Real estate consulting at McKinsey, Bain, BCG
I have noticed firms like CBRE, JLL, Newmark, etc. all have real estate consulting groups providing opportunities to work across many corporate real estate engagements.
Any idea to what extent McKinsey/Bain/BCG real estate practices compare to the "pure" brokerage firms (or similar) above? Unable to tell if the MBB real estate practices are well-established or an online marketing stunt.
I know people who have worked on 2 MBB engagements for RE companies, one being a listed developer and one being a vertically integrated group. It was still ultimately strategy work rather than RE specific, i.e. what business lines should we be in, what asset classes should we be targeting, how do we improve profitability etc.
Interesting work, but not RE specific consulting. I imagine this is where a lot of their mandates come from given it’s not something you’d expect to hire one of the brokerages for. Any idea how big these groups are at the brokerages?
I'll add that this applies to other sectors too (I'm in life sciences). If you want to do generalist work and lightly touch upon many industries whilst being exposed to some level of industry-specific nuances, then MBB is for you. If you want to be much more focused in a certain industry, then industry-specific firms are the way to go. Friend told me that at their MBB they were working on a multi-billion dollar cost cutting for a top 10 pharmaceutical company. The work would have been very similar if they were working with a top supermarket chain or car manufacturer. How "industry-specific" can you really call that?
So consulting is a pretty loose term. My understanding is the major consulting houses like McKinsey/BCG/Bain are providing traditional management/strategy consulting to real estate firms, not "real estate consulting" (again, a non-defined term) per se. They cover real estate just like they cover oil/gas, media, medical devices, etc.
The brokerage houses, at least the very large ones, are generally offering "real estate consulting", i.e. services related in the transaction/ownership/operations of real estate. I think a lot of what the CBRE/JLL types do fall into transaction support (i.e. just another form of brokerage), occupier services (I think this is the largest, its helping firms figure out how much real estate they need/where to house employees/operations, usually in support of tenant rep operations), and valuation (its fancier to call valuation a form of consulting than just appraisal, but probably same people doing).
There are also major consulting hubs focused on real estate in the Big4 accounting firms (and smaller accounting firms), they again provide more standard financial/valuation/systems consulting inline with what those firms do for other industries. I would say these operations probably overlap with the CBRE/JLL types, especially on the valuation front.
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