CBRE opens up Omnichannel Real Estate Practice

Industrial real estate firm CBRE recently announced it has opened its Omnichannel Real Estate practice, which is said is geared towards customers focused on effectively meshing their brick-and-mortar store portfolios with expanding real estate networks for e-commerce distribution and fulfillment. 

The firm noted that the need for this type of practice is on the rise, as retailers are increasingly focused on competing in what it called the “experience economy shaped by e-commerce” and, in turn, requires offering customers with quick and seamless access to online items along with store-based experiences.

A key impetus for the launch of this practice, according to CBRE, was to use it as a so-called clearninghouse to address myriad client objectives, with services ranging from planning supply chains and analyzing warehouse-labor availability to optimizing store portfolios and mining data to identify ideal sites for distribution centers and stores.

Overseeing and leading the Omnichannel Real Estate Practice are Adam Mullen, Senior Managing Director and Americas Leader of CBRE Industrial & Logistics, and Brandon Famous, CBRE Senior Managing Director of Retail Advisory & Transaction Services.

Both Mullen and Famous explained in an interview that there were various drivers for CBRE to open up this new practice.

“Both of CBRE’s Retail and Industrial & Logistics business lines have heard from retailers about the need for a single, accountable partner to help them manage the combined growth of their store networks with their e-commerce fulfillment networks,” said Mullen. “They want their own customer service to be seamless across online and in-store platforms, which means that retail real estate and logistics real estate now must be considered an interwoven whole rather than two distinct systems.”

Famous observed that this was something that was demanded by clients and also driven by customers, noting that it ties into the experience economy, which he said is a concept that has been around for at least 20 years and truly come into fruition in recent years.

“In the experience economy, consumers put a high value on compelling experiences tied to the goods and services they buy,” he said. “For a given retailer, that experience includes both flawless execution of an online orders and memorable in-store environments – because customers jump back and forth between the two channels instantly and constantly. To accomplish that level of seamless service, your real estate has to be perfect.”

CBRE has offered many of its advisory services for many years, but Mullen said it really has been in the past 18 months that its Retail and Industrial & Logistics business lines have worked together more often in response to clients’ requirements. As an example, he said its Industrial & Logistics division expanded its offering last year in Supply Chain Services, which advises retailers on designing and implementing their supply chain real estate.

“That’s important because the tiniest inefficiency in supply chain can be the difference between profitability and losing money in e-commerce,” he said.

And Famous added that CBRE has added services on the retail side that apply to both stores and distribution centers.

This has been done by increasing its project-management capabilities for advising on the design and construction of DCs, shopping centers and standalone stores, coupled with using location analytics, which he said involves analyzing multiple data streams to assess specific real estate – to pinpoint ideal store sites, which is now being expanded into industrial real estate.

From a services perspective, along with using location analytics to make data-based decisions on real estate locations, Mullen said the practice will also enlist CBRE’s Supply Chain expertise for assignments such as helping retailers to determine how many distribution centers and fulfillment centers to operate, where to put them and which part of their business each facility should support. And he said it can also enlist site-selection, capital markets, transaction management and other services.

“Think of this Omnichannel Real Estate practice as an elite hotel concierge,” noted Famous. “Retailers have many needs in this rapidly changing industry. This practice tackles those needs – no matter how intricate - by determining which of CBRE’s broad spectrum of real-estate services to apply as part of a customized solution. Omnichannel networks are so complex that a resourceful, attentive concierge is needed to quickly assemble the right combination of CBRE expertise for each retailer, regardless of where in the CBRE universe those services originate.”

With omnichannel being a multidisciplinary practice, Famous said that more than 200 of its professionals, advisory experts and executive leaders are coordinating this practice for its retailer and retail-landlord clients. Omnichannel teams can be assembled based on client needs for real estate anywhere in the Americas, Asia, Europe and the Middle East. And depending on the exact expertise needed by a given client, he said CBRE can draw it from among CBRE’s thousands of real-estate experts across the globe.

Looking ahead, Mullen said that CBRE expects that this practice will evolve and grow apace with the omnichannel industry.

“That sounds simplistic, but it’s accurate,” he said. “If the industry evolves to need a specific, new service, we’ll adapt by either developing that service internally or adding it through acquisition. The aim with omnichannel expertise is to stay nimble, to adapt quickly to changing consumer expectations for services like one-hour delivery and to move on from strategies that become outdated. It’s quite safe to predict that omnichannel requirements will grow because e-commerce, in particular, and consumer activity in general aren’t receding any time soon.”