Why a Proptech Company is Betting Big on CRE Brokers in 2019
Updated: Jan 30, 2019
I first received my real estate license at age 18 – the earliest legal age possible in Michigan, where I grew up. I was obsessed with becoming a commercial real estate broker – and all it took was a 40-hour class and a test in a sterile government room.
Or so I thought.
Becoming a CRE broker is easy; staying one is the hard part. I love CRE brokers. For 15 years, I was one. I still am one (in form, not function). That’s why I know that brokers add value to RefineRE's customers. Let's cut through the noise around “disruption” and “disintermediation,” “PropTech, Big Data, AI and ML. Let's take a step back and admit it - PropTech doesn't work without people - and not just any people; we need the experts.
Brokers are OG Entrepreneurs
I started off like most brokers – with a phone, a list and a draw. Smiling and dialing. Cold calling. Dialing for dollars.
Whatever you want to call it, it's damn hard, and it takes a lot of creativity. Good CRE brokers have done it and keep doing it throughout their careers – reinventing, listening and talking. That is textbook entrepreneur behavior, it is results-focused: Whatever it takes to give their customer value opens checkbooks.
Brokers focus on client value because their lives depend on it. It’s a mindset that plays itself out as a process. In short, you can bet on most brokers to do what it takes to make their clients happy. That makes brokers our kind of people. We're not here to peddle a solution; RefineRE exists to deliver the solution that our clients want.
Brokers Have Soft Skills
We can all agree that technology is great for simple transactions: Ordering an Uber or paying for lunch – even buying whatever it is that you buy on Amazon.
But let's face it, commercial real estate transactions are still complex deals. Technology often ends up slowing down the process, not speeding it up. Big Data exists to serve humans, not the other way around.
In a recent RefineRE study, we found that most CRE transactions still require:
· More than 30 different people
· At least 10 phases
· 200+ principal hours - and in calendar time, they take longer to complete than it does to build a Boeing 787
As every broker knows, your most valuable resource is time, and it requires real expertise to pull all of the levers it takes to get it done – not to mention the managing of expectations around timelines and cost.
I don't think that PropTech is about replacing humans or "productizing" information. It's about creating a better back office for humans and allowing them to "hack" the old process. Brokers armed with knowledge, expertise, and technologies that can make their clients lives simpler and easier are going to ride this next wave to even more success.
In the business world, we call these soft skills – the ability to interpret needs and make decisions, and to work with others to uncover the why behind the how.
Brokers Are Ready for Change
If you ask any broker if their job will exist in 10, 15 or 20 years, you'll likely get the same response. "Probably, but it's going to look very different."
They're right. But what if you could be ahead of the curve?
Doug, vice president of operations at RefineRE, was a real estate director for a $30 billion company before he joined us. He is a strong advocate for the value that brokers bring to those in his former role. "Brokers aren't going away," he always says "but we need more experts that can execute on the right things."
What has changed is how, when, and how quickly the entire CRE and overall business ecosystem needs access to relevant information. Every other facet of a business has sped up – real estate processes look positively ancient by comparison.
Our broker partners see this change and are already adapting. The PropTech boom is largely driven by brokers and brokerages who are already ahead of their competition and are looking to stay that way with value-driven customer service and simplified knowledge share.
The RefineRE team spent almost four months in Toronto participating in in the Colliers PropTech Accelerator powered by Techstars. During that time, we sat down, one-on-one, with over 50 of Colliers' global leaders from different service lines. Not one promoted “business as usual.” Instead, we heard where their ecosystem is headed and how they can be a part of the solutions. They want to become more relevant than ever before by anticipating customer needs like never before. This is truly an industry-shaking change.
The most important PropTech breakthrough is the harmonious communication between brokers, real estate stakeholde4rs, and PropTech. It's what happens at the intersection of the knowledge economy and the wisdom economy that is bringing about the biggest change in our far-reaching industry, but it's the human element that will get it over the hump.
Brokers are experts. We are technologists with CRE expertise. That, my friends, is where the magic happens, and that is why RefineRE is working hard to make sure our solutions work with our broker partners to increase their value – not replace it.
If you’re a broker that wants to add more value to your client relationships, we’re here and we’d love to meet you. You can learn more and schedule a demo at www.refinere.co