By Bob White on March 23rd, 2017
While the role of intermediaries in the other major asset classes – stock, bonds, currency – has been greatly minimized, if not totally disintermediated, through technology, investment brokers continue to play a vital role in making the commercial property markets liquid and increasingly efficient. Moreover, their role in the investment markets continues to grow, with brokerage representation of the seller, buyer, or both, accounting for 68% of significant income property sales globally in 2016.
In Real Capital Analytics’ annual ranking of investment brokers globally, published this week, the consolidation and globalization of the brokerage industry is also highlighted. The top 10 firms collectively accounted for 83% of all brokered transactions in 2016, up from 76% in 2013. Just seven firms were active globally with transactions recorded across the Americas, EMEA and Asia Pacific. However, these seven firms all ranked in the top eight, with the sole outlier already making expansion plans into Europe.
Overall, nearly 700 firms were recorded in the rankings as having brokered at least one transaction valued at $10 million or greater in 2016, down from 841 in 2013. Although relatively small – and declining – in number, these firms are linking capital and property between a growing universe of approximately 200,000 property investors, of which only 20% may be active buyers or sellers in any given year.
Technology has played a valuable role in shortening the time required to market and sell a property, and for investors to transact across ever increasing distances. Technology will continue to make brokers smarter and more efficient, and the most successful brokers have embraced technological change. However, there is no technology in the offing that threatens to replace the role of the agents at the center of this fragmented universe of investors and heterogenous array of assets.
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