Terabitz Blog

Rethink your real estate space. Office Case study: Intero Andare

Tough times call for critical thinking.

Real estate broker – if you are dedicated to the brick-and-mortar brokerage office, but seek to change it up either to reduce cost or create an environment that infuses a spirit of change for customers and agents, you are not alone.

 Brokerage office case study: Intero Andare

Silicon Valley California: In the popular, high-end retail / residential development known as Santana Row, you'll find Intero's flagship Andare office. This 3,000-square-foot space is a minimalist hub of modern style and consumer traffic. Gone are the catacomb of cubicles, replaced by communal areas with rich leather sofas and chairs, cafe tables and a large central work console equipped with a power and data conduit from the ceiling.

The front receptionist's desk has been replaced with a retail-display-quality glass window, where Intero features resort properties and high-end homes from development partners broadcast on high-definition flat-screen TVs.

For developers, this serves as a localized space where they can create awareness of upcoming projects.

For agents, this modern space sparks a discernible energy that turns it from vanilla office into a hub of positive activity. Now it’s a convenient place to meet clients who are out shopping in the area already, check email and go over contracts (which are conveniently and securely stored online).

Agents plug into Web-based transaction management software enabling them to manage entire client files online, eliminating the need for paper and storage -- hence the absence of copy machines, printers and the lasso of leases that hogtie their P&L.

For consumers, the Andare office emits an air of difference offering a beckoning invitation to come in and see what's on the market while enjoying a cup of coffee, high-speed Wi-Fi, or meet with their agent to sign a contract. All without the threatening scent of sales.

For Intero brokers, all this traffic, interest and excitement came with a price. A reduced price. 70 percent less to be precise compared to Intero's larger 7,000 – 11,000-square-foot offices, which have been part of the Bay Area landscape and part of the company’s brand identity. Andare was more than an experiment. It was a bold move during a year when most of their local competition buckled down, stopped spending and cut, cut, cut everything without replacing with anything new, different or better.

It was a move that sent a loud and clear message to their agents that evoked the type of leadership that makes them want to participate and do what they can to support.

It was a move that sent a renewed message to the public that real estate is not mom and pop, backward and dated but instead, concerned about enhancing the experience of anyone with even a remote interest in houses. 

Still convinced your old brokerage office is getting the job done?

Part 1 of this article, Fashion Trends for real estate challenged the notion of office space for brokers, agents and consumers. In it I suggested replacing the terrestrial office altogether for a virtual one as the most cost-effective and absolutely doable approach in today's networked world. But for those brokers who are still convinced they need office and seeking alternatives, Intero Andare stands as a beacon.

While I herald the merits the virtual world offers brokers, office space can make sense today and find itself home on Main Street creating brand awareness and brand experience for the consumer and a magnet for career minded agents searching for a progressive place to work.

And as I have learned from Intero, all of this can be acquired for price that is too good to pass up.

If you’ve ever dreamed of cutting cost and removing that large retail monkey from your back but never thought it possible to fit your organization inside a few thousand square feet, think again. 

Lose the cubicles. Lose reception. Go completely wireless. Invite the public to use your machines and access your information. Give the agents couches to work on, coffee to sip and place this in the center of town. Then sit back and watch what happens.

Andare is an idea come to life. An experiment with a remarkable yield. For Intero, just the beginning.

Ash

 

Fashion trends for brick and mortar

To say that real estate is in a state of deep reinvention is like saying the market is bad. We all know it. We're all looking for ways to start over and build anew.

Yet, when I suggested in a previous guest article (see "Brokers, change your ways [2]") the notion that brokers should rethink their real estate office space and get rid of it to cut costs, many protested.

Some said we need space to show that we operate a professional business.

I say, if you're looking at space as a sign of professionalism to your consumers it's really time to rethink what the word "professional" means, and how that might be illustrated today -- especially within the context of what a real estate office is and should be going forward.

Space, a final frontier

If you believe in a consumer-centric business model rather than or in conjunction with an agent-centric model, then the question remains: Do consumers need four walls in order to be convinced that a brokerage is a legitimate operation, and do agents need space or order to feel professional?

