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SVN® Expands Presence In Texas with the Addition of SVN | J. Beard Real Estate – Greater Houston

Boston, MA — (October 14, 2021) — SVN International Corp. (SVNIC), a full-service commercial real estate franchisor of the SVN® brand, announces the addition of its newest franchise office, SVN | J. Beard Real Estate – Greater Houston. Led by Managing Director Jeff Beard, CCIM, the firm’s services encompass leasing, brokerage, site acquisition, property management, development, consulting, and landlord/tenant representation services.

Headquartered in The Woodlands, Texas, located north of Houston, The J. Beard Real Estate Company was established in 2003 and is now one of the top commercial real estate brokerage firms and an industry leader in the Greater Houston area.

“On the heels of our 18th anniversary, the timing for this strategic alignment couldn’t be more ideal,” says Beard. “Our team is stronger than ever. We have grown over the years despite challenges like the ’08 financial crisis, dramatic swings from the local economy’s energy sector, natural disasters, and most recently the global pandemic. Each and every time, our team pulled together and has emerged bigger and better.”

Beard continued, “It is important to note that the ownership and the client-centered culture of our firm haven’t changed. We will continue to have the same boutique focus on quality relationships with the same core values that our team embraces. This exciting alignment with SVN International will enhance our access to CRE resources, create new business growth options, and professional growth for our associates, all of which will help provide more ways to better serve our clients. We have the same ownership, the same market expertise delivered by the same entrepreneurial, boutique company, but now with a bigger, broader national and international reach.”

Kevin Maggiacomo, President & CEO of SVN, added, “As the SVN® brand expands across the globe, we are partnering with market leaders who share our vision of a collaborative, open, and transparent approach to commercial real estate. SVN | J. Beard Real Estate has long been an impactful leader in Greater Houston and is yet another strong addition to the organization. We look forward to rapidly growing the SVN presence and culture in Houston, TX.”

For more information, please visit www.jbeardcompany.com.

About SVN®:

The SVN® organization is a globally recognized commercial real estate entity united by a shared vision of creating value with clients, colleagues, and our communities. The SVN® brand is comprised of over 1,620 Advisors and staff in more than 200 offices across the globe in six countries. Our brand pillars represent the transparency, innovation, and inclusivity that enables all our Advisors to collaborate with the entire real estate industry on behalf of our clients. SVN’s unique Shared Value Network® is just one of the many ways that SVN Advisors create amazing value with our clients, colleagues, and communities.  For more information, visit www.svn.com. All SVN offices are independently owned and operated. To learn more about becoming an SVN commercial real estate business owner, visit http://www.svn.com/franchise/.

Your Competitive Edge: Reframing the Impact of Technology on CRE

Change Is On the Horizon for Commercial Real Estate

The digital revolution of the last decade has left no industry untouched. Companies across all sectors are leveraging advanced technologies — artificial intelligence (AI), mobile platforms, data analytics — to engineer innovative products, services, and customer experiences. The rapid and continual advancement of technology has ensured that it plays an integral role in our lives. 

We are entering an era of “data ubiquity,” one in which a new generation of nimble, data-centric apps exploit massive data sets generated by both enterprises and consumers.1 In 2021, data is central to our existence — whether you’re a giant enterprise or an individual person.

These significant large-scale advancements have entirely reshaped consumer behavior. The proliferation of data sources, and the explosion of user data they generate, has created an environment in which consumers are more educated and savvy than ever before. As the table stakes rise across markets everywhere, consumer demands change, and service providers have to adapt in order to meet their expectations.

Adapting to ubiquitous digital connectivity is now essential to competitiveness in most sectors of our economy.2 Both established and start-up players in every industry are being forced to compete in new ways.

We hear it all the time: while the commercial real estate (CRE) industry has been slower than other industries to adapt to change, conditions are ripe for disruption. We’ve already seen the far-reaching impact of technology on residential real estate. Before the rise of IDX websites, home buyers relied on real estate agents to identify available properties. Today, 89% of people begin their search online.3 Database sites like Zillow and Trulia have enabled buyers and sellers to access market data instantly, with the click of a button.

The evolution of residential agents foreshadows the changes to come in CRE. Already, tenants and buyers are able to access commercial listings and data through free websites such as Crexi, and property owners can utilize these same websites to list properties without the help of a broker.

Although innovation has already begun to alter the role brokers play in CRE transactions, the ripples of change should not be feared. In fact, industry leaders are now face-to-face with immense opportunity: brokerages that choose to lean in and embrace technological advancement are sure to gain a sharp competitive edge through more efficient operating and delivering higher levels of client service.

Using Technology & Automation to Create Efficiencies

“Time is money,” they say, an old adage that certainly rings true for CRE.

Utilizing tech and automation streamlines operations and increasingly enables brokers and brokerage firms to eliminate the manual administrative tasks that typically slow processes down. Leveraging technology to work smarter, faster, and leaner allows brokers to focus their time on building strong client relationships, winning more listings, and maximizing their success. 

In order to understand how CRE tech can and will pull us into the future of the industry, let’s discuss some of the common inefficiencies found within brokerage models today.

