Updated: September 5, 2013
Industry Intelligence from First Research, a division of Hoover's (a D&B company)
Residential Real Estate Brokerage & Management
Changes in Insurance Policies - Insurance policies have changed dramatically for the industry in recent years. An increase in awareness about indoor air quality (IAQ) has resulted in increased litigation potential, and overall premium increases have forced some companies to cut costs by increasing deductible amounts, which ultimately exposes them to higher uninsured losses if an unplanned event should occur. Since the terrorist attacks of September 11, 2001, companies have been forced to take out separate policies to insure against such events, as these generally are no longer covered under traditional insurance vehicles.
Consolidation - The big property management companies have become much bigger in recent years. Buying, selling, and leasing residential property generates brokerage commissions of about $40 billion per year. AIMCO, a leading apartment owner and manager, built a portfolio of over 500 properties largely from buyouts of midsized companies.
Banks Involved in Real Estate - Large national banks, the National Association of Realtors (NAR), and the federal government have been focused on the question of whether to allow banks to engage directly in real estate transactions. Since 2005, rule changes have allowed some national banks to participate in limited real estate transactions in the commercial sector. However, NAR and others fear that any expansion in banks' real estate activities could eventually spill over into brokerage and management in the residential sector as well.
Commercial Real Estate Brokerage & Management
Rapid Growth of Residential Property Management - Jobs in property management grew 30 percent from 2002 through 2011, far faster than jobs in private industry as a whole. Demand for services has grown partly due to strong demand in the apartment and condo sector. The rise in home prices and strict credit standards have made renting apartments and condos a more affordable alternative for consumers.
Uneven Demand for Office Space - Weakening of the US financial sector and business services in the late 2000s slowed construction of office space, when jobs fell over 7 percent in financial services and 5 percent in business services. Weaker demand for space lowered office rental rates in 2009. However, demand for office space rebounded as the economy improved. Corporate occupiers in some locations continue to consolidate and cut costs. But demand for prime office space is growing in markets where the technology and energy sectors thrive.
Corporations Lease More Real Estate - As with other types of services they outsource, US corporations own and operate less of their own real estate than they used to. Office space, warehouses, and even manufacturing facilities, are more likely to be leased through brokers and agents. Real estate in recent years has made up about one-third of corporate assets, compared to more than half of assets in the previous decade.