Technological advancements in the process of buying and selling commercial properties are expected to drive the commercial real estate services market growth

Commercial Real Estate Services Procurement Intelligence

Commercial real estate services procurement has become the value generator for investors to navigate the evolving landscape and advanced technologies to provide agility and streamline processes. The global market is expected to grow at a CAGR of 5.1% from 2023 to 2030. However, population migration trends, hostile weather conditions and conflicts in Ukraine have posed challenges for real estate service providers. For instance, the rising inflation Fed interest rate and the post-pandemic situation have slowed down the commercial real estate sector across the globe. Meanwhile, with the normalization of COVID-19, companies plan to increase their physical presence. Besides, multifamily and industrial asset classes have augured well for market growth.

In 2023, the industrial segment of the commercial real estate category continued to exhibit bullishness. Increasing e-commerce sales and disruptions in the supply chain have bolstered the demand for warehouse and distribution space. According to the National Association of Realtors April 2023 report, the industrial vacancy rate was pegged at a low of 4.3%.

Additionally, the industrial rent growth rate remained robust, reaching 10.3%. Warehouses have experienced an impressive 11.7% growth in rental prices. Commercial real estate service providers are focusing on adopting technology to improve property management, smooth property dealing processes, and increase customer experience. Service providers are adopting technologies such as virtual reality (VR), augmented reality (AR), big data and analytics, and artificial intelligence to find their footing. Property buying and selling websites, real estate management software, virtual reality, drones and other tech devices, real estate crowdfunding platforms, and marketing automation are some of the recent trends that depict the technological adoption shaping procurement decisions.

Companies are acquiring small players to increase their market penetration and global reach. For instance,

• In December 2022, CBRE Group acquired H2M Sverige AB, a property management service company in Sweden. After the acquisition, H2M will operate as part of the CBRE Global Workplace Solutions (GWS) group, strengthening CBRE's presence in the country.

• In October 2022, BBG, a commercial real estate service firm, acquired VSI Appraisal Group in Columbus. With this acquisition, BBG has reportedly enhanced its presence in Columbus while adding affordable housing specialty to its portfolio of services.

Using drones to gather high-quality aerial images is a cutting-edge trend in the real estate industry. It offers a distinctive and influential viewpoint for property analysis. Drones are utilized across various real estate categories, such as apartments, residential homes, vacant land, resorts, and commercial properties. With advanced in-drone camera technology, these unmanned aerial devices can capture videos, images, multiple overhead map images, and even 360-degree panoramas. This comprehensive approach provides additional information and transparency to prospective clients.

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Commercial Real Estate Services Sourcing Intelligence Highlights

• Buyers in the commercial real estate market, such as businesses or investors, can exert significant bargaining power, particularly if there is a surplus of available properties. Buyers can negotiate favorable lease terms, request concessions, or shop around for alternative options. The level of buyer bargaining power depends on factors, including market conditions, demand and supply dynamics, and the availability of substitutes.

• Property management, common area management, utilities, security, and supply costs are some of the costs incurred in commercial real estate services.

• The average cost of appraising commercial buildings is USD 4,000, whereas big buildings may cost up to USD 15,000 or more.

• The market can be termed mature, with several active property owners and buyers. Maintaining long-term broker relationships is recommended to get better property deals.

Commercial Real Estate Services Procurement Intelligence Report Coverage

Grand View Research will cover the following aspects in the report:

• Market Intelligence along with emerging technology and regulatory landscape

• Market estimates and forecasts from 2022 to 2030

• Growth opportunities, trends, and driver analysis

• Supply chain analysis, supplier analysis with supplier ranking and positioning matrix, supplier’s recent developments

• Porter’s 5 forces

• Pricing and cost analysis, price trends, commodity price forecasting, cost structures, pricing model analysis, supply and demand analysis

• Engagement and operating models, KPI, and SLA elements

• LCC/BCC analysis and negotiation strategies

• Peer benchmarking and product analysis

• Market report in PDF, Excel, PPT, and online dashboard versions

Cost Intelligence Highlights

As part of the commercial real estate services procurement intelligence report, Grand View Research has identified the following key cost components:

• Property Development

• Management and Administration Cost

  • Tenant Relations Management

  • Vacancy Cost

  • Eviction Cost

  • Early Termination Cost

  • Owner Budgeting and Reporting

  • Financial Analysis and Transactions

• Common Area Management (CAM)

  • Capital Improvements

  • Structural Repairs

• Maintenance & Administration Staff

• Utilities

• Janitorial and Security

• Supply Cost

• Others

Property development, management & administration cost, and Common Area Management (CAM) form the largest cost components of commercial real estate services.

Commercial Real Estate Services - Key Suppliers

• CBRE

• Cushman & Wakefield

• Lee & Associates

• Savills

• Marcus & Millichap

• Colliers

• Avison Young

• Newmark Knight Frank

• TCN Worldwide

• RE/MAX, LLC