On the marketing side, creating and maintaining multiple pieces of marketing collateral, listings, and websites fosters data duplication and increases the odds of human error. When listing data changes, each piece of collateral must be individually updated and possibly reformatted.

Ensuring cohesive branding across all collateral and platforms is another vital yet time-consuming task for brokers. Simply put, a consistent brand is a recognizable brand. Greater brand recognition boosts credibility, creates a sense of reliability, and improves client loyalty. Creating, implementing, and maintaining templates for property flyers, offering memorandums, and personalized proposals for potential clients often requires a dedicated staff member with specialized training. For brokers who produce their own materials, these administrative tasks cut down on the time they have available to spend building the essential one-on-one relationships that close deals.

Long recognized as an early tech adopter, SVN has positioned the brand to be on the bleeding edge of CRE technology for over 30 years. SVN co-developed the industry’s first online publishing platform, Buildout. Available to all SVN offices, Buildout’s best-in-class software technology provides database management, pipeline reporting, back-office tools and more, enhancing your entire deal cycle in a single platform.

Buildout eliminates redundant administrative processes and increases productivity by automating and updating listing data across all marketing channels with one single click. SVN Advisors are able to utilize professionally designed templates to generate a wide range of marketing pieces and proposals so they can secure a listing more quickly and sell faster. In short, efficient and cohesive marketing technology effectively streamlines backend work and, in turn, generates more listings.

Buildout also streamlines back-office operations. Advisors can efficiently generate commission vouchers and track payable/receivable invoices and deposits. The platform also features a deal pipeline management dashboard with the ability to share listing activity reports with clients directly.

Much of the technology being used in CRE today streamlines the tedious back-and-forth of buying and selling of commercial real estate. Models like SVN, which leverage tech and automation to streamline operations, are able to provide greater value for their clients than competing firms operating under traditional methods.

Tapping Into Tech for Advisor Insights

Commercial real estate data is an enormously powerful resource. Ownership, transaction details, and the financials surrounding a property listing offer an endless number of insights that brokers can leverage to advise clients and win listings. However, curating data into meaningful reports manually is a time-consuming endeavor.

Real Capital Analytics (RCA) is the leading supplier and authority on data that drives commercial real estate. All SVN Advisors have access to the entire U.S. Portal (including Canada) to use RCA’s unique knowledge and perspective coupled with timely transaction data. This includes access to their 100,000+ detailed investor bios and their valuable intelligence on marketing and pricing, capital flows, and investment trends. Additionally, RCA regularly provides informative newsletters and bulletins which can be used to support marketing efforts.

Collaborative data exchange services, such as CompStak, are quickly gaining popularity in CRE. Compstak is a free broker-focused platform that compiles lease comparables and allows users to filter by submarket, base and effective rent, asset class, transaction size, and more. Brokers are able to exchange comps for credits and redeem those credits for other comps when needed.

Ultimately, brokers who tap into the sophisticated data tools available in the market today will continue to differentiate themselves from the competition and bring greater value to their clients.

Staying Ahead of the Curve

Executives in every industry are keeping a close eye on emerging technologies and the correlation to their business, from impact to leverage. For CRE, evolving tech and automation trigger fundamental shifts in client demands, expectations, and behaviors. SVN is positioned on the forefront of these industry changes, continually adapting to remain ahead of the curve in order to provide value for our clients and communities.

Clients today expect a fast, seamless experience from start to finish — powerful search capabilities, a transparent brokerage process, on-demand flexibility at every stage. SVN utilizes emerging tech and automation in its platforms to provide clients with analyses of current market conditions, investments, future opportunities, and new projects. SVN uses new tools and technologies to analyze information from multiple data sources, inclusive of the valuable data clients already have, and then provide actionable insight to clients that goes way beyond the transaction.

The effects of tech and automation in the industry won’t negate the need for experienced and knowledgeable CRE professionals. Rather, brokerage models like SVN understand that technology could be a key enabler for talent transformation, allowing companies to streamline existing talent systems and processes, drive efficiencies, and make more informed and effective decisions.4

Models like SVN, which embrace automation, collaboration and cooperation, are uniquely positioned to take market share in this era of change, as client behaviors and expectations evolve.

For CRE professionals, leaning into the adoption of new technologies will enhance the selling and buying experience for clients now and in the future. Companies that move to embrace these changes in technology will find that both they and their clients benefit from it. Those who choose to embrace collaboration and harness innovative technologies are the ones who will bring the future forward, make real change, and help to redefine the CRE industry.

Endnotes

  1. https://www.informationweek.com/big-data/big-data-analytics/the-age-of-data-ubiquity-sensors-spread/d/d-id/1109327?
  2. https://hbr.org/2014/11/digital-ubiquity-how-connections-sensors-and-data-are-revolutionizing-business#:~:text=Adapting%20to%20ubiquitous%20digital%20connectivity,most%20sectors%20of%20our%20economy.&text=We%20have%20seen%20that%20digital,replacement%20but%20connectivity%20and%20recombination
  3. https://ipropertymanagement.com/research/zillow-statistics
  4. https://www2.deloitte.com/us/en/insights/industry/financial-services/future-of-commercial-real-estate-talent.html

Looking to the Future: The Disruption of COVID-19 and the Transition into the Next-Normal

Exactly one year ago, eight governors across the US took the initial move to close bars and restaurants, and the Dow Jones posted its largest one-day drop ever, finishing down a record 2,997 points. The world as we knew it was hitting the proverbial fan. New incoming information —none of which was encouraging — came across our screens at a frantic pace, causing our stomachs and portfolios to drop in tandem. 

