CBRE

In nineteen seventy-three, CBRE was a brokerage. Brokers closed deals and earned commissions — three to six percent on a sale, four to six percent on a lease. A one hundred million dollar office tower generated three to six million in fees. But every commission was a one-time event. When the cheque cleared, the relationship ended and the broker started from zero. CBRE changed the model by staying after the deal closed. Sell a building, then offer to manage it. Property management fees ran two to five percent of operating expenses. A building costing one hundred million a year to run paid CBRE two to five million — every year. The client who wrote one cheque at closing now wrote twelve cheques a year. Recurring revenue sat underneath the commissions. Leasing added another layer. When tenants left, the building owner needed replacements. CBRE earned four to six percent of the new lease value. Facilities management added another. Consulting added another. A single building relationship that began with one transaction now generated four or five revenue streams running simultaneously.