BROKERAGE BUSINESS IN TRANSITION
Real Estate Strategies, Benchmarking & Performance Solutions
CEL & Associates, Inc. 12121 Wilshire Blvd., Suite 204 Los Angeles, CA 90025
tel.:310.571.3113 fax:310.571.3117 email:cel@celassociates.com
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he current brokerage business model
must change if it is to meet and exceed
the expectations of
investors and
tenants. This is the primary conclusion of a
recent CEL & Associates, Inc. analysis of
over
100,000
nationwide
surveys
completed by
the primary users of
brokerage services. Increasing levels of
sophistication among users of brokerage
services, corporate consolidation, and a
shift in the perception regarding the role
that workplace environments have
in
productivity are changing how companies
view the use and role of a Broker. According
to the CEL & Associates, Inc. study, the
traditional brokerage business model will
need to dramatically change in order to
prevent a significant loss of revenue in the
future. Today, the brokerage industry is at a
crossroads. The decision of which way to go
will have a major impact on future success
and profitability for years to come.
Today, the traditional brokerage company is
structured around a geo-centric business
model. While some firms have expanded
regionally and/or nationally
(either by
opening new offices or by affiliation), their
business models have generally revolved
around a few key performers, business-
generating personalities and select client
relationships. Today, only a small number of
firms have progressed from a geo-centric to
client-centric business model and no firm
has shifted
from a client-centric
to
knowledge-centric business model — the
direction
most
industry
leaders
acknowledge
is
the
future operating
platform for brokerage. The self-imposed
revenue caps created by the geo-centric and
personality-centric
business
models
contribute to the significant leadership
challenges facing the brokerage industry.
Overall, industry revenues we