Advantages of the big guys (CBRE, Cushman Wakefield, REIT's) over the little guys
Hey guys,

I'm curious to know what advantages the big RE players have over the little guys when it comes to the analysis of RE.  Is it just databases of information, and old-school analysis of the numbers based on all the relevant factors to the locale.  I assume they have armies of analysts scouring the listings too.  But I'm wondering if there specific softwares or technology that are used as well?  Just curious, thinking about working for a CBRE or Cushman, but wanted to know what / if any innovations are being pursued, or if there are actually any true advantages in working in those places.  OR are they actually just big ol' dinosaurs that gobble up as much expensive land as possible?

EDIT: I'm mixing big brokers, big developers, and big REIT's, and big RE investors all into the same bucket.  obviously, they all have different functional roles, but I'll just call them the behemoths of the RE Industry.
[{"id": "gr6hdpz", "text": "I think you may not be understanding their role. The big shops like CBRE, JLL, etc are brokerages, property managers, and capital markets guys. They don\u2019t typically own property. They work with clients that own / invest in commercial real estate.", "replies": [{"id": "gr6jrwu", "text": "This", "replies": [], "depth": 2}, {"id": "gr6o5qv", "text": "OP should be looking into REITs... AKA the clients of CBRE, Cushman, etc... \n\nBlackstone for example, they handle government bonds. I think actually understanding the scope and magnitude of institutional investors takes lots of reading or work within the field.\n\nInstitutional investors have a variety of different advantages, they play different roles, they have different criteria. The sophistication is actually difficult to grasp.\n\nThey are definitely not dinosaurs. But their most important tool is still probably excel. Understanding finance and the movement of capital, and access to that capital, is everything.", "replies": [{"id": "gr6po8s", "text": "I work in commercial real estate finance and have for some time. I am still learning the different roles that the same institutions play vis a vis core funds, value add funds, mezz finance, etc. I have yet to find anyone on the totem pole who can rightly explain how all the capital is deployed. Just some good summaries from Green Street and their ilk to really highlight up and down the capital stack", "replies": [{"id": "gr6qrlx", "text": "Ppl have no idea how much of our lives are controlled by the financial systems nobody understands. It's so complex.\n\nHousing shortage right now, guess what, blackstone re-enters the single family home market in sept. 2020 with a goal to purchase 80,000 homes. There are 70,000 listings in LA County every years. They aren't building new homes, but competing with us to buy existing homes. Where do they get their money? Our government gives them our money to reinvest. \n\nThey just bought out extended stay for $6B, a 10-15% premium on their stock price? They are in my niche industry with various vehicles buying 25% of every assett that hit the market this year.\n\nThe system is literally massive. So much money out there moving around and only a small percentage understand the complexity.\n\n&amp;#x200B;\n\nI don't know shit either. Just what I see on comps and CRE articles.", "replies": [{"id": "gr75oqh", "text": "fascinating...love hearing about massive systemic problems that slip right under everyone's noses.", "replies": [], "depth": 5}, {"id": "gr7hspw", "text": "It\u2019s not really fair to label it as our government gives them the money (in a small number of fringe cases, yes). The limited partner investors in their funds are pretty well advertised: mostly your traditional LP\u2019s, and to fill in the gaps the placement agents that form the capital for their vehicles also have pretty transparent websites. It\u2019s just not outwardly advertised. Mostly pension funds, insurance funds, endowments, etc. The key being institutions that have return requirements to fund their commitments (operations or member distributions or in the case of insurance, their profitability). The real estate part is usually a small piece of overall portfolio construction because of low beta to the overall market (you can also look up the traditional framework of portfolio theory on google that will cover 90% of this - Yale university is probably on the bleeding edge of this and outside the norm, and widely published how they approach things). The return requirements drive the types of real estate plays they expose themselves to (which is determined at the LP board level) and then they just bet on the horses they favor (the investors themselves, like Blackstone and Starwood in the case of extended stay). \n\nI just went through a deep dive with the guy who led the last buy out with them and it\u2019s a pretty clear case they do the research, have an idea on growth and/or operation improvement/cost reduction and then bet in a big way. \n\nThe improvement in profitability (in non distressed times) is usually marginal but in such big numbers it seems dramatic and with leverage the IRRs are usually ok. These guys rarely hit it out of the park, they just put in the work to consistently make it to second base with each at-bat and provide that service to investors that have to put a lot of money to work. \n\nTbh it seems complex but when you dive in it\u2019s not as much, just a bunch of moving parts.