Commercial real estate brokerage has long rewarded the most competitive among us – those who do whatever it takes to close deals while protecting all related information, as was the case with nuclear codes.
But is this long-established method of doing business really the best way? James Nelson, director and head of the Tri-State Investment Sales Group at global real estate firm Avison Young, has reason to believe otherwise. When he arrived at Avison Young five years ago, Nelson restructured the investment sales team to make it fully collaborative, including daily meetings where all deal information is freely shared and a commissions that reward each team member for each transaction.
“Working as a group is the best way to provide service to our customers,” said Nelson, who previously led similar teams at Cushman & Wakefield and Massey Knakal, and who led his Avison Young team to over $1 billion. dollars in sales since his arrival. the company in 2017. “We’ve built a unified sales team that covers all of New York City, instead of having 50 brokers who each have their own business portfolio and compete with each other. Building a team to serve the business has always been a big part of my personal success. »
The main aspects of the underlying theory are to suppress internal competition which Nelson believes ultimately hinders team efforts more than it inspires strong performance, to promote the sharing of valuable market information and to encourage and support young brokers.
“The traditional model is a steep pyramid where seniors grind down junior brokers without much training and only a few survive,” said Erik Edeen, principal and COO for tri-state investment sales at Avison Young. . “Add to that the fact that few college graduates can even afford this model, which takes two years to start making money. Our model is designed to attract talent for the future, including everyone, not just the select few who can build a career.
Nelson’s team meets every morning to share information on current deals and potential news. Working as a team, no information is compartmentalized. Everything is shared, on the theory that any information leading to a sale will benefit every member of the team.
“Most brokers have their own business books and work their own assignments, which means other people in the business probably aren’t aware of what they’re working on,” Nelson said. “We have a whole group that is aware of everything that is going on. We meet on it every morning, and we exchange ideas and information back and forth. Our teams are split by asset class, so we have a retail team, a multi-family team, and more. This allows us to find buyers who do not traditionally look at one type of asset. We have a wider reach when marketing properties.
The proof of concept here is in the results.
“The number of transactions that we do with basically two dozen people, if you looked at the sale per person in our group, I guess that’s a lot higher than in some of these big companies that might have 100 or 200 people, “Said Nelson. “We have a very effective group. If we can do 40 or 50 sales a year with two dozen people, that’s a very good result.
As a result, Avison Young customers continually reap the benefits of having an entire team at their disposal.
“Our relationship with James and his teams has led to over $100 million in disposals,” Ultimate Realty director Joe Sabbagh said shortly after Avison Young signed an agreement for Ultimate to sell 141 East 55th Street. “Ultimate was very impressed with Avison Young’s ability to identify a buyer and provide the certainty of closing required to meet our aggressive time constraints.”
“Avison Young’s tri-state investment sales team understood the complexity of this sale and were able to best advise our client to maximize proceeds,” said Treacy Gaffney, who worked with Avison. Young on the sale of 75 Warren Street. “Where two previous brokers failed, Avison Young identified a very wealthy buyer who was able to buy the company’s shares, which was much more advantageous than an outright sale for a fee.”
For brokers, the financial rewards of each transaction incentivize the entire team to view each sale as a win, resulting in greater team contribution throughout.
“The portion of each commission that is split into the pool mimics the drawdown loan you might find in a traditional system,” Edeen said. “But as our young people start adding value to transactions, they get execution bonuses on top of that amount rather than having to pay it back home. This helps alleviate financial anxiety and gives the short-term income boosts that people are drawn to brokerage for in the first place.
Nelson believes this way of working not only improves sales, but creates greater employee retention.
“The fact that when people arrive they are immediately connected to the system makes onboarding much easier, but it also improves retention,” Nelson said. “When you join our team, it’s not just, ‘Here’s a desk and a phone,’ and you’re competing against other people in the company. Here you’re really welcomed and you have access immediate to the transaction flow, which is very powerful.”
As Avison Young continues to build on its success, Edeen believes this way of working will continue to grow not just within Avison Young, but throughout commercial real estate.
“We believe the future lies in effective teamwork – the collective brain,” Edeen said. “As the commercial real estate industry moves towards a more efficient market and there is a consolidation of players, the fast-talking solo broker will be phased out. A thoughtful and consultative approach is the future.