How commercial real estate firms can capitalize on the private markets

The private markets, which encompass venture capital and private equity, control more than a quarter of the U.S. economy by capital, and 98 percent by number of companies. They also have the potential to be a significant source of revenue for commercial real estate firms.

Here’s how.

The opportunity

In the private markets, fast-growing companies that aren’t publicly traded give professional investors equity in exchange for the funding and mentoring they need to grow. These investors include venture capital firms, which invest in young companies (startups), and private equity firms, which invest in more established companies.

These private companies regularly undergo mergers, make acquisitions, and navigate other complex organizational changes (restructuring, office moves, etc.)—all events that indicate a need for new commercial real estate.

With a detailed understanding of these private market activities, commercial real estate firms can unlock a powerful, efficient way to discover and win new business.

Private markets landscape

As capital flows through the private markets, it moves from entity to entity through a series of financial transactions. Every time capital changes hands or private companies use investment capital to grow, professional service providers advise on or execute the transaction.

Key business development drivers

In 2018 alone, more than 40,000 deals involving VC or PE financing, mergers or acquisitions took place in the United States.

Commercial real estate firms won—and will continue to win—new business in this fast-growing financial sector through these proven strategies:

	Mapping high-growth regions and identifying fast-growing companies, then adjusting business strategy accordingly to pursue the most relevant prospects.
	Building relationships with VC and PE firms so they return every time their portfolio companies need tenant representation.
	Tracking when companies get funding, so they know which are growing and are likely in need of new commercial real estate.
	Getting in early with promising startups and working with them at every stage of their growth.
	Staying up to date on existing clients’ and prospects’ business milestones—such as recent investments or financing valuations—so they can build stronger relationships.

If you’d like to learn more about the private markets and how your firm could benefit from pursuing new clients in the space, download our private markets guide.