With a full year now passed by in the COVID economy, the universe of uncertainty has thankfully compressed. While it was not an advanced degree that any of us had applied for, the pandemic has imparted a lifetime of lessons, offering clear clues about the future of commercial space demand and the ways we as humans interact with the built environment.   

Macroeconomy

Starting first with the economy as a whole, I know we have all become a bit numb to sideways numbers during the past year, but to dig ourselves out of this hole, it is important to understand just how deep we are. Early last year, while we were all still finishing our champagne and settling in after the holiday season, the Congressional Budget Office released its estimates of 2020 economic growth, serving as a reliable benchmark of where the economy would have stood without the pandemic. Actual output last year fell short of the CBO’s early 2020 forecast by $1.2 Trillion Dollars, good for an average loss of $3,560.06 for every American.

More workers filed for initial unemployment claims in the first nine weeks of this crisis than during the entirety of the 2007-2009 recession, and the unemployment rate hit a stratospheric high of 14.8% last April. Through the most recent Jobs report, it looks like we are once again starting to see some positive momentum toward an eventual recovery. The civilian unemployment rate ticked down 6.2% through February as the economy added back 379,000 jobs. We remain a long way to go, but between vaccination rollout and the onset of warmer weather, the W-shaped recession we have seen so far should have enough fuel in the tank to prevent another near-term downturn.   

Multifamily

An often-peddled refrain during the early days of the pandemic was that the multifamily, and apartment sector as a whole, would maintain its stability by the simple fact that people will always need somewhere to live. If anything, the same optimists argued that the resiliency of cashflows could actually improve as renters were spending more time in their homes due to involuntary quarantines. With a year of data available now supplanting conjecture, we find that residential rentals have indeed performed up to expectations. No, conditions have not been ideal, and distress is not too hard to find, especially in gateway markets. However, compared to worst-case scenarios, the apartment sector has lived up to its reliable bedrock status. According to the National Multifamily Housing Council’s rent tracker, which follows the performance of more than 11 million professionally managed apartments, 93.5% of renter households paid rent in February— only a 1.6% drop off from the same month last year. These data may, however, likely understate some sector-level underperformance, as they do not include vacant units or self-managed “mom-and-pop” properties. According to Freddie Mac’s latest forbearance report, we know that small balance originations, which tend to cater to the “mom-and-pop” investor class, make up 75% of loans in forbearance.1 

The CDC’s eviction moratorium remains a pressing challenge for the industry and an impediment to its return to pre-pandemic health. The market for rental housing is a circular flowing ecosystem between lenders, investors, and renters. There is no net-positive corrective policy that achieves more benefit than harm by breaking the symbiotic process, much as the moratoriums have.  The NMHC offers that moratoriums “fail in their purpose of addressing renters’ underlying financial distress” and “jeopardize the stability of housing providers and the broader housing market.” Despite two different federal judges ruling against the CDC policy in the past month, the ban remains in place. There are, however, green shoots forming, which could signal a return to more normal conditions in the near future. At the end of this month, the moratorium is scheduled to expire— a deadline that we should accept with a coarse-grained piece of salt. Nevertheless, the appropriations bill passed at the end of the year, and the American Rescue Plan of 2021 passed last week collectively set aside $46.6B for rental assistance programs. A CPPB analysis of Census Bureau survey data finds that roughly one-in-five renter households are behind on rent— a crisis that should see meaningful relief as funds are released.2

The permanence of COVID-induced migration will be a hot-button topic as more jabs land in arms. Taken together, the trifecta of New York, California, and Illinois, the states that are home to the three largest US cities, collectively lost more than 275,000 residents in 2020. The human density that has historically attracted demand toward superstar cities has had the complete opposite effect in the past year. Without accessible cultural amenities or the need to be in an office Monday through Friday, a significant share of the workforce became untethered to their home cities and have made their way toward the exit. According to CoStar, New York, LA, San Francisco, Chicago, Seattle, Boston, and Washington DC are all among the list of cities to post year-over-year declines in asking rents through Q4 2020. 

While the outgoing flow of residents has been lumped together as one homogenous cohort, there appear to be at least two major groups leaving. The first group of COVID-nomads is defined by those that already had eyes towards more affordable and spacious housing options over the next couple of years. Given the urban context in 2020 and the attractively low borrowing costs, many of these renters simply said, “Hey, why not now?” and moved up their progression timeline. These are the types of households that are more likely to be buying baby carriages before the next time they step on a subway, and their transition out of major metros is probabilistically permanent. The second group contains those who are transient, often early into their careers, working remotely, and still seeking the lifestyle amenities they had enjoyed pre-covid. Watching how this group behaves as large companies start calling workers back into the Office and cities look more like their pre-pandemic selves will be telling.   

Office

Today, there is no property type subject to more speculation than the Office.

