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The changing face of corporate America.

Few brokers can look to 1993 without realizing the rapid changes and new directions the real estate business has taken. As we attempt to forecast the year, there are several components to analyze, but one of the most profound is the changing service needs of clients, and the copious business being generated from corporate outsourcing.

In an economic sense, we have hit a point of stabilization. Business has gone through its rightsizing, and in more recent months has been able to focus on developing a game plan for the future.

One of the results of corporate rightsizing is the new emphasis that companies place on outsourcing their real estate needs. Projects that were once traditionally handled by staffing-up with an in-house real estate department, are now handled through vendors, for greater economic efficiency. We can safely conclude that this is not a fleeting trend, but a broad and consistent repositioning of the marketplace on whole. As companies continue to seek services to satisfy a myriad of corporate needs, real estate firms must be able to adapt and comply with the demand.

This has had a dramatic effect on the industry. First of all, as corporations and institutions deliver more work to their vendors, they also look for more in return. Consistency is, of course, the key factors. As vendors, we must learn and understand the company's agenda in order to apply this knowledge to leveraging the deals, finding the correct economies of scale and effectively representing clients' interest in broad based assignments. Corporate America has begun to expect far more than market savvy from brokers who represent their real estate portfolios.

Today they are seeking a full service firm that can also provide

* Financial Expertise: This can range from analysis to accounting and complete auditing skills. Corporation expect their brokers to be the "watch dogs" on the financial end of their real estate deals

* Facility Operation Knowledge: To negotiate the best alternative, we must be able to analyze all building systems to determine their effects on the company's occupancy, and also to determine the bottom line costs of a building's operating procedures

* Sensitivity to Environmental and Legal Concerns: We must be able to advise clients on environmental issues and ensure legal compliance with new issues emerging, such as the recent ADA legislation

Furthermore, to ensure corporate confidence in a real estate firm's ability to nationally represent business interests, vendors need to substantially build their own firm's infrastructure. As chairman of Riverbank Realty, we realized the importance of augmenting our brokerage skills in order to provide services in the direction in which the business was heading. This was, in part, the impetus for the merger with Galbreath. The combined skills of what is now Galbreath Riverbank, has enabled us to provide the technical and financial tools required today.
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Title Annotation:Review & Forecast, Section V; forecast for real estate market based on economic trend of corporate outsourcing
Author:Mosler, Bruce
Publication:Real Estate Weekly
Date:Jan 27, 1993
Previous Article:Making 1993 a year for investment.
Next Article:Closing the bid-ask gap.

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