As published in Scotsman Guide's Commercial Edition, March 2009.
The current recession has broad implications for commercial real estate. Far from another customary economic downturn or a buying opportunity for companies with available capital, this economic crisis likely demands a complete overhaul of traditional business models and delivery of services within all sectors of the commercial real estate industry.
Some commentators believe this is merely a technology problem, as though better software alone can erase the vast number of vacancies that mar the landscape.
Others have argued that this situation is the result of poor forecasting -- devise a new formula, so the strategy goes, and mortgage brokers can better prepare themselves for the next challenge.
These assertions often overlook the warning signs that preceded this crash, however. They also ignore a principal cause of the problems within the real estate industry: a proprietary network of commercial real estate brokers and agents, each assigned to a specific territory with explicit instructions to not intrude upon someone else's "turf." This system undermines clients' ability to make informed decisions, thus weakening real estate professionals' credibility as supposed experts.
Mortgage brokers are in a prime position to help promote a more open and honest approach to the commercial real estate business. They can encourage real estate agents to resist proprietary listings and to get their clients the best information they can -- even if it means entering another agent's area.
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