Unlike multifamily, Retail, and industrial, where COVID has mostly magnified pre-existing trends, the pandemic has led to rampant reimagination in the office sector. Our understanding of how both firms and workers interact with physical office space to optimize productivity is permanently changed. According to the Census Bureau’s Household Pulse Survey, an estimated 38% of working American adults have transitioned to remote work in some capacity due to COVID. The share is even higher in large office markets like New York and Los Angeles, rising to 47% and 45%, respectively. En Masse, The American Workforce traded morning commutes for Zoom links, an illuminating natural experiment that has challenged the Office sector’s core-assumptions. When PwC launched its remote work survey in June, 44% of employers thought that the transition to remote work has allowed their teams to be more productive than before the pandemic.3 When the same employers were polled again in December, the share climbed to 52%, indicating that not only has a consensus emerged, but that efficiency has improved following the initial learning curve. The realization that companies can not only maintain but actually improve performance through a remote infrastructure is a ‘no turning back,’ Pandora’s box type of moment. It should therefore come as no surprise that, according to the same survey, only 21% Of US executives think that a full five days in the office every single week is the best setup to maintain a strong corporate culture. 

The likelihood that total office space demand will have a smaller footprint in the post-pandemic world is a consideration that we cannot afford to take lightly. A Fitch research report released just last week estimates that an additional 1.5 work-from-home days per worker would lead to a 15% reduction in property-level net cash flow— a development that would meaningfully recalibrate our understanding of risk and value. Given the long-dated lease structure common throughout the sector, it will take a few years for emerging preferences to filter through fully. Moody’s Analytics REIS forecasts that vacancy rates are likely to rise to near-record levels through 2023 before beginning a gradual recovery in 2024. 

Of course, not all metro-level office markets will move as one. Some of the migratory demand that is leaving large cities and contributing to localized weakness ahead will also lead to strength in other markets, particularly in major Metro adjacent suburbs. According to Real Capital Analytics, Central Business District-located Office properties posted a 0.2% decline in value for the year. On the other hand, suburban located office assets saw valuations continuing to grow at a healthy 6.6%.

Industrial

The industrial sector remained the undisputed top performer of commercial real estate through an otherwise challenging 2020. Secular tailwinds, such as e-commerce adoption, grew from a healthy gust to a sustained hurricane force. Over the past decade, online retail sales have increased by an average of 15.2% annually. Brick and mortar retail sales over the same period have only grown by an average of 3.4% per year. The share of total Retail sales satisfied by online orders has steadily risen, entering 2020 At 11.3%. In the second quarter, as nonessential retailers across the country closed their doors, this share skyrocketed above 16%. While the share has reverted down to 14%, the pandemic has permanently transitioned some in-person retailing onto online platforms. Online grocery delivery services, a concept that had faced greater consumer resistance than other E-platforms before 2020, stood uniquely positioned to benefit from the demands of a lockdown economy. According to grocery e-commerce specialist Mercatus and research firm Incisiv Projects, online grocers accounted for 3.4% of all US grocer sales in 2019, before swelling to 10.2% in 2020.4 Further, the same study estimates that online groceries will satisfy 21.5% of domestic demand by 2025. Surging demand for E-grocers also means an increased demand for distribution and fulfillment facilities in close proximity to consumers. In the most recent Emerging Trends in Real Estate report, fulfillment facilities ranked as the subsector with the best prospects for future investment and development opportunities. 

Another source of new industrial demand can be traced to the supply chain disruptions experienced this last year. The pandemic exposed critical sensitivities, and e-commerce retailers are looking to better safeguard their ability to match inventory supply with order demand. Doing so has meant a transition away from “just in time” distribution models in favor of “just in case” models instead. The latter requires excess warehousing space to stock contingent inventory. 

Retail

There was no shortage of pessimism surrounding the retail sector heading into 2020, even before there was a pandemic to contend with. Pre-pandemic, Retail was in the midst of what was widely expected to be a 10-year shakeout and a painful rightsizing process. As noted in the 2021 ULI / PwC Emerging Trends Report, the US retail sector had three major headwinds going into last year: the US has more retail square footage per capita than any other country in the world, an increasing share of core-retail activity has transitioned online, and domestic consumers have experienced a long-term stagnation of wages. Concepts that were on the path towards obsolescence, with hopes of maybe squeezing out a few more years of economic solvency, are those that have struggled the most during COVID— none more so than department store retailers.

While the outgoing companies will argue otherwise, a case can be made that 2020’s pain will help the retail sector pave a quicker path back to recovery. The sector has gone from Darwinism to ‘Darwinism on steroids.’ Though, before we can imagine a radical future where physical retail demand sits just a bit higher than supply, the existing glut of obsolescent space needs to find adaptive reuse. After all, not every struggling mall will be turned into an Amazon distribution center. Lifestyle centers, where fitness centers, housing units, and mixed Retail are blended together, are one of the leading concepts to aid in re-positioning and re-absorption. According to Real Capital Analytics, Lifestyle Centers have an average price per square foot that is almost three times higher than average assessed for Mall assets, reflecting some of the value that can be recaptured through re-positioning.  