We learned from the exhaustive surveys performed by both the National Association of Realtors and California Association of Realtors that consumers judge agents based on whether they meet their service needs or not, rather than where agents spend their day. This much is crystal clear as indicated by survey respondents' expectations for quick responses from agents.

Possessing a cubicle, on the other hand, rarely if ever shows up as an indicator of professionalism or a customer need.

So where does space enhance the experience for both parties? We know that a cool, clean, unencumbered space -- conveniently located and designed to optimize your services, extend your brand position and build a culture -- is critical to any organization.

But the old model -- that catacomb-of-cubicles-that-barely-sees-human-life space; the maze-of-PCs-printers-phones-and-fax-machines space; the back-office-conference-room space; the uninviting-waiting-area-toward-the-front-door-with-a-couple-of-chairs-for-visitors space -- is for the most part expensive, useless and enhances little for your agents and the consumer.

Turning space into a great place

Let's look at how a consumer-centric broker might approach space for their real estate office today. For that preview, I offer you a look at one of the world's brand geniuses: Apple Computer.

Apple did not start out with retail stores in every major city, but it has them now. Why? Because its executive team thought about what a consumer would need in a retail space. More than just a cash register where you purchase your Mac, iPhone or iPod and then leave until next time, Apple stores indeed have become consumer-centric hangouts.

From the Genius Bar, where you can take your laptop to be examined or get help with a particular problem, to the simple treat of being able to stop in and check e-mail on a glorious new machine, to the space dedicated to teaching users about new Mac applications -- these stores are packed daily.

Yes, real estate is to computers what apples are to oranges, but your customers are the very same people and I can’t imagine them not being intrigued by real estate providing a very similar type of experience.

By building consumer-centric stores, Apple took whatever brand experience they had to levels unheralded in retail. I believe this model translates well for real estate brokers who constantly struggle for meaning in their brands, loyalty among consumers, and their agents as well.

Transformation

If you're looking to cut costs, think about the possibilities. Either keep the large museums filled with old machines and empty spaces that draw little interest and hardly leverage the treasure inside, or build and occupy sleek destinations that offer insight, hands-on touch, a "genius bar" of local agents who waft interest into the street.

Bricks and mortar for real estate need not be cold and boring. Dismantle the cubicles. Install a free wireless network and a corner of computers where people can come in and surf the Web for new real estate listings. Add couches where consumers can feel relaxed while discussing the type of home, neighborhood and future they want to build for their families. Turn your place into a living room rather than the clinic so many offices look like today.

Brokers, change your ways

Quit what doesn't work and start reinventing things that do.

Seth Godin covers this practice extensively in his book, "The Dip," and nowhere can it be more appropriately applied than to today's brokerage model, which is running full steam on yesterday's expense engine. Brokers are struggling to stay on top of their business, as the cost of maintaining failing operations add insult to the injury of the declining economy and stagnant housing market. Many brokers are in need of a new direction to help them through the remainder of this housing recession.

To do this, they need to let go of old habits, processes and the apron strings of traditional models that continue to cut into revenue and that no longer make sense. Here are the six things brokers need to let go of today:

People. Reducing headcount is the most difficult thing for us all to do but is also the most logical place to start. It's heart-wrenching and personal and it never gets easy. Unfortunately, however, it needs to be done and the sooner the better. Begin with the folks and/or departments that are not performing. Trust that their lack of production is not only affecting the firm, it's affecting others inside the firm that are producing. When you take this sort of action, the signals you send across all channels will, in fact, energize the entire organization. Next, remove those parts of the organization that are not necessary to your core business. If it isn't core, you might very well be able to reduce its cost by outsourcing. This is particularly true of administration, internal support, information technology, accounting and other such groups. Become better organized and leverage technology and you won't miss the "luxuries" of support staff to which you have grown accustomed. Start now.