\n\nSource: I work in this business.", "replies": [{"id": "gr899of", "text": "You\u2019re right. I\u2019m just a salty hater because they\u2019ve been hedging against office/retail due to covid and have completely taken over our sector, have no idea how they make anything pencil. (I\u2019m an acquisitions guy). We essentially do the same thing in terms of raising funds on a much smaller scale.", "replies": [{"id": "gr8pp0a", "text": "Tbh, me too. Get a few beers in a BREP guy and it\u2019ll come out what they\u2019re penciling is to get past IC and not to truly deliver bc this vintage is probably pretty fucked anyway", "replies": [], "depth": 7}], "depth": 6}, {"id": "grahdvy", "text": "&gt;Thanks - yes I get this sense when speaking with folks that work with bigger developers that things are pursued based on what is conservative/safe/least risky case.  If all goes well with a deal they will get a reasonable and acceptable IRR.  But you always hope for the IRR to outperform with increasing value, it's just not guaranteed. (I don't know how to say this better....)", "replies": [{"id": "grahv1i", "text": "\ud83d\udc4d\ud83c\udffd", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "gr6q1bc", "text": "thanks, will do.  very interested how these behemoths get down to the local scale of making developments happen that make business sense.  Obviously, it takes a whole lot of people, divided into many teams.  But it's different that say, companies that produce products or consumables in the sense that in Real Estate the end product is quite difficult to build and usually custom tailored to its specific set of circumstances.  Every development is it's own business - so yeah, as you said, scope and magnitude seems just baffling.  It seems like there would actually be a market advantage to being smaller and local than being bigger and national....yet huge national development companies still exist.  Perhaps it's just the nature of business practices to consolidate the many into one, and why not RE companies as well...", "replies": [{"id": "gr6rpwy", "text": "If you\u2019re still interested in brokers, know that each global firm maintains a pretty independent local office to service that region. Brokers are very entrepreneurial and the ones who work for a big firm like JLL benefit from the overall platform\u2019s scale and shared services. It\u2019s still on each location team to source clients and deals. \n\nAs u/MidnightRaspberries else here said, best to find a good mentor wherever you are as it is very much an apprentice type industry no matter what role you work in.", "replies": [], "depth": 4}, {"id": "grbe7nw", "text": "The value of scale for a large developer is in raising capital. Every development need to raise a ton of outside capital. It\u2019s a lot easier to raise capital for a bunch of projects if you are a well known company. \n\nMost developers will have small local offices too. They aren\u2019t running the developments out of their HQ, they have offices in every market they work in.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "gr7mc3t", "text": "What are you talking about? CBRE Global Investors owns like $100B of RE... they\u2019re one of the largest institutional owners.", "replies": [{"id": "gr7oa1o", "text": "Good point. They are large and similar to LaSalle Investment Mgmt. But I think the way OP wrote this he or she was mixing up the relationship between brokers and owners / investors. I was responding to that without trying to parse up nuance too much. You make a valid point and I\u2019m glad you pointed it out.", "replies": [], "depth": 3}, {"id": "grbdsfj", "text": "When people say just \u201cCBRE\u201d they are just referring to the brokerage, if they mean CBRE GI they will say it. They are run completely separately.", "replies": [{"id": "grbtou9", "text": "That\u2019s not true. I don\u2019t and neither does anyone at my institution, including people who used to work there. In fact we usually just say \u201cCB\u201d\n\nEveryone in commercial RE knows they own assets and operate funds.", "replies": [], "depth": 4}], "depth": 3}, {"id": "h0rc887", "text": "CBRE Global Investors is an independently owned affiliate of CBRE Group, Inc. They are completely removed from CB\u2019s brokerage arm and are technically an entirely different company", "replies": [{"id": "h0zzjwz", "text": "You\u2019re a moron. It\u2019s all under the same umbrella. That\u2019s like saying a banks tellers work for a totally different company than its investment bankers. It\u2019s all the same shit. Just subsidiaries. Stop trying to sound smarter than you are and just listen - you might learn a thing or two. \n\nhttps://www.cbre.us/real-estate-services/directory", "replies": [{"id": "h15pjvz", "text": "Of course it all rolls up to CBRE Global, but it is an entirely different entity than the brokerage arm and has its own c-suite and corporate governance. Also it doesn\u2019t \u201cown $100bns\u201d of RE like you said. It simply sponsors funds as a GP on behalf of institutional investors who actually invest and have the ownership %s in the properties.