As Retail continues to match physical footprints with the forward-looking consumer behavior, the short-term reversion back to normalcy will at least provide some much-needed relief. Cabin-fever-consumers armed with unspent stimulus checks should give Retailers a potent shot in the arm, even if the upside effects are only temporary.

Outlook

Whether it be the public health front, the economy, commercial real estate, our lives in general, or how all the above are inexorably linked, 2021 has all the makings of a year defined by recovery. The Federal government’s push to have vaccine availability for every US adult by May 1st means that herd immunity is not too far behind. 

Between the safe resumption of our pre-pandemic lives, the commitment by the Federal Reserve to maintain low interest rates even as inflation pressures rise, and the unprecedented level of stimulus in the hands of consumers, a perfect storm of economic momentum is brewing just offshore. If anything, there is increasing concern that the economy has the potential to overheat in the year ahead as too much fuel enters the fire all at once. According to the February and March iterations of the Wall Street Journal’s Economic Forecasting Survey, a majority of leading economists believe that this year will have more upside risk than downside risk, and more than 80% think that the newly passed stimulus will generate inflation higher than the Fed’s 2% target.

In many ways, we as an industry remain in wait-and-see mode, with questions over a return to the office timing and rightsizing are still swirling overhead. Although, overly conservative and reactive strategies rarely make winning formulas in Real Estate. Now is the time for landlords to engage tenants and companies to engage employees about emerging preferences, then execute on a strategy. If 2020 has taught us nothing else, it’s that the pace of change can accelerate quickly, and falling behind the curve of innovation is a costly and often un-correctable mistake.

 

Endnotes
1. https://mf.freddiemac.com/docs/January_forbearance_report.pdf
2. https://www.cbpp.org/research/housing/housing-assistance-in-american-rescue-plan-act-will-prevent-millions-of-evictions
3. https://www.pwc.com/us/en/library/covid-19/us-remote-work-survey.html
4. https://www.supermarketnews.com/online-retail/online-grocery-more-double-market-share-2025

Two Questions Every CRE Advisor Must Always Ask

Some things in commercial real estate really are simple, and this is one of them. Here are two simple questions that you need absolutely no industry expertise to ask, but that you absolutely need to be asking your clients.

Our business doesn’t always seem like an easy one. After all, we deal with extremely valuable assets or with complicated legal arrangements that can last for years. Those of us who are in property management are responsible for countless parts of a building’s operations and for managing scores of relationships.

You’d probably think that the most important question in the commercial real estate industry is like the Accounting oral test question in the movie Back to School – one question, with 27 parts. In actuality, the two best questions in a savvy commercial real estate advisor’s arsenal contain a combined total of just five words. When asked at the right times, these five words will help you better understand your clients’ motivations, wants, and needs — and in turn, how you can best help them achieve their goals.

Question 1: Why
For a single, simple word, “why” is amazingly powerful. When you’re a new-to-the-business advisor, you can use it to keep a prospect talking while you’re figuring out what to say next. The most senior advisors in the industry, on the other hand, use it to gain deeper insights. Just about any response from a client can be met with “why,” and in just about every case, “why” will get you closer to the information you need to help a client take the appropriate actions to achieve his or her investment goals. Here are some examples:

  • I bought this asset to hold it long-term… Why?
  • I manage this asset myself… Why?
  • It might be time to 1031 to a new property… Why?
  • I usually like to put my tenants on short-term leases… Why?

As long as the answer to the question isn’t completely obvious (and sometimes if it is, too!), “why” is one of the most powerful questions that you can ask. It can also be a good follow-up and, with the addition of a few words here and there, can even be used a few times in a row. Here’s an example:

“I manage this asset myself.”
Why?
“Because property managers are too expensive and don’t do a very good job.”
Why do you say that?
“I’ve worked with three different ones and that’s been my experience.”

Question 2: What If You Don’t…
“What if you don’t…” is the second important question. It is extremely powerful because it strips away artifice and leaves true motivation behind. How many times have you had a client tell you that he was going to sell a building and then turn out not to do a transaction? To avoid this problem, consider asking “What if you don’t sell your building?” Sometimes, the client will tell you that she is fine holding onto it. In other cases, she’ll tell you that she has no other option or that the other options are too unattractive to stop her from selling.

Some commercial advisors are scared to ask a client about not taking action. However, just as it’s almost impossible to talk a client into doing something that she doesn’t really want to do; it’s equally hard to talk her out of doing something that fits her strategy. In either case, what you really want to do is to find out the truth of what the client actually will do so that you can begin making plans to help her.

These two questions are both easy and difficult to ask. Though simple, they are powerful. And in addition to helping you uncover which prospects need your help, they’ll lead you closer to how you can help them.

Re-thinking Talent & Recruiting In Commercial Real Estate — And How To Do More Than Just Talk About It

SVN’s Leslie Bateman discusses how the talent and recruiting landscape in commercial real estate is changing, and how we can seize the opportunity it presents.

Rapid and continual advances in technology have been disrupting many of the sectors that anchor the U.S. economy, including the commercial real estate industry. However, the commercial real estate (CRE) industry has long been known to be slow to adapt, often “lagging behind” others when it comes to large-scale industry transformations. While other industries blaze forward to embrace technology and digital disruption, for the most part, CRE has only budged.

