The Power of a Shared Database

There is a tendency to want to separate commercial and residential real estate into isolated and distinct practices that have little to do with each other.  As the president of Colliers International, I have the opportunity to work with many of Houston’s leading commercial brokers and they are all very aware of, and influenced by, trends in the residential Realtor marketplace.

The demand for residential homes, the number of newly build homes as well as the prices of existing homes are important analytical factors in the demand for raw land, retail properties and office buildings.  Commercial property brokers closely monitor residential market and attempt to stay aware of trends in residential brokerage.  This awareness is also based on the simple fact that they buy and sell the homes that they and their families occupy.  Sometimes these commercial brokers list their home, represent themselves in these transactions, and gain a real appreciation for the changes in the industry.  Commercial brokers are adopting business models pioneered by residential Realtors and adapting these techniques to the evolving commercial brokerage model.


Commercial brokers are awed by the pervasive scope and comprehensiveness of the residential MLS.  The way that residential Realtors share information in the MLS has created an incredibly efficient marketplace.  Homes can be quickly and efficiently marketed to over 10,000 local practitioners simply by entering the listing information into a shared database.  This database of listing information is then widely advertised to every prospective buyer by cooperating Realtors as well as the public via the Internet.

This efficiency and speed with which a home can be marketed stands in contrast to the slow and expensive process still utilized by many commercial brokers.  This process is characterized by expensive color flyers, thousands of “spam” e-mails and thousands of broadcast faxes.  It is in this blizzard of paper and unorganized information that most commercial brokers attempt to do their job.

Performing market research is an even more daunting task, because that requires trying to compile, organize and process information on these randomly marketed properties.  A commercial broker who needs to assist a client in search of a property to lease or purchase can expect to spend a day or more sifting through listings and updating information to prepare a list of available properties that meet that client’s requirements.  Several different on-line systems will be consulted; piles of flyers will be reviewed; many phone calls and e-mails will attempt to confirm and update this stale information.  Compare that with the minutes it takes to query and download concise and consistent information from the MLS.

Like the residential market, commercial brokerage has seen some firms attempt to pursue a discount strategy that offers a no-frills service.  Most commercial brokers realize that they must compete on the basis of service and representation to succeed, not cutting their fees.  This is particularly true in commercial real estate where many of the clients are businesses and corporations.  Most corporate customers appreciate a broker who competently and efficiently makes a transaction happen on schedule and on budget.  Most customers come to appreciate how a broker earns their fee, several times over, by providing guidance and representation that steers the transaction around potentially expensive pitfalls.

Since most successful brokers, residential and commercial, are focusing their efforts in the area of client service, it makes sense to share expenses in areas where they do not compete.  The routine tasks of maintaining an inventory database, preparing a hardcopy flyer, or updating a company website are not a client’s basis for selecting a brokerage.  Yet, these simple tasks can be expensive and time consuming.  That is why most brokers like to add there listing to International Real Estate Network to be syndicated  this shared system has been optimized around task management for the commercial practitioner.  Information that would require a large staff and a huge budget to compile is available to every member of the IREN.

An increased focus of resources on client service is a trend that characterizes both the commercial and residential real estate markets.