\n\nIf you kept reading like you said asshole- \n\nCBRE Global Investors is an independently operated affiliate of CBRE Group, Inc. (NYSE:CBRE). It harnesses the research, investment sourcing and other resources of the world\u2019s largest commercial real estate services and investment firm (based on 2018 revenue) for the benefit of its investors. CBRE Group, Inc. has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "gr8jw72", "text": "Yes this. And working at a big shop will give you great training, learn lots of industry knowledge, expose you to many different deal structures, and get you into circulation with all of the relevant counter-parties in your area/market.\n\nEven if you do it for a year or two, you will get a good overview of the commercial RE business and you can leverage that knowledge and connections the rest of your career.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gr6hvx2", "text": "Access to national retailers and bigger deals happens more at the larger companies. \n\n&amp;#x200B;\n\nBut many more hands in pot that need to be paid by those bigger deals.", "replies": [], "depth": 1}, {"id": "gr6ig5v", "text": "If you\u2019re learning I\u2019d say it\u2019s more important who your mentor is, rather than focusing too much on just the company for now.", "replies": [], "depth": 1}, {"id": "gr6kfc2", "text": "Deal Volume and all the Information that comes with it.  Having timely market information gathered from their level of deal volume gives them an advantage.", "replies": [{"id": "gr6paub", "text": "You say \"timely market information\".  What type of information would that be? Obviously interest rates, employment, demographics, but what about local things like zoning changes - are there people in these national RE company's that are closely monitoring those developments at city level?  I guess alot of what I see is sorta copy-cat type work, one developer comes in buys a property does something that gets attention, and others follow, because (and I'm speculating) banks see it as a safe bet since it has precedent.", "replies": [{"id": "grbg4s7", "text": "Big thing is lease rates for completed leasing deals. For those, they\u2019re not public info, so internal lease deal market info is useful", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gr6khqv", "text": "It sounds like you're asking a few different questions.\n\n1) generally larger brokerages have analysts, and researchers, in addition to runners. There are more people as the larger deals allow for more overhead.\n\n2) there is technology; both internal and external (subscription) tools. Most brokers are not using listing books, flyer exchange events, and ledger sheets anymore. /s jk Many small/med size brokerages in a metro will focus on a smaller segment (physical or asset type) in that metro so they can have good internal data. As well as keeping up with market events that don't make the papers. This helps them do off listing deals and meet new clients.\n\n3) brokerages will *typically* only gobble things up on behalf of clients, but there are some successful brokers who are also asset owners. I've seen those in small and large shops.\n\nAdvantages? That just depends on your long term goals, your learning style, and your chosen area of operation (city, county etc).\n\nOr are you trying to not ask about what tech is used?\n\nJust a little confused", "replies": [{"id": "gr6oswf", "text": "Thanks this helps.  Yes, several questions in there.  I figure brokers are helping buy/sell properties for investors and so they are privy to some of the valuation decisions being made by their clients.  Ultimately, it sounds like the answer is, no, there really isn't some hidden advantage.  One thing I noticed when working in Southern California and hunting on Redfin every single day, is that it seemed like alot of real estate was sold off-market, which was really baffling to me.  Why would someone sell their property off-market and limit the number of buyers, who could potentially bid up the price further than a private sale?  the obvious thing would be selling to family members, which may have been the case, but I just don't know if that explains what I was seeing or if there was someone with a hidden advantage.  I'm not an agent, so maybe it was all just \"who you know\" - but I always thought it strange.", "replies": [{"id": "gr6pi22", "text": "Well.... I can't speak to residential. It's out if my area of expertise, and everytime I run a quick valuation on my house I fall into the WTF rabbit hole for 3 days.