In a Brick-to-Click Shift, Real Estate Companies Use Internet to Sell Properties: High Tech Redefines Role of Brokers
Cleary, Mike, The Washington Times (Washington, DC)
Jim Wright is catching up.
The commercial real estate broker's decision to create his own Web site is a sign of how an industry that has been slow to use on-line tools has started to tap the Internet to sell and lease buildings, gather data and serve tenants.
"It's been much faster in the residential [sector]. We've seen homes listed and sold," said Bill Swanson, managing director of the real estate investment banking unit of Friedman Billings Ramsey (FBR), an Arlington brokerage that specializes in technology companies. Commercial real estate owners "view the Internet as a bit of a threat, particularly in retail (real estate)."
But that's changing as real estate companies begin to explore new ways of electronically marketing their properties and serving their tenants.
"It's having a profound effect," said Dennis DeAndre, president of LoopNet Inc., which lists commercial properties on the Internet. "A broker used to spend 80 percent of their time marketing. The broker can now focus on value-added services," such as investigating financing, negotiations and consulting, he said.
The change is drawing real estate companies into new areas of business.
"We think that every company will have to become some kind of an e-company," said Karen Widmayer, spokeswoman for CarrAmerica Realty Corp., a District-based real estate investment trust.
SELLING SPACE AND SERVICE
In the most obvious change, commercial real estate companies are marketing property over the Web, following in the footsteps of books, clothing, music, computers and even houses. In addition to real estate companies posting their listings of properties for sale and lease, firms without any property of their own are becoming middlemen by providing Internet listing services to brokers.
LoopNet is the largest, with about 45,000 listings for sale and about 32,000 for lease, but it isn't alone. The free listing service faces competition from San Diego-based Comps.com (at www.comps.com) and PropertyFirst (at www.propertyfirst.com) of Alhambra, Calif. Another real estate investment firm, Kennedy Wilson Inc., just teamed up with Web developer Guidance Solutions of Marina del Rey, Calif., and posted a new Web site, www.eProperty.com, for on-line office building auctions.
Internet-based real estate data and market research has been around a little longer, with Bethesda-based CoStar Group among the leaders in this area.
Now more companies and even brokers, such as Mr. Wright, are weaving their way into the Internet. Mr. Wright, who is with CB Richard Ellis, expects to publish his own Web page, www.officebuildtosuit.com, on the Internet within three weeks. He plans to market himself to corporations that want to build their own offices.
The Web site will be linked to CB Richard Ellis' Web site, which is being redesigned in a project estimated to cost about $30 million, and is expected to open in December.
Brokers frequently have their own businesses on the side, or act as independent agents under the umbrella of the company, but the Web site opened new territory - and questions about boundaries. Mr. Wright wanted the profile that a link to the CB corporate Web site could give him, but CB wanted to make sure the independent Web site didn't stray too far from the corporate brand identity.
"They don't care to have a lot of Web sites by people at CB that have not been sanctioned," said Mr. Wright, who said he has cooperated with the company.
The Internet is so pervasive that it could actually bypass the broker, according to one analyst.
"I can see a world where you lease office space without a broker" within the next 12 months, said Mr. Swanson at FBR. "You e-mail information back and forth, there are virtual shows of the site, and one ride up and down the elevator."
"I think brokers are going to have to redefine themselves," he said. …