RCA Insights

The Changing Investment Brokerage Landscape

By on March 12th, 2019

Real Capital Analytics last week published its 2018 annual ranking of global investment sales brokers, which we began in 2011. Looking back over the results of the past eight years, several important changes in the industry are evident.

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Consolidation among the brokerage firms has been significant. In 2011, 801 individual firms brokered at least one commercial property valued at $10 million or greater, but last year that number had fallen to 662. Significant M&A activity was most acute between 2014 and 2016 and appears to have slowed over the past two years. However, focus has shifted from outright mergers to acquisition of top talent, individuals or teams of brokers lured from competitors with lucrative incentive packages.

Global reach is becoming increasingly important and the relatively few firms that have it collectively account for a 60% market share, up from less than 50% five years ago. In this analysis, global firms are defined as those where at least 10% of their activity is in each of three global zones. The list of global firms is a short one:  CBRE, JLL, Cushman & Wakefield, Colliers International and Knight Frank/Newmark Knight Frank. This trend is a motivating factor behind the consolidation of the industry and a testament to the globalization of the real estate capital markets.

Publicly listed shares among the major brokerage firms is now the norm. In fact, among the top 10 global brokerage firms in 2018, all but one are listed companies with billion-dollar-plus market caps. Investment sales remains a material component of their revenue, which also includes many other business lines including leasing, management and corporate services.

No disintermediation of the investment brokers is evident. In fact, the data illustrates quite the opposite as the percentage of all deal volume involving a broker increased to 62.8% in 2018 and has consistently increased over the years, particularly in Asia Pacific. While technology is greatly assisting brokers, particularly in expediting the marketing process, it does not appear to threaten the role of brokers as it has in other financial markets.

RCA clients can log into the RCA website to download their copy of the 2018 RCA Top Global Investment Brokers report and the report methodology. If you are interested in becoming a client, it’s easy to contact us

RCA representatives are at MIPIM in Cannes, France from March 12 to 15. Visit us at Stand P-1.F36. 

Bob White

Founder & President

Robert M. White, Jr. founded Real Capital Analytics Inc. in 2000 to bring greater transparency to the investment markets by providing real-time data of capital flows and prices of commercial properties. He is a noted authority on the real estate capital markets who is frequently cited in the press and has authored numerous articles for industry publications and the firm’s own Capital Trends publications.

Mr. White is a Counselor of Real Estate, a Fellow of the Royal Institution of Chartered Surveyors and a Fellow of the Homer Hoyt Institute. He serves on the board of directors for the Pension Real Estate Association and the advisory board for the Real Estate Research Institution. Before founding RCA, Mr. White spent 14 years in the real estate investment banking and brokerage industry. He is a graduate of the McIntire School of Commerce at the University of Virginia.