Expensive Applications. Another by-product of the boom are clunky brokerage applications that can be easily swapped for freeware that works as well if not better than what your vendor custom-built for you years ago. From mail servers to comparative market analysis (CMA) tools and lead management, alternatives are now available that did not exist a year ago that are sleek, easily programmed and simple-to-use and can replace a host of aging functionality. Brokers, think of replacing your e-mail system with Google or Yahoo mail. Think of replacing your contact management system and calendaring with ones available for FREE. When you have a system that you get only 3 percent use out of, is this worth the cost?

Web sites. Is your Web site designed to be consumer friendly? Does it offer the tools and information that a CONSUMER requires? If not, throw away that old Web site and replace it with a new one that does. Your site should attract and engage customers while allowing you to capture business. Remember that your office on Main Street has been replaced with the one on the Web.

Advertising. I know some sellers still expect print ads to advertise their homes, as do agents. But how much longer can brokers continue to feed these fantasies? And so what if you've advertised on search engines for the last five years. Are these efforts returning value that pencils out at the end of the day? Too much of brokers' money is being wasted on the wrong ad buys and destinations that no longer provide the best visibility and return on investment. And even more money is wasted on the ads themselves, replete with bad copy and missing the key triggers that will incite a quality call-to-action. Brokers, start tracking your Web ads. Measure every penny spent. Scrutinize the ad copy. And quit everything that no longer works.

Desk fees. Granted, this is how some brokers make money and yet even the term seems so antiquated as the need for a desk -- let alone many of the things that come with it -- are of no use to agents today. Analyze the tools you are supplying your agents and how often they are used (if at all), then compare that to what you could be offering them that applies to today's business. You may find that many of your agents are already paying outside vendors for things you could be providing, such as Web sites, blogs and listing syndication, among tools and services. Study your own agents, find out what they need to operate efficiently, and match these needs to the most basic functionality they crave. You will find that in many cases you are overpaying for technology that is not even being used.

Physical space. Today, it is possible to run an entire company virtually. Agents don't need office space. Accounting departments don't need office space. IT people don't need office space. In fact, brokers don't necessarily even need in-house accounting or IT staff since all of these services and more can be outsourced. Between task-flow software, cloud computing, digital paper and e-signature, and working from home, most medium-sized companies can go completely virtual and most very large firms can scale down immensely. Seek out a $500 lease on office space for meetings, and relegate your agents to work from Starbucks and the host of public destinations where free Wi-Fi exists. Let's face it: As walk-in traffic has waned, agents need to be as public and available as they can.

We are in an incredible time of transition in the real estate industry. Brokers are continuously rethinking costs, investments and processes, and considering options to cut costs and improve efficiency.

Why you should fire your IT department

Most real estate brokerages didn't have IT departments before the '90s. Then the age of computers and Web sites came. Now every office in the country has a costly department that keeps Web sites running, listing feeds live and mail servers breathing.

The reality is the smartest business decision a broker can make today is to cut loose their IT department. In the age of outsourcing, this is perhaps the easiest thing for brokers to let go while enjoying a significant cut to operating costs.

Coming from a person with a heavy technology background, you're probably wondering why I would advise dumping your tech employees. It's simple: IT departments just aren't needed to the degree that many brokers now have them. Brokerages are sales businesses, and should be run as such. Brokers really have no business operating huge mail servers, tethering agents – who aren't even employees – to their in-house legacies. They certainly have no business building customized technology platforms.

From an agent's perspective, it doesn't make sense to get wound into a broker's system, only to have to deal with prying out your contacts and mail when it's time to move on. After all, agents are independent contractors. Why should they be tethered to a broker's mail server like this? It's a waste of money.

Many small businesses today are following the mobile computing trend, setting up company email using the Google Gmail platform, utilizing online document storage and other Web-based applications from Google Amazon and others. There's no reason brokerages can't do this too.

The most underutilized person in a real estate office is the office manager. Brokers looking for ways to streamline costs and processes should pay close attention to their managers and how they spend their time. A good office manager could easily oversee the processes currently owned by IT staff.

It's time for brokers to return focus to running their office as a business, not a technology center. Most of younger agents coming into the business these days will be quite comfortable with this arrangement and you’ll restore some sensibility to your P&L.

Let's get back to the business of real estate, not the business of technology.