Experts suggest that this industry-wide delay in advancement is due in part to the age imbalance of the industry. This isn’t new information, as aging of the CRE industry is known and well documented: According to CIRE Reader Surveys and NAR Commercial Member Profiles, the average age of a CCIM member is 54 and the median age of a commercial Realtor is 60.1

In addition to age diversity, another area ripe for improvement lies in the adoption of new technologies. Much of the commercial real estate industry still relies on traditional methods of doing business, preferring the experienced and familiar over the new and risky. As a cyclical result, the industry has become less attractive to younger people, who often prefer organizations and job roles with a high degree of technology integration and support.2

What the CRE industry has now is an incredible opportunity — to harness new technologies, redefine its talent processes, and alter the trajectory for future success.

Digital Disruption, COVID-19, and CRE
Today, digital disruption is all-pervasive, leaving no industry untouched. Digital innovation has the power to change markets and economies, accelerate business operating models, and wholly reinvent the way business is done across the globe. While certain industries feel the profound influence of this digital transformation immediately, others – such as commercial real estate – are a little late to the game. With the surge of CREtech over the past two decades, CRE companies have begun building momentum by integrating technology with the built world and associated systems. However, at its slower pace and with nothing forcing it to move any faster, commercial real estate still largely remains behind.

Until the COVID-19 pandemic.

The global pandemic has changed the nature of office and work culture considerably, forcing all industries to adapt to remote work and rely on new methods and tools for virtual engagement and operations. Some companies (such as Spotify and Facebook) experienced cost-cutting epiphanies early in the pandemic, taking action after recognizing that the in-office concept simply won’t be necessary into the future.

While the pandemic has forced some CREtech innovations to flourish, it has also placed a magnifying glass on industry problems and shortcomings. For CRE, an industry still reliant on handshakes, years of experience and Rolodexes, the immediate shift to virtual work hasn’t been easy. The industry-wide disillusionment has accelerated the need for CRE companies to acknowledge, accept, and lean into major change. It’s not the catalyst we expected, but the pandemic has opened a large window of opportunity for the industry to make big strides toward a more prosperous future.

 

The Pre-Pandemic Talent Landscape
It’s becoming increasingly evident that, as CRE companies figure out the technologies required to support digitization shifts, they need to secure the right “talent” in order to accelerate the pace of adoption and implementation.

Prior to the pandemic, the talent landscape in CRE skewed heavily toward the Baby Boomer generation. There was little to no focus on recruiting Millennial and Gen-Z talent. In 2019, 45% of CRE employees were 55 or older compared to 4% in the 19–24 age range. In comparison, 24% of the workforce across all industries and 22% of the banking and insurance workforce were 55 years old or older.”2

This imbalance is both emphasized and continued as the industry prefers experienced hires, over-indexing on industry experience and comfort with traditional job roles. The outcome here is compounding: firms continue to contribute to the rift by favoring experienced hires and maintaining conventional practices; meanwhile, the industry becomes less attractive and less accessible to younger generations.

Preparing for the Workforce of the Future
To help companies attract and retain up-and-coming talent, reduce the demographic gap, and create a more fulfilling work environment, leaders will likely need to reexamine the talent function and its processes.2

As Deloitte Insights states: “The pandemic is expected to force a paradigm shift in the way the industry operates and how work is done. Digital transformation could play an important role as companies wrestle with liquidity and profitability in the near term and prepare for the post-crisis world. And so CRE companies should look at digital and talent transformation in tandem.”

While change is not easy and certainly not always comfortable, the sooner CRE companies understand and embrace the shifts they need to make, the better off they will be. Clearly, digital advancement is critical for CRE organizations’ success and relevance. The talent implications are vast.

CRE leaders must work to balance the talent landscape by rethinking and adapting to the way their employees work, embedding technology into their decision-making, and redefining skills, talent processes, and practices to meet new demands. The bottom line: Hiring younger talent is no longer optional, it’s essential.

At SVN, we often talk about “pulling the future forward.” This concept is so much more than a tagline. We live, breathe and practice this mentality daily through promoting a culture of learning, embracing remote work flexibility, hiring for location-agnostic roles, providing remote/online systematic training for new hires, and by believing in the powerful data on workplace diversity.

Diversity has long been a hallmark of the SVN brand and business model, and we strongly believe in the research proving that workplace diversity (e.g., gender, age, ethnic, cultural) leads to smarter teams and greater company success.3

Studies show that the most diverse companies are now more likely than ever to outperform less diverse peers on profitability4, and we’ve seen this firsthand at SVN.

To further underscore our company-wide belief in the power of diversity, here’s an inside look at SVN’s employee base:
· 73% women
· 40% minorities
· 53% under the age of 45

 

The Opportunity of a Lifetime
The COVID-19 pandemic has exposed unsustainable truths about the CRE industry’s approach to recruiting and retaining talent.

So now what?

If CRE firms want to find success in the future, many will need to step back to analyze and upgrade their current talent processes. Digitization, remote flexibility, and diversity should hold more weight in the talent landscape, and it’s time for us to do more than just acknowledge the known lags, more than just talk about where we can improve. It’s time for us to take action… to really make change.

