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Outsourcing is recognized as one of the greatest organizational shifts of the last few decades. Harvard Business Review ranks it as one of the top business ideas of the century.
In recent years, the pressures on senior executives of corporations to cut costs and focus on the core business have been the key drivers of outsourcing. It provides the firm with a strategic solution to handle many non-core functions, under the designation of business process outsourcing. Information technology, human resources, marketing, sales, facilities management, and real estate are examples of corporate functions typically outsourced to third party providers.
Outsourcing is not an entirely new concept in commercial real estate. What is new is a shift in the focus of corporate real estate outsourcing. In the past, it was primarily the property owners that outsourced portions, or all parts of the real estate process, to property managers, asset managers, and leasing agents. Currently, the trend is for corporate space users to outsource portions or all of their real estate and facilities to specialists and outsourced service providers.
Traditionally, commercial real estate brokerage companies emerged as an outsourced marketing capability for property owners and developers. Brokerage companies were formed to satisfy the needs of property owners to lease their vacant space. As such, the organization and motivation of real estate brokers evolved to satisfy the needs and goals of property owners, that is, maximizing their returns by negotiating the highest rents possible.
In the past few decades, corporate space users have become a new focus for the commercial real estate industry. Moreover, some traditional brokers have evolved into exclusive tenant representative agencies. Typically, such evolutions have failed to align properly with the needs and objectives of corporate space users. This is because most brokers, even the tenant representation firms, continue to focus on the specific goal...