The real estate broker in the twenty-first century.

In my last few columns, I addressed the changing roles of owners and tenants in the new millennium. This week, I will be discussing the broker and agent in the real estate world of the near future. In an industry that will be different than what we know today, in the future, the real estate professional will be more important than ever, but only if he possesses the needed skills.

A few years ago, brokers were looked on as the poor dredges that pounded the sidewalk finding space for prospective tenants. When they found the space, they would show it to the prospect, make some inane comments, and hope that the space was what those lookers wanted. If successful in finding the space, the broker then made an offer to the owner with the hope of somehow something clicking. There was always space to show.

Good brokers would innately, and through experience, know how to present a deal in order to have an offer accepted. It was almost magical how these things sometimes came together. Terms such as "the art of negotiation" or "win-win" were bandied about - incantations mumbled by a coven of practitioners of the black arts of real estate.

There never was a secret society that knew just the right magic in order to be successful broker. It always was and still is the ability of people who can explain to others why it is economically feasible for a particular transaction to happen. These professionals are able to put together the right space for the right tenant not by using blind luck, but by a thorough understanding of the economics involved. Knowing how to use a discount and a capitalization rate is just as valuable, if not more, as knowing where empty space is located.

As we enter the next century, the growing corporate predilection of both the tenant and owner will require very sophisticated leasing brokers. The market will see fewer and fewer sole decision-makers and more and more consensus by committee. In this new era, both sides of the transaction will be looking for brokers who can offer the right mix of acumen and advice.

Larger and larger brokerage firms will be needed in order to satisfy the committees of corporate owners and tenants. Brokers will have to be financial experts as well as space planners. They will need to be able to put together teams of architects, contractors and engineers in order to satisfy the prospective tenant's demands. Good old Uncle Morty, the broker from the past, will not be the guy you are able to turn to in the future.

The vast majority of small to medium firms will merge, or be bought out by larger ones, or unfortunately for most, just disappear. The consolidation of our business will be brought about by the changing nature of the owners and tenants. These changes were explained in depth in my last two columns. Since the ownership and tenancy of real estate will evolve differently than in the past, being a broker will also require different skills than in the past.

Large companies will want large brokers to market and manage their space. Sophisticated new tools and techniques will need to be employed by brokers to find tenants in the next century. At the same time, tenants will require their brokers to help design the space they need, find someone to build it, and help them negotiate the city bureaucracy. Being a broker will not simply involve bringing a prospect from space to space.

A broker will be more of a consultant that assists the tenant throughout the leasing process and beyond. In order to prosper, he will have to position himself to respond to the needs of his customer long after the lease has been signed. It will have to be an ongoing relationship that never ends. The concept of tenant representation has and will continue to move us in this direction.

What has and will continue to change will be payment for the real estate professional's service. Eventually the day will come when we will be paid not by commission, but by the amount of time we spend on a given project. Just as other professionals charge by the hour, so will we. The old maxim, "You Get What You Pay For" will apply in the real estate business of the 21st Century.

Over the past several weeks, I have given you my view of real estate in the next millennium. As with all attempts to gaze into the future, it is any person's guess as to what that future will really be. Even if you and I don't agree as to what will transpire, we can agree that it will be more complicated and different than real estate has been in the past.