In this challenge lies immense opportunity. For those in leadership positions, I challenge you to think about your own recruiting strategies, open roles, and growth goals. What adjustments can you make? Are some required skills now irrelevant with technology, and years of experience an arbitrary line in the sand? Are you willing to place your trust in the positive research on workplace diversity and prioritize it in your next hires? If these initiatives seem daunting, scary, overwhelming… you’re not alone. But just as we must trust in the data on diversity, we must also trust that great things rarely come from comfort zones.

As Virginia Rometty so eloquently states: “Growth and comfort do not coexist.”

 

Endnotes
1. CCIM Institute, “The Millennial Way,” accessed March 4, 2021
2. Deloitte Insights, “Preparing for the future of commercial real estate,” accessed March 4, 2021
3. Harvard Business Review, “Why Diverse Teams Are Smarter,” accessed March 4, 2021
4. McKinsey & Company, “Diversity wins: How inclusion matters,” accessed March 4, 2021

Finding Success In Commercial Real Estate: The SVN Difference

Transparency and openness have long been hallmarks of the SVN culture and business model. Embracing and fostering inclusivity drives our approach to practicing commercial real estate, which is rooted in proactively cooperating and collaborating with our colleagues, communities, and even our competitors. It is this shared vision that enables SVN to create more value for our clients — 9.6% more value, to be exact.

We recently held our quarterly “JumpIN” event, which is designed to acclimate and welcome new-to-SVN advisors to the systems, tools, resources and culture inherent in the organization. Today, we’re pulling back the curtain and inviting you in to one of our internal JumpIN training sessions. And in the open and transparent manner in which SVN operates on all fronts,  we’re giving you a closer look at how we train and develop our SVN advisors and staff.

The commercial real estate industry is rapidly growing and constantly evolving, driven by powerful, transformative trends in technology, consumer behavior, culture and more. In such a dynamic, mercurial and competitive industry, it’s critical now more than ever to build a strong point of differentiation that helps an SVN advisor stand out as the advisor of choice.

So, what makes one commercial real estate advisor stand out from another? As a CRE broker, what can you offer that your competition can’t (or won’t)? How do you become truly different? And, ultimately, how do you leverage your point of differentiation to create more value for your clients, colleagues, and communities?

These were some of the questions that led to the creation of what we call The SVN Difference.  

  One of the most profitable commitments SVN advisors can make is to become a champion of understanding and articulating all components of the SVN Difference. Just as its name implies, The SVN Difference is the strongest differentiating value proposition that SVN advisors have — it’s the sharpest tool in the toolkit.

Democratizing commercial real estate information to bring greater transparency to the marketplace is receiving an abundance of attention today – our company and the SVN Difference were built on this idea in 1987.

Our forward-thinking, innovative approach early on positioned SVN to be on the bleeding edge of technology in CRE. For 30 years we have pioneered the development of online collaboration platforms, allowing us to deliver better results for our clients. In fact, SVN was the first firm in the industry to connect our offices in the southwest via a local area network. Later, SVN developed the industry’s first online publishing platform, known today as Buildout. Today, we’ve opened up our weekly in-house sales meeting, SVN Live, to anyone who wishes to participate.

So, what does all of this mean?  

  It means that SVN was built to be future-proofed.

It means that SVN was built to deliver better results.

It means that SVN was built to last.

The commercial real estate brands with whom SVN competes are all themselves competing on size and breadth. Whether it’s the highest number of brokers, greatest number of markets served, or the most access to data — they are all issuing the same narratives. It is therefore our job as SVN advisors to effectively articulate our compelling point of difference and demonstrate what we can do that the competition cannot.

It’s important to keep in mind that the SVN business model is  rooted in openness and transparency in conjunction with a fee sharing model, which ensures that we’re putting our money where our mouths are.

Unfortunately, SVN is the exception — not the rule. But it’s our mission to change that.

It’s rare for the industry to step back and question the soundness and integrity of industry business models of which they are a part and ask, Why do things work this way?, Why do other industry brokerage models fly in the face of fundamental economics? For instance, today, more than 80% of investment sales transactions are double ended (e.g., the same broker who lists the property also finds the buyer). This happens in an environment where more than 65% of all buyers come from out of state, and more than half the buyers can be categorized as new or unlikely buyers. These buyers are not in any one broker or brokerage firm’s database.

This begs the question: Are the seller’s interests placed first, or are the broker’s (and his/her quest to earn twice the fee)?  

  Upon close inspection of the commercial real estate industry, you’ll see clear points of differentiation between SVN and its global competitors. Exemplary SVN advisors understand that the key to success is mastering these differences and leveraging them to offer clients something the competition is unwilling or unable to offer.

Models like SVN, which embrace automation, collaboration and cooperation, are uniquely positioned to take market share in this era of change, as client behaviors and expectations evolve. SVN advisors have a tremendously powerful competitive differentiating value proposition to bring to the table.

SVN advisors are part of a brand that offers something completely different from what any local, regional, or national firm is offering. This is the SVN Difference. And this difference is what ultimately creates 9.6% more value for our clients.

Now that’s a tremendously powerful competitive advantage.

