That's the basic question being asked in a Wall Street Journal article yesterday. It's an interesting idea and one that has been asked many times before. In fact, the question has been asked for virtually every industry in the last 200 years.
I am a tenant rep in the Dallas area focused on Plano, Frisco, Richardson, Addison, and Far North Dallas. So it's important that you know that up front - full disclosure. I am a little biased.
Technology usually works best when applied to a series of repetitive tasks or the collection of data. It's great at increasing the speed at which milions of tasks can be completed. It's not always as good at the interpretation of the data, however, or how the data should be best applied to a given situation.
Let's take a look at an office lease. That is, a company looking and negotiating for lease space in an office building.
The occupancy costs for most companies is usually the 2nd highest expense on the P&L just behind all the payroll related costs. Leases average 5 years in length, but can range from 1 year to 10 years. Some go even longer. Unlike payroll which can change quickly as you hire and fire employees, office occupancy costs are a fixed cost at least for the term of the lease. So you are stuck with it even if you don't need it most of the time.
Leases include renewal options, termination options, lots of varieties of expansion options, and sometimes options to buy the building or a death or disability clause.
Leases usually address construction of the premises to some extent. I have negotiated a few leases where the tenant takes the space as-is, but most involve new carpet and paint at a minimum and occassionally the new construction of the entire building. Most of the time, construction will involve carpet, paint, moving walls, electrical, plumbing and HVAC.
Lease documents for office buildings are generally 30-60 pages long and can be much longer at times. They address issues that seem extremely unlikely and many things that seem obvious, but aren't. What happens if the building burns down or is destroyed by a tornado or other natural disaster? What happens if the state condemns the building to build a new road? Can the tenant sublease its space to another company if they don't need the space any more? Who pays taxes, insurance, maintenance, landscaping, and all the other expenses of running the property? Can I bring my dog to work? Can I wear white after Labor Day? Okay, I threw that last one in just to see if you were paying attention.
I could go on for much longer, but I think you get the point.
If tenant rep brokers were just collecting floor plans, quoting rental rates and arranging for property tours, we could easily be replaced and probably should be.
But the complexity of the transactions and the length of time it takes to search and negotiate (6-12 months on average) makes automating this process unfeasible. That doesn't mean that parts of the process can't be automated or that technology can't be used to a greater degree in the industry. I welcome that.
My clients look to me for advice, consultation, expertise, market knowledge, industry contacts, and referrals to all the services they will need (architects, contractors, attorneys, movers, insurance agents, telecommunications providers, furniture dealers, etc.).
By using my services, the company owner or top executive can stay focused on her business and making money instead of taking countless hours to manage a process that she would likely only do once every 5 years. I handle dozens of leases every year. My clients use me when they need me and don't have to have someone on staff to deal wtih it.
So for now, I think the answer is a resounding "NO". Tenant rep brokers won't be replaced by technology. But hopefully, they will become even more valuable because of it.