\n\nHowever, pocket listings and off market deals happen all the time in CRE.  One 'why' is relatively easy: less drama. \n\nDrama has a negative value. Why go through the work of all of the advertising and dead end possible buyers nad their crazy cousins who just got their license, when you can sell it to a known quantity for what everyone agrees is a fair price?\n\nI can only imagine the same happens with residential investment buyers, but again - not my bag of crazy.", "replies": [], "depth": 3}], "depth": 2}, {"id": "hylfbod", "text": "Hi, I know this post is old but I\u2019m curious about what you mean by \u201crunners\u201d (in contrast to analysts/researchers)?", "replies": [{"id": "hylghqk", "text": "In my area sone of the more popular brokers will work in teams.  The youngest &amp;/newest broker may be assigned a Runner position. They are sent out to look at potential new listings to chase or properties to possibly place na offer on prior to contact with the broker. What's the traffic like? Occupied? Neighbors? Squatters? Is it as pictured/advertised, or is the roof caving in now? Is the 'storage facility' really a repurposed barn? Generally, these are good chores for a new broker, and the industrial teams in my area sometimes call them Runners. (Also good for picking up paper plans for older clients, or whatever else)", "replies": [{"id": "hylhigz", "text": "Thanks for the fast response. This is for a \u201cField Research Analyst\u201d position at CBRE that I\u2019m considering applying to. It sounds like one of these \u201crunner\u201d roles you mention. Mind taking a look and letting me know what you think? Also, I assume being an analyst would be a much better position than runner, career-wise? Thank you.\n\n\u201cProvides research and analysis support of commercial real estate markets. The role will encompass certain regular tasks around the collection and analysis of core data, as well as a range of activities that contribute to and support the team's production and delivery of research material.\n\nAssists in the creation of both standard and bespoke point of sale Field Research outputs, usually under the supervision of SRA or Field Research Manager.\n\nLiaises with brokers, Sales Management and Marketing/BD on specific pitches and projects.\n\nResearches and collects market information regarding the commercial real estate market. \n\nGathers data on newly available properties, transactions, tenants, tenants in the market, and new developments.\n\nPerforms other duties as assigned.\u201d", "replies": [{"id": "hyljytg", "text": "Well... So this might be regional, but the CBRE researchers that I know are desk jobs. It's a common starting point for new brokers in CBRE to start in research and use that work as a way to familiarize themselves with the market and the CBRE way. This also exposes researchers and brokers to each other, and brokers will often fill new broker positions in their sales teams from Research. The runner job is team specific, where CBRE research is from a pool of researchers.\n\nI know it doesn't sound glorious, but CBRE is a good company and their research management is top notch. You'll learn national and local listing and research platforms, proprietary systems, real estate research fundamentals, and all sorts of good things.\n\nComparing a Runner, a CBRE research, an analyst position isn't fair to any of them. The goals and expectations are different. Runners a re young brokers attached to specific teams doing to low level stuff as way to start learning brokerage. CBRE is learning the fundimentals of CRE by starting with the data and getting to know different asset class representation within CBRE (all transferrable to most other brokerages). An Analyst position can vary wildly based on who you're working for. It's a catchall  for a while collection of possible task lists with requirements that are based on the needs of the employer. An analyst would not learn necessarily learn sales skills, where a runners research skills MAY not be as strong.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gr6ojuy", "text": "Get a mentor for 2-4 years then bounce and run a smaller shop. Better split and no big dawgs taking money out of your pockets", "replies": [], "depth": 1}, {"id": "gr6sxpc", "text": "Icyyachclub put it correctly, but I will answer a different question. If you are thinking about the advantages large buyers have it is really just in access to more advantageous financing, access to off market deals or deals so large they have few possible competitors. Some also have their own property management firms so they realize synergies there. \n\nThe best financing is in ABS. The largest buyers can securities their properties into a deal where they can get advanced 95% or better and at blended rates below 2%. Compare that to a basic investment loan right now of 80% or 85% LTV at 4% or 4.25% rate for 20 years.", "replies": [{"id": "gr8dyqd", "text": "&gt;ABS\n\nDo you mean CMBS?", "replies": [{"id": "gr8qcp8", "text": "Yes. CMBS is a type of ABS and I generally just say ABS to cover everything since I work with everything from CMBS to RMBS to esoteric ABS.