Five Ways Brokers Can Grow Into A Future With More Technology
Ira Zlotowitz is president of Eastern Union, a New York-based commercial mortgage brokerage that closes $5 billion in transactions yearly.
You may be good. But are you indispensable? As various forms of technology, data collection and social media penetrate more deeply into our profession, there’s a degree of misapprehension about long-term job security. Many of today’s commercial real estate brokers in the investment sales, leasing and mortgage spheres are concerned about their future.
Some may even be convinced that they won’t be dislodged from their jobs by the effects of technology. As I see it, they believe they can’t be replaced by a machine – and therefore, their jobs are secure.
Brokers who say they are experts in their field and that they bring an essential human element to the job are, in essence, right. There will never be a fully automated commercial real estate deal. Every transaction will require the involvement of a human broker, no matter how advanced various forms of technology may get. Each broker using tech will likely be able to close more, which means the overall population of brokers could be reduced.
Taking this observation further, an informal survey sheds some light on the way brokers view the effect of technology on their jobs. Recently, I asked individuals in my LinkedIn network, “Over the next few years, do you think investment sales, leasing and mortgage brokers will be replaced because of technology?” The 673 replies were a combination of yes, no and hybrid – technology combining with human brokers. More than a third, 36% responded no, brokers will not be replaced because of technology, with a total of 63% answering yes or hybrid.
But brokers won’t be replaced by technology the way, say, elevator operators were replaced by automatic, push-button elevators – or the way steam drills replaced the legendary John Henry and other musclebound steel-drivin’ men.
People won’t face such an either/or scenario in our industry. In our sector, brokers who embrace and learn technological skills will likely find more sources and close deals at a faster pace than their less tech-savvy counterparts. Because their new skills have made these brokers more productive, there may be a decrease in the total number of people a brokerage will require to get the same volume of work accomplished. This could mean a brokerage closing 300 deals a year with 10 brokers could close the same number of deals with fewer brokers.
Generally speaking, while the dollar value of deals may fluctuate significantly, the pure number of transactions in America tends to creep slightly higher year over year. The generally steady pace of transactions each year can also contribute to a shrinking brokerage community as technology allows fewer brokers to complete more transactions – while increasing earnings for these remaining brokers.
The overall efficiency doesn’t stop with brokers, either. As technological efficiencies are manifesting in the broker’s world, they’re also appearing on the client side. Lenders, buyers and sellers are also adopting cool, new tools. The added synergies will further elevate the industry’s overall level of efficiency.
The infusion of technology – including data collection and social media – will continue to grow. As noted in Avison Young’s 2020 Global Forecast, the current use of technology and automation to process and manage more information is in its infancy. Avison Young also sees automated processes becoming less expensive as they grow more efficient – and embedded – in cutting-edge organizations. For real estate specifically, one expert calls out technology as a current and future differentiator of top-performing CRE companies.
So, whose careers will survive the arrival of powerful, new tech efficiencies in CRE? Which brokers will still have a job? It’ll be the ones who can combine their human expertise with a comfortable mastery of new technologies. I’ve found five ways to move toward that comfortable mastery and integrate more technology into day-to-day operations.
1. Work Within The System. Brokers should learn and fully utilize any data sources or systems that their team or company is presently using. They shouldn’t manage these critical aspects of their work in their own personal way.
2. Find Data Sources. A successful broker should master the usage of the marketplace’s leading sources of commercial real estate data, such as Actovia, Reonomy, CoStar and others.
3. Manage Your Own Data. Brokers and their teams should collectively manage information about all of their contacts and clients using a custom-made or off-the-shelf customer relationship management (CRM) tool.
4. Focus On Internal Communications. Brokers, together with their teams and companies, should use a high-functioning internal communications service or platform, such as Slack or Microsoft Teams.
5. Organize Your Workflow. Stay organized and work efficiently by setting up project management tools for yourself and your teams. Some examples are ClickUp and Monday.com.
Looking at the continuing growth of technology and the informal survey of brokers’ relationship with innovation, it’s clear that those who adapt their skill sets will continue to find success in real estate. Brokers won’t be replaced by technology like those in other industries. They will find a mix where their participation pairs with technology to achieve more efficiency – and potentially more income – as more work can be done by fewer brokers.
Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?