Changing Real Estate Consulting From the Inside Out

A conversation with Jeff Zell, president and chairman of real estate consultants JM Zell Partners.
By Alice Bumgarner
When he founded JM Zell Partners in 1989, Jeff Zell crafted an innovative, new business model for real estate consulting. Today his multi-disciplinary team of experts address clients' needs in a way that's different from nearly all his competitors.

In-house land planners, legal counsel, space planners, marketers, and financial experts bring their own analysis and questions to each transaction to weave comprehensive solutions. His is a two-way innovation – both in the product itself and in the payment structure. JM Zell's list of clients includes the Shakespeare Theatre Company, Time Life, National Gallery of Art, and sanofi-aventis.

Alice Bumgarner (AB): How is the role of innovation reflected at your workplace?

Jeff ZellJeff Zell: Our innovation was to make a product that provided more. As real-estate consultants, we do everything from acquisition of a space to buildout to financing to marketing to selling or leasing.

When I was a broker years ago in the commercial real estate world, I saw that the client was asking for a lot more upfront analysis than they were getting. They needed construction knowledge, financing expertise, someone who understood their business – they needed the whole package.

What we at JM Zell ask are questions like, "Why do you need the space?" and "How does it work for your business?" before we even look at space. So what we're doing is understanding the client's needs first, telling them what they need to execute, then going to market. We put together a whole plan. The competition does a commodity deal; they're only paid after the transaction is finished. We're not a commodity player. We're paid based on the scope of work. We're a business consultant first.


Jeff Zell: My most difficult problem was getting people to pay on a scope basis for something that our competitors were giving for free. That's an even harder story to tell during a recession. When we were first starting the business during the last recession, in 1989 and 1990, it was quite a tough sale. What we had to do was tell clients we wouldn't bill them for a four- to six-month period. We had to prove our value. Even today, I say, "If you don't get 10 times what you pay me, then I haven't done my job." Most clients would agree the multiplier is even higher.

AB: What is the most exciting innovation you've been involved in developing?

Jeff Zell: What gets me excited is finding someone who needs space, trying to understand the business culture they want to create, then building the model from the inside out. We use computer modeling, flow patterns, walkway patterns and the organization chart to create a building. We look at everything from the group dynamics to the heat, air, light and connectivity requirements. Those are things that were never done in the past. At the end of the day, that property will function better for the organization than a generic building.


Jeff Zell: We'll start using new online software in January that lets us, our clients and our contractors engage on a unified platform, so we can all see where we are and what we need to move forward. It's like an ongoing virtual meeting, where we can ask questions in real time.

We used to have construction meetings every week or two. Sometimes you'd wait for a meeting in order to ask a question, then wait another couple of days for the person to find an answer. Suddenly you've lost 10 days. This way, you save time on those thousands of decisions you make during the process, just by being able to ask and respond to questions quickly.


Jeff Zell: That's why I'm here. My job is to not get caught behind a barrier. I'm the guy you'd want to be in a foxhole with, because I'll get you out of there. The issue we run into is, how many of those can you do? We're an industry that's collapsing under duress. We have to think, Who can we help?


Jeff Zell: The biggest obstacle is when people think things are just peachy. One example? Car makers. They avoided change because things were going so well. They thought they didn't need to invest in people or technology. If you're not constantly evolving, your product may become obsolete.


Jeff Zell: I'm not familiar with The only similar network I deal with is Federal Reserve Board's Beige Book. It asks for collaboration from experts from different fields, then consolidates the information.


Jeff Zell: I'm a current events guy. I read three newspapers a day and three magazines a week. I'm constantly looking online as it relates to my industry.


Jeff Zell: There's a great word out there that everyone's using: transparency. When you work with a real-estate broker and you're not even sure how they put the deal together or what you're being billed for, there's no transparency. Ultimately, transparency is going to be key to any financial transaction done in the world. And if you're using online innovation and technology, you can provide that transparency.

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Posted by Jonas Smith on June 19, 2014