With Thanksgiving behind us and the end of the year coming, we are fully immersed in the holiday season. Suppose for a moment that you set out to do your holiday shopping – a few DVDs and the latest video games for the kids, a pair of earrings, maybe a flat-screen TV, and perhaps some delicious desserts to bring to a family party. The shopping likely would require a visit to several different stores to get what you need: an electronics store, a jeweler and a pastry shop.

Now suppose that, for whatever reason, you had to purchase all of those items at the same store. It is unlikely that you would be able to get what you wanted. You may have to change your plans and settle for something less than the best. At the very least, you would feel as though your needs were shoehorned into what the store provided rather than what you needed.

If you are like most people, that scenario seems ridiculous. However, for some it may sound all too familiar. The ill-conceived one-size-fits-all approach is precisely how many companies are treated by their commercial real estate brokers when managing national and international portfolios.

In most cases, when a corporation has worldwide projects, it hires a commercial real estate firm. The firm usually has a local transaction management team assigned to the overall project. When transactions take place in various locales, the firm hires its counterpart within its network to handle the transaction. Such is the case whether the transaction is a property disposition, a long-term lease, a small sublease or a building purchase. The focus unfortunately is on the firm, rather than on the client.

A more independent approach for managing national and international portfolios, one that allows for the managing broker to hire the best local broker and not simply the affiliated local broker, would usher in an era of better service, enhanced transparency and greater accountability. The result will be a clearer focus on the client, rather than on the broker’s firm.

The most immediate benefit for an independent approach is that it allows for better client service. In the shopping example above, it seems clear that there would be no single store that would ensure the best gifts were purchased, not even the “big box” stores, like Target and Wal-Mart, or the club stores, like BJ’s Wholesale and Sam’s Club.

Similarly, no single global provider or network has a top-three office in most markets in the U.S., let alone internationally. This holds true in any profession, including other business services areas such as accounting or law.

An independent approach would allow the managing broker to hire the best local firm, thereby avoiding “vendor lock-in.” An obvious example would be that different firms might be the better fit in different countries. Broker A may be the top firm in Dallas, while their competitor is the best in London.

This also holds true for different transactions in the same region. Consider an example of a large technology company that has a worldwide practice spanning the U.S., the U.K. and India. Due to growth and acquisitions, the company has two major requirements in India – a build-to-suit to host the company’s Asian headquarters and an expansion to a manufacturing facility.

The tech company’s U.S.-based broker favors an independent approach. Rather than immediately hire the same firm for both requirements, the firm begins an interview process to determine which local firm is best suited to each project. The process involves members of the brokerage firm, as well as the client, educating the entire team.

The choice is made to hire a different firm for each project. Factors involved in the decision include expertise in the project type, experience levels of the team members and the availability of the winning team to prioritize the work.

Ultimately, the process ensures that the best qualified provider is chosen, regardless of his/her company or network. Most importantly, the competitive process encourages excellence. Having worked to win the project, each firm is motivated to achieve its best. Additionally, a strong relationship is established between the transaction management team and the local firm. This will better enable them to potentially share market expertise, for example, when one firm needs market statistics in the other firm’s locale.

Enhanced Transparency

Corporate America requires transparency at every step of the value chain, primarily in public companies but also in private firms. The interview process described above calls for a great deal of information-sharing and review, providing the client with full transparency into the entire process.

The determination on which local firm to hire demands that the best firm be vetted and the strengths and weaknesses of the considered firms reviewed. By involving the client in the decision, the proper amount of transparency is provided.

A factor related to transparency is the avoidance of a certain type of conflict that often arises with commercial real estate transactions. Using the example of the technology firm again, perhaps the company is looking to lease significant space outside of Dublin. It might be very likely that a broker in a large network might already represent other growing companies looking at the same space alternative, as well as the top landlords in that market. This could cause a significant conflict of interest. An independent approach and the resulting interview process would help minimize or eliminate these types of conflicts of interest.

A final benefit of the independent approach is that it allows for greater accountability by the managing broker and its local brokers. There are two levels of accountability. First, the managing broker, while overseeing several local brokers, is solely accountable to the client for the success of each transaction. This ensures that the complexity of managing several simultaneous transactions falls to the managing broker rather than to the client.

The next level of accountability extends to the local brokers. Unfortunately, with network brokers, the managing broker is faced with a very difficult scenario when the local broker is not performing to expectations. The broker is hard-pressed to fire its fellow network broker because of the internal repercussions, and because he or she would risk losing business when the next project is imported into their local region. With an independent approach there are no such concerns. The local broker can be replaced if not performing to requirements and a new broker hired.

The argument between an independent approach and a network approach will continue to grow. An increasing number of companies have operations that span the globe. While years ago this was primarily the purview exclusively of very large corporations, we now see companies of all sizes with worldwide presences – from Fortune 500 companies to emerging high-technology and biotechnology companies to consulting firms. As those companies grow in number, they also will grow in their call for an independent approach to managing their international real estate portfolios. Brokers who truly focus on client service will answer the call.