As the real estate industry grows globally and clients learn to deal with the global realities of the world economy, commercial brokers must keep innovating their ways to deliver world-class and strategic real estate services to their clients. It’s a good business for the brokers and good service to their clients, who now are demanding more and more specialized data, market information and services relevant to their industry.
Even the three key aspects of real estate – location, location and location – may not be enough to seal the deal for today’s savvy clients. Given the complexities of commercial real estate leases, there are a number of factors that may affect the deal, including rental rate, market conditions, location, condition of both the building and the space, amenities, neighborhood, transportation and concessions provided by the landlord. Tenants also want to get a feel for their future space. Can brokers help them visualize their future space? Can the space reproduce or enhance their identity and philosophy, and at what cost?
To answer all of those questions and provide better services, brokers are now increasingly collaborating with architects during the pre-leasing process, which enables them to provide not only various design scenarios and visualization of the future space, but also other pertinent information that would be critical for the client in their decision-making process. What will the finished space actually look like? How many workstations can be accommodated? How much is it going to cost to furnish the space? Does the building or space have enough infrastructure bandwidth to meet today’s technological needs? Will the space reflect the culture and work environment the tenant wants to create? What will it do to the tenant’s brand image?
Lately, commercial brokers have witnessed increasing cooperation between brokers and architects on this front. More and more brokers are tapping into the expertise and knowledge of architects during the pre-leasing and leasing process. Architects, on the other hand, also are collaborating and, in many cases, providing their assistance and services to the brokerage community at little to no cost, hoping to land the tenant as a new client.
But as with everything, there are always two sides to the story.
In order to further enhance services and provide industry specific research to clients, NAI Hunneman, a Boston-based commercial real estate firm, for example, has started the NAI Hunneman Medical Device Real Estate Index. It is one of the tools that the firm uses to provide medical-device industry clients with the following information, often needed to support the strategic plans of such companies:
• Financial data on recent leasing and sales transactions in medical device occupied real estate;
• Space availability contiguous to specific medical device sub-clusters and strategic partners;
• Accessibility of potential sites to medical device employment base, medical and dental schools, teaching hospitals, research institutions, incubators, airports and public transportation; and
• Qualification of potential sites and projects for state and local economic development incentives.
As service providers, it’s a commercial brokerage firm’s primary job to educate its clients not only about the local real estate market and potential space, but also about the pertinent market information as outlined above. The Massachusetts medical-device industry, for example, has been growing exponentially in the state, and it is in a broker’s best interest to service this industry better.
Working extensively with medical-device companies in Boston, and having tracked the real estate portfolios of 200 of the top companies in this market, NAI Hunneman’s study indicates that between first quarter of 2005 and first quarter of 2007, real estate occupied by the 200 companies in NAI Hunneman’s index increased by 4.9 percent, reflecting a steady employment growth in the medical device sector. The 200 companies in the NAI Hunneman Medical Device Real Estate Index occupy more than 10 million square feet of space, or an average 282 square feet per employee.
The Massachusetts medical-devices industry also has become a national leader in a world-class cluster, according to a recent study completed by the University of Massachusetts Donahue Institute and underwritten by NAI Hunneman and Ernst & Young. The study, MassMedic’s 2007 profile of the medical-devices industry in Massachusetts, describes a critical component of the state’s world class life science cluster and an economic sector that is a national leader in its own right.
Massachusetts ranks among the top three states in the United States in per-capita and absolute numbers of medical device employment. For Massachusetts, the medical-device industry continues to be a stable manufacturing employer that attracts investment capital and drives export growth.
Given the global nature of the economy and the way our clients are doing business world wide, brokers are now also providing services wherever clients need them. More and more brokerage firms are partnering with global real estate networks to offer services. NAI Hunneman, for instance, joined NAI Global, the premier network of independent commercial real estate firms and one of the largest commercial real estate service providers worldwide. NAI Global manages a network of 8,000 professionals and 375 offices in 55 countries throughout the world. Its professionals work together with a global management team to help clients strategically optimize their real estate assets. In 2006, NAI offices around the world completed more than 36,000 transactions worth over $40 billion. They manage over 250 million square feet of commercial space.
As the global economy becomes increasingly interconnected, innovation and a global reach have become vital characteristics in the delivery of strategic real estate services for commercial brokers.
