Brick And Mortar: How Much Office Space Do We Need To Succeed?
When I entered the real estate brokerage business in 1980, we spent our time either on the streets or in the office. Our office jobs were many: we read through the columns and columns of print ads in the New York Times , trying to figure out where the listings described in the ads might be located, then calling to attempt to obtain them. There were no exclusives in those days; everything was an open listing. We cold-called buildings looking for inventory. We searched for our clients by rummaging through drawers of 3×5 file cards on which addresses, phone numbers, and updates were scrawled. We left the office only to show or to canvass, which meant walking block to block tipping doormen and ringing doorbells to acquire inventory to sell.
In the brokerage business of that time, office space played a central role. With no exclusives, no co-brokerage, no voicemail, no cell phones, and no computers, agents needed the office to do almost everything. The spaces skewed functional rather than pretty. Under fluorescent lighting, we huddled at our rather makeshift desk barking into our phones and jostling each other as we browsed the listing file cards. Agents rarely changed firms because it was the same everywhere.
Over time everything changed. Today’s agent, equipped with a laptop and an iPhone, receiving listings in scores every day from co-brokers sharing through the MLS , can function completely independently of an actual office. The living room of your home, the bus, your car, a park bench – any of them can turn into an office with a few keystrokes. Yet in this environment, more brokerages build bigger and fancier offices all the time. Why?
Every summer I consider the exorbitant rent I am paying here in central Manhattan for an office which feels so empty of agents that I feel I should be subletting it to a bowling alley. Another office, at street level on a prime block in Tribeca, gets few walk-ins anymore now that everyone shops listings online. And I know the same is true for my colleagues and competitors across both the city and the country. We spend fortunes annually on offices which never fill up more than halfway, since agents need to be out on the street to successfully list and sell. The economics make no sense.
The way people across the business spectrum work has changed much more radically than the way companies, especially in mature industries, deploy office space. A good agent expects a desk in the office, even if they don’t plan to occupy it for more than an hour or two a day, two or three days a week. One basic fact of the business will never change: agents only earn when they are in the field. You have to show to sell.
As heavily funded start-ups continue to flood the brokerage space, the values of tech start-up office style have begun to impact the market not for properties, but for agents. The ultra-fancy offices of these new companies, with their pool tables and massages and cappuccino bars, elevate agent expectations at the very time that agents spend less and less time in these fully tricked –out spaces. I believe there are more significant ways to cultivate retention: management accessibility and expertise, deep marketing support, creative listing techniques – in other words, a real commitment to work with the agent to build their business.
Office interactions provide real value. We all learn from one another, whether it be negotiating techniques, pricing strategies, or showing suggestions. But like many sales business owners, I am less and less convinced that my enormous brick and mortar outlays create an appropriate return when the spaces are so often half empty. Is there a future for smaller spaces which enable us to create an ideas marketplace/meeting place without having to survey rows and rows of empty desks every day? Time will tell.