Can CRE Technology Help Position Your Brokerage Business & Agents For A Downturn?
Daniel Levison | November 26, 2019
Although none of us have a crystal ball, we do know that real estate is a cyclical business. Historically, real estate cycles have come approximately every 10 years. A close friend of mine and a successful broker with a large national company told me several years ago they hired a well-known and respected consultant to thoroughly research all of the empirical financial data relating to CRE.
As the story goes, after six months, the consultant was invited to make their presentation to the Board of Directors. They arrived with twenty plus boxes of data and delivered their report, and it shockingly only lasted a few minutes.
The conclusion? Over the last seventy years, CRE markets go up in years that end with a threeand down in years that end with an eight. I would have to say, over my nearly four-decade career in commercial real estate, that statement has basically remained true.
So what’s the point?
Downturns always come, and agents who utilize available technology to consistently track their future sales funnel give themselves and their managing brokers valuable insights they both need to plan and budget their expenses more effectively.
An agent that accurately understands whether their future revenue is coming from tenant representation, landlord representation assignments, sales or leasing assignments can more effectively tailor their prospecting for future business.
As a managing broker, having the ability to instantly access information on where my company’s revenues will be generated allows me to make more effective decisions on what technologies are needed to support that revenue. Additionally, understanding future revenue streams help provide insight on recruiting efforts.
Our former brokerage firm, CPP, branded ourselves as a full-service CRE organization, and we felt it was important to maintain somewhat of a balanced revenue stream in all areas of our business. If we weren’t doing deals in all areas of CRE – how could we claim to understand all aspects of the business? Understanding our firm’s future revenue streams at times did influence our recruiting.
CommissionTrac and Rethink are cutting-edge technologies helping agents and companies become more efficient, productive, and profitable. Through our open architecture and scalable platform, we created an integration with Rethink that seamlessly combines the best of their CRM technology with CommissionTrac’s automation technology.
The combined technologies empower users to gain deep insight into their deal pipeline, which can be used to project future revenue.
For example, a pipeline analysis may reveal your firm closes 20% of deals that reach the proposal stage, 30% of deals that reach the listing stage, and so forth.
Armed with that information, you can easily calculate how much revenue your firm is likely to generate over the next month, quarter, year, and beyond.
To see why Techstars Atlanta and Cox Enterprises are lead investors in CommissionTrac, and to find out how you can use our platform to gain clarity and insight on your brokerage company’s performance, pipeline projections, agent and company receivables, commission split plans, invoicing, and distributions, visit our website at www.commissiontrac.com and request a demo.
Author: Daniel Levison – Chairman CRE Holdings (Atlanta Investment Properties, CommissionTrac, Sharedspace) and Vijay Mehra, CEO (Rethink)