Saturday, May 14, 2011
WeinPlus Chief Executive Says Three Big Trends Changing Commercial Real Estate Strategies and Development Plans in Florida
“Commercial real estate companies and commercial property owners are reforming their business models and their compensation structures to more closely match their focus on income and profits,” Wein explained.
Wein foresees major changes in the way commercial leasing agents are compensated.
Retail leasing compensation based on a portion of rental revenue instead of the dollar-per-square-foot model is gaining popularity among commercial real estate owners. In the past this strategy was primarily only used on the brokerage side of the business, Wein said.
In the new model, incremental increases in leasing revenue, increases the agent’s commission. Typically, the dollar-per-square-foot model compensates agents the same regardless of lease duration or rental rates, Wein said.
In the office sector, companies are reducing their operating expenses to reflect realities in the work place.
“This frequency includes flex-time and work-from-home days,” Wein explained, and it means more companies are looking at “hoteling” their employees’ office space. “If a company doesn’t have all of their employees in the office at a time, they don’t want to pay for the additional space.” Wein said.
Coupled with another emerging strategy — temporary specialists hired on a project basis — the strategy means smaller or more flexible office leases and fewer private offices coupled with a new demand for executive office space associated with these specialists, Wein said.
Additionally, multi-family properties are seeing a significant change in how people live, Wein added.