It’s Hard to Promise Everyone Everything: The Benefits of a Conflict-Free Brokerage Firm
Imagine you are a major law firm with a large litigation department. Your biggest practice is products liability defense representing drug, cigarette and medical device manufacturers in mass tort claims. You decide that because you have acquired a lot of knowledge about how these manufacturers operate, you can now also represent plaintiffs who have been injured by these products. Ignoring the fact that no law firm would ever even consider representing both sides of litigation and that no client would allow this to happen, the question becomes, “How would this law firm attempt to market two conflicting services to two completely adverse client pools?”
While this may seem like a theoretical question, it occurs daily in real life in a different industry: Commercial Real Estate Brokerage.
The largest brokerage firms in the world, who are under constant pressure to grow their revenue, do exactly what our theoretical law firm is contemplating: they represent both sides of a transaction in a zero-sum game.
These brokerage firms represent both landlords and tenants in the same market.
How do the large brokerage firms market themselves to two opposing constituencies? The easy way to address this problem is to create completely different marketing materials when pitching a potential landlord client versus a potential tenant client. As neither prospect sees what the other receives, the marketing materials can take contradictory positions and be effective.
However, what would the brokerage firms say if they knew both sides would be seeing the pitch? That’s exactly what happens on a brokerage firm’s website and marketing materials.
A review of the major brokerage firms’ websites reveals two very different approaches to this dilemma. For example, all firms feature individual webpages to showcase their services, and the larger firms have one for each; a dedicated page for tenant clients AND one for landlord clients. There are even large firms that showcase the same members of their team in the leadership sections supporting both the tenant transaction service offering AND the landlord service offering.
The fact is, when you want to represent both sides in an adverse matter, you are forced not to show favoritism to one party over the other. And therein lies the problem with full-service brokerage firms.
CLIENTS SHOULDN’T HAVE TO SETTLE FOR HALF.
They should make their brokerage firm choose a side and stick with it, just like their lawyers.
Business would be great if we could be all things to all people, but when it comes time to negotiate a deal, brokerage firms are no longer in the privacy of a pitch room, but out in the open – just like the language on their website. When your pitch is public, your real value proposition is forced to come into the light. By looking at large brokerage companies’ websites, it is clear that they struggle with an irreconcilable conflict.
While they may each choose a different approach to dealing with this dilemma, in the end they all end the same way: with compromise and evenhandedness as opposed to committed and zealous advocacy.
Our 100% commitment is – and always will be — focused on serving tenants.
In 25 years of business, CBIZ Gibraltar has never represented a building owner or landlord. Our sole objective is to help companies reduce their real estate occupancy costs by fiercely advocating for their interests at the negotiating table, maximizing competition for their requirements in the marketplace and creating a transparent procurement process so they can ultimately make an informed decision.