I’m just back from the future!
When I started in this industry consulting was a pretty niche activity, with only a few firms (in Ontario) offering market surveys and other research and opinion services on a fee basis. Most clients were developers and property managers, either wanting to get ideas for a new rental development project or wanting ideas to improve the operations and pricing of their existing rental property. Lenders and investors, who these days play a big role in demanding that their clients and partners make use of consulting services, were few and far between in those days. Most of the reports I prepared when I started in this industry were documents which clients (as end-users) would treat as private and not circulate to others; in recent years, most of the reports I prepared were intended to be used by clients as supporting documentation for their development proposals, especially when seeking lending and/or investors and partners.
Given this shift, what will the future of consulting look like?
With vacancies at record lows in southern Ontario, the urgency doesn’t really exist for landlords and property managers to review their properties and identify opportunities for improvement—basically, they can rely on the huge mismatch between demand and supply to ensure a steady flow of renters no matter what rents they charge and no matter the conditions of their properties. And buyers and investors are so hungry for rental properties that they’ll purchase almost any buildings that become available for sale. In other words, consulting services that might be termed “due diligence reviews” or “market opportunities studies” are less in demand these days. Consulting services that are more in demand are “feasibility analyses” for new rental projects, thanks to an increase in the number of development projects being proposed.
I think consulting in the future will separate into two streams, each with their own clients and end uses: (1) customized strategy/feasibility and (2) market intelligence.
(1) Customized Strategy/Feasibility
Developers and lenders will need high-quality focused research and feasibility studies for individual projects, portfolio management, and due diligence for sales/purchases which will require consultants to acquire significant experience and knowledge and analytical skills, and an ability to synthesize those into strategic advice. Developers will need ongoing life-cycle advisory and strategy services for new development projects which will require consultants to provide services from the beginning to end of projects, not just provide early-stage single-point consulting services.
(2) Market Intelligence
Market surveys providing market information will remain in demand but will become more routinized and even automated where possible. Providing this service will require a (partial) shift away from traditional consulting services towards data-heavy services and a heavy emphasis on technology. Output will be market surveys for single-point use (feasibility, sale, lending application, etc) and/or database access and associated analysis tools for direct client use or third-party use.
Nobody knows what the future will bring, including me, but I think this separation is already underway, in an informal way not clear to those not in consulting roles. The second stream, “market intelligence”, is a service that non-consultants and non-consulting firms could provide, if they’re in the data collection business already. The first stream, “customized strategy/feasibility”, by contrast has a high barrier to entry, and is a service that can only be provided by experienced and knowledgeable consultants. Although in practice these two streams will overlap and complement each other, many clients and many projects will require only one of the two, or if both are required then they might be obtained from different consultants.