Colliers International
Gil Borok, CEO and president of Colliers' US business
- Gil Borok, the CEO and president of Colliers' US business, told Business Insider that tech has enabled, instead of disrupted, the commercial real estate business.
- He outlined Colliers' priorities in the US market in 2020. The company, the smallest of the Big Four commercial real estate brokerage and service firms, is looking to use that size as an advantage to grow its book of business.
- Borok also gave a rundown of the largest commercial real estate trends of the year, from flex-office to the rise of industrial.
- Read more BI Prime stories here.
Gil Borok became the CEO and president of Colliers' US business in December 2019, ascending to the position after two years as its COO.
Prior to his time at Colliers, he spent 15 years at one of the firms' largest competitors in the commercial services and brokerage business, CBRE. But he says that Colliers' relatively smaller size is an asset.
"Compared to CBRE, there's an entrepreneurial approach to what we do, and a lot of opportunity to grow a platform," Borok told Business Insider.
Borok said that those opportunities lie in the areas of recruiting or training more seasoned brokers, growing Colliers' occupier servicing business, and continuing to expand its capital markets business after last month's acquisition of four subsidiaries of the Dougherty Financial Group.
But one potential opportunity that he didn't highlight was technology, though Colliers has been dabbling in the buzzy real-estate tech space for a while now, with the firm running its PropTech Accelerator with Techstars twice since beginning in 2018.
While Borok sees tech continuing to play a major role in real estate, he doesn't think that it will truly disrupt the industry by replacing commercial brokers.
"No one is buying a million-square-foot tower online," he said. Instead, Borok said that tech will enable those that already work in the field.
Tech's place in commercial real estate
Borok said that, a decade ago, "the question was: is tech going to be a disruptor to the industry or not?"
He says that, up to now, tech hasn't disrupted real estate as a whole, even accounting for changes in the residential space, and instead has added ways for the incumbents to do more for their clients.
"To compete effectively and to add value to their clients and use their time efficiently, you need to have tech," Borok said.
He gave the ability to give electronic and mobile presentations, collect and analyze much larger amounts of data, and have functioning customer-relationship management (CRM) as some of the biggest examples of where this is true. He noted that CRM, by facilitating client relationships, is also an efficient way to provide data.
"We have data our clients don't have, that's our value," Borok said.
These technologies may seem incremental compared to the promised high-tech world of virtual reality, AI, and fully automated smart buildings, but in a slow-moving field like real estate, they can have an outsize impact.
"Technology is here to stay," Borok said. "It's an enabler, and we have to embrace it."
But for Borok, embracing it doesn't mean making a big bet on a technology in the hopes of an eventual payout.
"A winner, to me, is a product that we can embrace, help develop and bring to our clients to add value to them," Borok said.
Collier's competition is also actively investing in tech and integrating it into their business.
CBRE has run a PropTech Challenge competition since 2017 and announced its first-flexible workspace location for its Hana brand last year.
JLL has invested heavily in proptech through its JLL Spark fund, and last year announced the creation of JLL Technologies, which will bring JLL Spark's leaders to JLL's global executive board. Cushman and Wakefield has partnered with VCs like Fifth Wall and MetaProp to invest in proptech.
CRE in 2020
While technology may not have disrupted how commercial real estate brokerages operate, it's impact on other parts of the economy has influenced the kind of work that Colliers and its competitors focus on.
The rise of ecommerce has led to a renewed interest in industrial real estate near city centers, which Borok calls "the blending of retail and industrial." This has led industrial real estate prices to surge from their 2010 lows. Borok believes that developers, noticing this trend, will begin to develop more "last mile" industrial property to match surging demand.
And that could have a negative impact on brick-and-mortar retail, forcing retailers to either focus on experiences or leave their landlords to convert retail spaces into medical and office space.
Borok has also been watching tech companies expand their operations, and believes that Colliers can service a bigger proportion of that industry.
Flexible-office space, which often touts itself as a tech-enabled real estate business, is here to stay, according to Borok, as occupiers continue to want part of their portfolio to be flexible. He attributes at least some of this to coworking giant WeWork.
"There's an argument to be made that landlords can't or have not historically made the spaces as exciting as WeWork," Borok said. He noted that some of the big landlords in New York, like Tishman Speyer, are now creating their own flex-space.