Many tenants are often confused by the plethora of choices in selecting a commercial real estate firm, often categorizing firms as either large or small. In some matters, bigger can be better but with real estate firms, size can be like the proverbial trojan horse: the large firms are bigger because they have many more landlord clients, who command more of their time, energies and influence.
Why is this? Well, the landlord’s have bigger marketing and management budgets to support the overhead of the larger firms that they typically hire. Think about it, if you recognize a big firm’s brand because you saw their name on the side of a building, they’re probably a landlord firm. In practice, the landlord firms tend to be bigger and the tenant firms tend to be smaller.
Thus, a much more significant distinction for tenants to recognize is the difference between tenant firms versus landlord firms. Naturally, this distinction is not well publicized. Why should it be? The landlord community is the biggest beneficiary of tenant confusion… Why do you think a typical New York City office lease is 50+ pages of arcane and unreadable jargon and contingencies?
A large firm will tell you they have greater resources such as market research, analysis, national/international coverage, construction, legal, land, hotel, retail, warehouse, farmhouse, outhouse capabilities.. you get the point. There’s more feature creep and bells and whistles than the latest mobile app..
If you’re only looking for office space, you don’t need these services. Nor do you need to know what the building leased for two years ago (or even two months ago). What a tenant really needs is honesty, accountability, transparency, efficiency and many other things that a big firm cannot always provide.
Unfortunately, real estate firms don’t scale well. In fact, in many large firms the personnel are divided into smaller teams who are completely siloed and compete against one another. At the end of the day, brokerage is a relationship business and relationships are what provide the intangibles (honesty, accountability, etc.) that tenants value most.
Thus, if you're thinking that hiring a "big brand" serves your interests best, think again. By working with a tenant-focused firm, you can build a relationship that is "just right," grow together, and like Goldilocks, live happily ever after.