 

About SVN:

The SVN organization is a globally recognized commercial real estate entity united by a shared vision of creating value with clients, colleagues, and our communities. The SVN brand is comprised of over 1,600 advisors and staff in more than 200 offices across the globe in six countries. Our brand pillars represent the transparency, innovation, and inclusivity that enables all our advisors to collaborate with the entire real estate industry on behalf of our clients.  SVN’s unique Shared Value Network® is just one of the many ways that SVN advisors create amazing value with our clients, colleagues, and communities. For more information, visit www.svn.com. All SVN offices are independently owned and operated. To learn more about becoming an SVN commercial real estate business owner, visit http://www.svn.com/franchising-opportunities/

Why you need to tune into SVN | Live

What is SVN | Live? One of the hallmarks of the SVN® system is SVN | Live®, our weekly commercial real estate property broadcast goes out to all 200+ offices and is open to the entire industry. New and featured properties, represented by SVN Advisors, are reported on during the broadcast to SVN Advisors, clients, competing brokers, independent investors, and anyone in the industry who registers via our SVN.com website. In today’s challenging environment we are able to promote client properties to the entire industry on the webinar, via YouTube and other social media and also in our weekly property blast.

SVN Live Screen Shot

Why do we do this? We believe in leveraging technology and the transparency of the SVN system to promote our clients’ properties as quickly and to as many people in the industry as possible. Because we couple this technology with our shared fee platform, brokers from competing organizations are incentivized to join the meeting on behalf of their own clients. We are constantly updating the format and the technology behind this meeting, but its evolution is a typical example of SVN innovation.

Is this something new? SVN | Live began as a Monday morning sales meeting in our single office back in 1987. As the company expanded across the country, offices began connecting telephonically and via webinar thereafter. In 2012, we moved to an interactive format with slides that we promoted via social media. In 2014, the leadership team decided that if our goal was to create increased demand for our properties we needed to open up the sales call to non-SVN colleagues, clients and potential clients, becoming the first commercial real estate brand to embrace the power of technology-enabled open markets. Recently, we made further investments in the technology and added screen-sharing, re-broadcast and additional updated video capabilities.

Have a property you want featured on SVN | Live? Contact one of our many Advisors. Or want to see the inventory? Visit our SVN.com website and fill out the registration on the main page for the upcoming SVN | Live broadcast or Property Blast.

SVN Advisor Spotlight: Why SVN | Live?

The next video in our SVN Advisor Spotlight series features Kevin Maggiacomo, President and CEO of SVN International Corp. who recently sat down with Mike Fusek, CCIM, Senior Advisor at SVN | Rankin Company, LLC, Deena Zimmerman, Vice President at SVN | Chicago Commercial and Frank Jermusek, JD, President and Managing Director at SVN | Northco Real Estate Services to get their perspective on SVN | Live® and the steps they take to leverage this powerful tool.

Three long standing pillars of the SVN organization is that we are open, inclusive and innovative.

Open to diversity of thought and ideas.

Inclusive to the entire commercial real estate community.

Innovative with purpose driven clients, colleagues and communities.

An SVN product that connects all three of these brand tenants is SVN | Live. SVN | Live is a weekly webinar series that takes place every Monday at 8:30 AM PT/ 11:30 AM ET where SVN Advisors present their featured listings and properties. We encourage anyone that shares an interest in commercial real estate to participate. Whether you be a buyer, seller or competitor SVN is open to everyone, because its goal is to reach as many brokers and buyers as possible in order to create organized competition for assets.

The following is an excerpt from a recent SVN Advisor Spotlight Panel. The full video will be released to our Advisor base on The SVN Dashboard shortly.

If you are interested in attending SVN | Live, you can register here each week. Also, if you would like to receive the weekly SVN | Live property blast email that is sent out immediately following the webinar that showcases all of the featured properties from the broadcast, you can sign up for that on our homepage.

To find out more about what SVN has to offer you or your clients, please download our SVN Difference book, and visit our culture and career website pages.

If you are interested in franchise opportunities with SVN please visit our franchising page.

 

SVN Live Featured Properties 9-11-2017

Each week we present a selection of our featured commercial real estate property listings on SVN | Live. Be the first to know when a new property becomes available in your area. Everyone is welcome to join this event. The properties featured on the Monday September 11, 2017 SVN | Live call are listed below. Follow each link for further details on each property, including contact information for SVN Advisors. Click here to watch the SVN | Live Call recording.

 

FOR SALE:

4756 E. 32ND STREET | YUMA, AZ | ONLINE AUCTION

 

 

 

601 N. AURORA ROAD | AURORA, OH | SUBJECT TO OFFER

 

 

MULL AVENUE | AKRON, OH | $2,000,000

 

 

 

711 N. PRESCOTT AVENUE | WILLCOX, AZ | $1,550,000

 

 

901 N. 7TH STREET | PHOENIX, AZ | $1,900,000

 

 

1195 VICTOR HILL ROAD | GREER, SC | $2,790,000

 

 

2301 W. INDIAN SCHOOL ROAD | PHOENIX, AZ | $5,999,000

 

 

1015-1031 BRIDGE STREET | COLUSA, CA | $6,900,000

 

 

745 N. DOBSON ROAD | MESA, AZ | $8,000,000

 

 

 

To see all of SVN’s available properties, click here.