RCA Insights

The Role of Brokers

By 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.

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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.

If you are a current RCA subscriber log into your account to download the Global Broker Rankings report.

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.