Companies are increasingly questioning whether to out-source transaction management functions or keep them in-house.

The decision to outsource transaction management functions to vendors, or to assume them in-house, is receiving increasingly thoughtful attention from top management. Historically, companies have perceived transaction management as external to their core business and in many cases they are not even aware of the amount they pay to brokers to clinch a deal.

Take the case of a venture capitalist firm in Palo Alto, California. When asked if they knew the amount paid to the broker for the lease they had just signed, they shook their heads “no,” adding that because the landlord paid it separately it didn’t really affect them. The reality is that the commission amounted to nearly half a million dollars, and in some way, shape or form these dollars were coming out of their rent! In this case the money was gone and there was nothing they could do.

But other companies are starting to wake up and understand that insourcing, or at the very least better managing of the outsourced party, is going to be a far more profitable and cost effective approach.

If you need consulting on Commercial Real Estate, contact TrustedPeer Expert Denis Mehigan .