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gr6t9qm", "text": "Database? Look at this guy. Everyone uses an excel dump from costar. The bigger shops may have a crm that some of the more tech savvy brokers use. My old company people were still sending faxes. From a fax machine, not a copier. Old school.", "replies": [{"id": "gr76kpk", "text": "excel dump from costar for the win!  thanks man.  I think I had read that on some other forum that costar interns just pester all the agents for their sales info.  Seems like a pretty inefficient way to gather data...", "replies": [], "depth": 2}], "depth": 1}, {"id": "gr7pwma", "text": "I worked in a small shop for about 2 years. One of the top retail firms in the region. I was an analyst doing just about everything from portfolio management to acquisitions. It\u2019s a good experience but you\u2019ll most likely hit a roof at some point unless you\u2019re under a really good team. I was interacting with CFO and COO on almost daily basis. Now the larger firms you simply see wayyy more deal flow. That\u2019s just how it is. But I found the raises we did were really intricate and neat.", "replies": [], "depth": 1}, {"id": "grbqsbz", "text": "We got invited to have lunch at a CBRE office about a year ago. Some of their research guys pulled up a proprietary software - a website which had an interactive map with a lot of lease information on it. Just a map of a city with a lot of deals on it which he could click on. Rent levels, lease lengths, tenant names, etc. He could filter for about anything. I don't know what the data quality was but I remember being impressed at the time.", "replies": [{"id": "gre3gkg", "text": "It was called metropolis when I was there. It was just a proprietary UI of Costar made specifically for CBRE. \n\nI could be wrong though, maybe the researchers had access to something that the brokers didn't. \n\nCould have also just been CompStak or a CBRE skinned version made by CompStak.", "replies": [], "depth": 2}, {"id": "gro4zuq", "text": "this is exactly the sort of thing I was wondering about.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gremngp", "text": "One of the best ways to get a start in the business is to work for a big broker. You\u2019ll see tons of data and make contacts with all sides of a transaction. I didn\u2019t come from this side but most good developers I know got their start as 1. Lawyer 2. Big broker 3. Engineer.", "replies": [], "depth": 1}, {"id": "grv0me9", "text": "I think the big guys always have an advantage from being able to get the first dibs on any new property on the makrket near say an upcoming big box or have access to local information. I'm a small time commercial investor, mainly strip centers here in Texas but looking to venture ouf of state but relying solely on google maps to checkout a property is not enough. I can't travel to all my short listed properties. Big guys have boots on the ground generally and have local knowledge.  I'm actually working on a portal/tool (I'm a programmer as well) to help small-time individual investors like me to help wth the basics atleast. In this golden age of information, individual investors shouldn't have to contend with left-overs.", "replies": [{"id": "gt25n1q", "text": "nice, wish I had programming experience to automate some of the research.  I find the \"first dibs\" thing really odd.  The idea that there is an underground market for real estate is bizarre to me.  I get the \"qualified\" buyer argument, however, I really believe market transparency will always garner the highest price and is in the best interest of the seller.  I just find it interesting.  I mean, maybe it's the owner's telling agents \"if you can sell it for this, I'll give you the sale, otherwise don't bother.\"  I don't understand it.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gs00rmo", "text": "I would say one of the biggest advantages is in house resources for property marketing content. A generally expensive and time consumer process is not made cheap and more effective than ever. Let us help you and I promise you will not regret it.", "replies": [], "depth": 1}, {"id": "gw60wle", "text": "I think the big advantage of any big company regardless of their industry, is an opportunity to invest in technology innovations and experimenting comparing to smaller firms due to the bigger budget. For example, they can invest into custom-built AI or virtual walk-throughs that can't afford a smaller brokerage.\n\nThey do not have to juggle multiple hats when a single person is responsible for the office management, business development, branding, analysis, and deal closing. All the roles are distributed so there is no need for complete multi-tasking. Of course, smaller firms also have their advantages over \"mass market\" ones. Usually, it results in more personal and caring attitude because such firms really nurture relationships and invest more time into their strengthening.", "replies": [], "depth": 1}]