Does Size Matter?

Those of you who found this post by Googling ‘Does Size Matter?’ may be disappointed to find out I’m talking about the size of a commercial real estate firm. For everyone else, the answer to the question ‘Does Size Matter?’ depends entirely on the experience you’re looking for.

As I’ve discussed in previous posts, you should choose your representation based on the agent, not the company they work for. However, there are distinct differences between the service and experience you will receive from large and small firms, which are based inherently on how each are run.

So why would you choose to work with a smaller firm? Probably for the same reasons my friend Paul chooses Coffee Stop over Tim Horton’s.

Paul is 85 years old; he’s been retired for 20 years and every morning of his retirement has started with a coffee and donut at Coffee Stop. About 10 years ago, a brand new Tim Horton’s was built right down the street from Coffee Stop, but yet Paul still stayed loyal. I asked him why he didn’t switch to Tim Horton’s and he answered simply, ‘Coffee Stop gives me exactly what I’m looking for.’ For Paul, his trip is less about the coffee and more about the experience. The owner of Coffee Stop knows him by name and has his order ready when he arrives. The owner also knows what types of donuts Paul likes and offers him free samples when new flavours arrive. Paul and the owner discuss their kids, grandkids, and mutual love of sailing. The focus for the owner of Coffee Stop is on providing his customers with a quality experience. At Tim Horton’s, Paul is rushed through with little or no interaction; the goal for that business is quantity.

Depending on your objective, either Coffee Stop or Tim Horton’s can deliver what you need; for Paul, it’s all about an enjoyable experience, one only Coffee Stop can provide.

Commercial real estate works much the same way. Larger firms reward employees based on internal rankings,  offer exiguous (typically 50/50) commission splits and bonuses. This type of incentive program rewards those who perform the most deals, not the best. Conversely, smaller firms do not reward based on ranking and offer a 90/10 or 100% commission split; as a result, agents at smaller firms have more incentive to spend more time on each deal and provide a customized experience to clients.

Large vs. Small Firms

In Summary…

The question of whether or not the size of a commercial real estate firm matters depends on whether or not a customized experience matters to you. If it does, you may want to consider dealing with a smaller firm. While you’re there, drop by Coffee Stop – 10 years later, it’s still going strong.

Sign Up for our Newsletters

Be the first to receive commercial real estate updates, articles and videos.

We respect your privacy. Your information will not be shared with any third party.

Leave a Comment

Your email address will not be published. Required fields are marked *