Locally owned commercial real estate firms have historically enjoyed tremendous success in major metropolitan areas. Ground-up, born and raised local professionals have personal relationships and market knowledge that often goes far beyond national corporate initiatives. Flexibility, responsiveness, creativity and local decision-making are key components to the highly competitive and knowledgeable brokerage industry. Nowhere is this more evident than in the Boston market.
As publicly traded national firms and multinational firms contend with worldwide economic difficulties, consolidation, and financial challenges, locally owned and operated firms have their business and their focus firmly on the territory and client needs that immediately surround them. More than 70 percent of Boston’s commercial real estate professionals work for local, independent firms. In fact, several of the national firms in Boston have become competitive through merger or acquisition of well-established, locally owned firms. Remember the names, Fallon, Hines & O’Connor, Lynch, Murphy, Walsh & Partners, Leggatt, McCall & Werner, and Whittier Partners?
Hometown Attributes
Local service provider firms existed long before the advent of the national service provider. In fact, versatility and flexibility in client service by local firms developed very quickly just to respond to the ongoing needs of the client. By establishing and providing a full spectrum of commercial real estate services, local firms have always competed strongly and have held high levels of achievement within the industry.
Services such as leasing, investment sales, corporate consulting, research services, tenant advisory services, property management, project management and others are available on a worldwide scale by local firms with local professionals. Independent national and international networks, affiliations and industry designations allow top quality experts to collaborate in servicing the needs of clients globally. Local accountability in a worldwide arena by accredited professionals is a luxury.
The locally owned firms emphasize flexibility and customized solutions while maintaining focus on the local markets. Understanding client needs and developing a customized approach to meeting the needs is the local firm’s number one priority. Ultimate flexibility brings out the very positive attributes of the entrepreneur.
Often times the local firm has a more consultative and thoughtful approach to its solutions for clients, thus bearing the rewards of closer relationships and higher personal satisfaction in its business. The local firm heavily reflects the creativity, image, professionalism and success of its leadership.
Transaction driven and revenue focused, some firms miss the service side of the professional services business. The smaller, nimbler size of locally owned firms make them unique in the current commercial real estate climate because they are big enough to provide clients with support, resources and services, while not having to navigate the obstacles of a large corporate organization. Local decisions are faster decisions. Responsiveness can make a significant impact when time is of the essence.
Market Influence
While the commercial real estate industry continues to be more challenging, larger national firms’ are impacted by the financial pressures of Wall Street, in addition to other economic and world issues. Significant reduction in fee revenue or a fluctuating stock price could influence the level of resources and support a company has for its internal brokers and clients. Conversely, locally owned commercial brokerage firms continue to perform on a regular basis even under the tough market conditions. In fact, those successes appear in the print media on a regular basis.
With much of the greater economic downturn affecting many, many service industries, the commercial real estate industry cannot avoid certain changes to survive and meet the continually evolving needs of their clients and customers. Indeed, consolidation is still having an impact on the industry, most recently, eliminating a major firm from the national platform. For example, a national firm’s recent acquisition of a major competitor could spill a dozen or more brokerage professionals into the hands of locally owned firms. The consequence may be disruption within both firms, confusion and competition arising from new business conflicts between clients, and the reality of brokers looking for alternative commercial real estate employment. The result is improved resources and professionals available to the locally owned firms in Boston. Not to mention that the above-mentioned circumstances can create a window of vulnerability for those firms.
Some within the industry comment that several professionals have come full circle: many had come from independent, locally owned firms and were wooed to national firms are now thinking real hard about the benefits of local ownership and participating once again on that platform. Additionally, brokers who have become established have the opportunity for ownership and partnership interests in the locally owned and operated firms. The benefits of ownership, the flexibility of time, the relationships, and quality and creativity of personal service is why the locally owned independent firms are coming out on top.
