would be a huge payoff. Relationships would grow, ideas would be exchanged, and business would happen. It doesn’t have to be just for startups.

Do you know of any big companies using their space for coworking? Do you co-work at another company’s office?

-Matt

This post also appears on Matt’s personal blog http://mattgiffune.wordpress.com/.

It is widely believed that real estate is a “relationship business.” While I’m a believer that relationships are the cornerstone of success in any business endeavor, it is shortsighted to subscribe to the notion that if you simply “cultivate” relationships that you will reach a level of success that is the admiration of your peers.

Sure, commercial real estate decision makers aren’t constantly thinking about their next move. It takes some wooing to get their attention. In order to truly identify where a relationship can start, one must qualify leads like any other salesperson.

My esteemed colleague Brooks Murphy bestowed onto me the idea of the six boxes of love. The concept is simple:  is there an opportunity right now to help a company with it’s real estate decision? This should be the first thing any broker asks herself when qualifying a prospective client. Too often I find myself looking for reasons to keep a prospect in my hit list, only to have wasted valuable time in justifying my pursuit.

The six boxes of love are loosely as follows:

1) Is the potential commission large enough to justify your time spent pursuing and executing the deal?

2) Does the company need to make a real estate decision within the next 18 months?

3) Do you have the resources and market knowledge to provide top notch service?

4) Are they going to hire a broker?

5) If they hire a broker will it be on an exclusive basis?

6) Will you be protected by the landlord or your client if they decide to renew their lease?

If the answer is no for any of the boxes of love, take it off the list. Rinse, repeat.

-Matt