How We’re Disrupting the Corporate Real Estate Industry
What’s your favorite secret in the Twin Cities? Maybe it’s a bakery you hit for doughnuts every Saturday morning before the crowds roll in. Maybe it’s the tiny barber shop where you’ve been getting regular haircuts for years. Or if you’re a parent, maybe it’s your on-call babysitter whose number you guard under lock and key.
For our clients, our passionate team of advisors are often described as their best-kept secret. In a corporate real estate industry that’s competitive and full of brokers looking for your business and their commission, Cresa is radically different. But we don’t want to be a secret any longer. Our model is completely transparent, so you can feel free to shout it from the rooftops: Cresa is disrupting the corporate real estate industry.
Here’s our not-so-secret sauce, in three parts.
A Radically Different Compensation Model
In a real estate deal, most of the money lies in the commission. If you’re a real estate broker working on a transaction, of course you’d want to keep as much of the commission as possible. That means most brokers aren’t motivated to provide additional value-add services. When they’re showing clients potential spaces, bringing in construction project management experts means extra costs to the client or a fee split for the agent. Those experts often work in a different part of their business, meaning groups don’t share information (creating silos) and the broker is incentivized to close the deal quickly to collect the full commission before anyone else is involved.
At Cresa, we think that model is broken. Too many individual brokers are earning huge commissions, without providing the service or level of sophistication to justify it.
So we set up our local office to eliminate the commission compensation model. That’s right — no individual in our office makes a commission. Instead, commissions go to the entire office and all of us are salaried, just like at a professional services firm, motivated to provide the highest level of service to our clients. Because no individual is gunning for a big commission, our entire team can take the commission from a transaction and spread it our across all our service lines: confirming a real estate strategy, finding the right space, getting the best deal, overseeing the design and construction, selecting the furniture, managing the relocation and so on. That integrated model means our customers get top-notch service and expertise throughout the process. We do whatever it takes to serve our clients and meet their requirements, and we’re able to do that because we work collaboratively and aren’t incented to maximize personal commissions like our competitors.
Twice in the past year, we reviewed a project, estimated the market commission and told our client, “We can do all of the strategic planning, project management, relocation management and the brokerage just for the commission.” And sometimes, we even take it one step farther. If we’re managing a large transaction and we think the commission is excessive compared with what we’re providing, we’ll give some of it back to the client through a fee share. Let’s be honest here – while the Landlord pays the commission to the tenant’s agent, they’re using future tenant rent dollars to write that check. The tenant’s agent is never “free” – the tenant is paying their agent directly or indirectly. When we share our fee with the client, we are transparent about our compensation and we give a percentage of our client’s money back to them, reducing their overall cost directly.
A Team Approach
Our integrated approach to client projects encourages the team at Cresa to double down on teamwork and provide best in class service. When we start working with a client, they’re assigned a project team. That team works together throughout the duration of the project, bringing in in-house experts to manage strategic planning, the transaction, design, construction and other services. For the client, the experience is seamless and integrated. There are no hand-offs to other departments. No dropped balls.
Because we have so many skill sets in-house (finance, logistics, construction, design, labor analytics), we can pull in the right people at every step in the process. For example, early in the strategic planning phase, you might make decisions that will ultimately impact what kind of building you’ll need, who you’ll hire as an architect and where you’ll find the talent to support your operations. Hearing from our team of experts early on is a game-changer in the decision-making process.
We recently heard from a new client who hired Cresa because of that teamwork. They told us: “The other teams we interviewed stepped on each other and talked over each other. They weren’t cohesive, and they weren’t really offering integrated services. We saw in the interview that you truly work as a team.”
A Focus on Service
We approach our clients as strategic partners. When we start working with someone, we want it to be for the long term, so we focus on building strong relationships over time. Our biggest client, a Fortune 500 company, hired us in 1991. At this point we like to think we’re an extension of their team, as we aim to be with all of our clients.
Last summer we interviewed our customers to find out what they think about working with Cresa. One theme we heard over and over: “You work hard to give us the service we expect.” Many of our customers were used to working with our competitors, with a heavy focus on transactions, not service. Those firms didn’t work hard to maintain a long-term relationship, and our customers were pleasantly surprised by the level of service Cresa consistently delivers.
Nearly every customer we interviewed said the same thing: “Cresa makes me feel like a priority.”
Treating customers well and helping them make better decisions makes our team love coming to work every day. Recently chosen by Twin Cities Business Magazine as “Best in Business” for our results, our customer-driven, integrated model isn’t a secret anymore.
Spread the word: Cresa is disrupting real estate.