INTERNAL DIVERSIFICATION

On the other hand, some long-established real estate firms have diversified themselves to meet the demands of outsourcing. Dallas-based Trammell Crow, one of the nation's larger real estate firms, has made a significant move into outsourcing since 1990.

"The vision of our business is to be a complete service provider," says Bill Concannon, president of Trammell Crow Corporate Services, which operates from Stamford, Conn. "As one of the first national real estate service providers that contracted with Corporate America, we were among the first to place into contracts any number of discreet services for corporations. That part of our business now makes up 20 percent of the overall profit stream of our total company."

Trammell Crow has made a substantial investment in service. "It takes people as much as anything," says Concannon. "We have trained and worked with our people to have them understand the larger economic picture as it relates to real estate and, to our clients, how it relates to shareholder value. On our side, that has meant investments in management information services, capabilities that improve our management skills to get the client to make his real estate be more flexible to perform better in a competitive environment.

"For instance," he continues, "leases that track the product lifecycles of certain businesses. Leases that track operation aspects of customers. Innovative financial departments to formulate scenarios that leverage occupancy as a strategic tool." Trammell Crow has worked for many years for the Travelers Financial Group, all the way from facilities management, including their headquarters, to a comprehensive real estateservices arrangement. "Companies like Travelers have grown up to realize that companies can operate their real estate in a way that contributes significantly and profitably to their overall financial condition. As those conditions tend to change dramatically, any real estate firm has to be ready to provide the kind of service and expertise that places the client in a strong competitive position for growth."