Companies primarily engaged in non-real estate, such as Facebook, Samsung and Apple, still have to make real estate decisions with respect to, among other things, the location of the business, the design of the business location, work or rental or purchase of space. They often rely on relationships with external service providers to help them manage their corporate real estate assets. These are relationships characterized by intangible services, information asymmetries between customer and service provider, limited rationality, and imperfect contracts. But what role does trust play in these outsourcing relationships? Julia Freybote, Assistant Professor at the Hollo School of Real Estate at Florida International University, is co-author of “Trust in corporate real estate management outsourcing Relationships”, published in the Real Estate Management Journal (2011). His research focused on two types of trust – self-serving or calculated trust based on the cost of operating clients and relational trust based on shared loyalty and responsibility – with data collected from US corporate property managers. . “My interest in the value of trust grew out of my experience working in commercial real estate consulting,” said Freybote. “As a consultant, I realized that whenever there was new work to be outsourced, the client company would frequently request quotes from a number of service providers, rather than keep sending us the new job directly. From my perspective, it seemed like the corporate client didn’t really trust their existing service providers and felt the need to shop around a bit.
While there is a growing body of scholarly literature on the concept of trust in business relationships, there is little research in the area of commercial real estate, and Freybote’s research is pioneering. His research found that the expertise of service providers and effective monitoring improved the level of computational confidence. In addition, perceived value, social interaction, communication, dependence on the service provider and effective monitoring increase the level of relational trust. The results suggest that service providers can gain the trust of their customers by communicating reliably and confidentially, establishing personal relationships with key personnel in the customer organization, and facilitating customer follow-up. Corporate real estate services, on the other hand, need to be aware that relationships built on trust always require effective monitoring systems. “Perhaps the most surprising finding is that increased monitoring, through tools such as performance measurement and contracts with clear deliverables, actually serves to increase the level of trust between client companies and suppliers. of services, ”said Freybote. “In these relationships, trust and effective follow-up are complements and not substitutes. “
For commercial real estate brokers, managers and other service providers who work with corporate real estate departments, the picture is clear: while market knowledge is essential to gaining a client’s trust, building relationships interpersonal relationships can lead to more stable and lasting relationships. Business customers place great importance on the proper handling of sensitive information and reliable communications.
Understanding the trends in how businesses use space and the challenges they face when it comes to real estate is part of the program of the Master of International Real Estate (MSIRE) program at Florida International University. “The FIU offers one of the few real estate master’s programs in the country to include a course focused on the end-user perspective,” Freybote said. “Gaining insight into business trends and issues related to the work environment, purchasing, performance measurement and benchmarking, and sustainability, among others, helps students to understanding what drives the real estate decisions of end users and, in turn, enables them to become better developers, investors and service providers.
The FIU MSIRE program is available in three formats: face-to-face, hybrid and fully online through FIU Online. Dr Julia Freybote teaches corporate real estate management in special real estate topics, and will also teach a new course, under development, Corporate Real Estate, which will be part of the MSIRE core curriculum. For more information visit fiuonline.com
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