This is in part because of the uncertain economy, one that has institutional investors looking to add real estate to their portfolios but struggling to find the same level of detailed information available for other investments, according to Asieh Mansour, head of research for the Americas at CBRE. She said that as real estate becomes more integrated into capital markets, clients are asking for better information. CBRE has a huge research team — 450 worldwide — and is trying to better pool data from many localities for clients considering international investments.
“Real estate has evolved and matured as an asset class, and most institutional and high net worth investors are allocating part of their portfolio to real estate,” Mansour said. “As they are having global mandates, the questions are going to be a little more cross-market.”
The rise of online data providers (such as CoStar Group and Reis) has also freed in-house researchers from routine data compilation and allowed them to play a larger role in helping clients predict how hiring trends, investment yields and even politics may affect their decisions. They are using tablet computers and global positioning tools to quickly turn their data into portable, client-worthy presentations.
Studley produces interactive Google Earth applications overlaid with statistics and analysis. CoStar says its iPad application, launched in August of last year, now has more than 10,000 users. “We have kind of taken advantage of third-party providers to spend less time doing the mundane process of culling and collecting data and doing more creative tasks that help support our brokers,” said Steven Coutts, senior vice president of research for Studley.
Research as a career choice
Researchers at Jones Lang LaSalle have dramatically advanced their role at the firm by providing analysis on top of data that is now available to nearly anyone with a broadband connection.
“Research in our industry [typically] is very commodity-like and never truly lives up to the expectations of clients,” said John Sikaitis, director of local markets research for the Americas at Jones Lang LaSalle. “It’s to regurgitate information — it’s essentially kind of reactive information. It’s essentially a back-of-the-office function.”
Since joining Jones Lang LaSalle in 2005, Sikaitis and his partner, Scott Homa, have gone about growing a team of researchers who don’t view their jobs as stepping stones to brokerage work. Sikaitis avoids hiring people from other real estate firms or who are looking to become brokers, instead looking for people who want to become experts on a subject and grow that expertise over a long period, much as researchers do in the financial services industry.
“It’s not odd for someone to be a research analyst at Goldman Sachs for 35 years … we want our researchers for Maryland or Virginia to be that same point of contact,” he said.
Colliers gave K.C. Conway similar stature after hiring him from the Federal Reserve in 2010. When executives from Dexus Property Group, Australia’s largest office owner, came to Colliers considering the sale of a 65-property U.S. industrial portfolio, brokers quickly brought Conway in to analyze the best course of action — not to provide basic vacancy and pricing information. The firm sold the portfolio to Blackstone Group for $770 million.
“I think research has evolved from less of a commodity to more of a value-add that can take the ingredients and put them together,” Conway said.