Don’t you hate it when you can’t find something online? And one of those things you can’t find is commercial real estate. Who makes phone calls anymore to find out anything? Why can’t we find the data we need online? Why only one picture? Where are the virtual tours so we don’t have to shell out money for gas?
Who’s responsible for this mess? The antiquated CRE industry and its hapless agents. Thanks to those pesky exclusive agreements, agents are gatekeepers of the listing data. And since they can pick and choose where and how to advertise their client’s space, agents control the marketing channel.
And they’re not doing a very good job! Owners get a puny exterior shot and scant information displayed on their behalf on dismal aggregator portals. Potential users may even be asked to pay to view these measly offerings – or forced to jump from one free site to another to find everything that’s available. Small space users in particular are given short shrift since the commission generated from these deals doesn’t cover more extensive marketing by the agent. Agents are really only interested in big deals anyway.
Someone’s got to do something about it! Innovative start-ups to the rescue, with sites lavishly presenting properties with tools and services related to the leasing process. Design your dream office, pick your furnishings, find the nearest place to get your double latte and read what the other tenants think of the place. Users will be so drawn to the experience that these start-ups will “own” the marketing channel for commercial real estate – or at least the small space user. They’ll be able to deliver users to owners at a fraction of the cost thanks to their efficient technology driven process. So long agent! Hello electronic middleman!
There are just a few problems. In order for these start-ups to become the new middleman they’re going to need the old middlemen. Not one start-up I’ve seen doesn’t involve agents in some way. They’re getting data from them, referring leads to agents for a cut of their commission, collecting subscription fees or offering them up as a value added “service” to their visitors.
They say they have to involve the agent because, you know, they don’t want to get into the “transaction” side right now. They have little choice anyway since there’s no reliable or as efficient way to get the data they need to operate. But sadly, those hapless agents’ resources can only be stretched so far. With all these alternatives out there, few can keep up with creating accounts, paying subscription fees and submitting and maintaining the same data over and over again to one aggregator after another. Too bad for all those start-ups. Not enough data…no consumer draw…no agents making deals…out of business.
No. There’s nothing innovative about these new sites. It’s just the same old model with a prettier face. The larger intent – to bypass the agent/go direct to the owner – they mostly chickened out. Innovative ways to collect reliable data? They didn’t go there. Streamline the leasing process? No where in site.
Certainly there’s room for these start-ups, but they’ll have to work as hard as any good agent to prove their worth. And every good agent should take some pointers from what these sites are offering. Don’t be lulled into thinking the same old, same old is good enough when owners and users alike are looking at these flashy new sites. Time to put some more thought into your marketing process. In the meantime, CRE waits for real innovation.