Standing Out Online
Real Estate Companies Tailor Web Strategies to Create an Internet Presence.
In the early 1990s, many commercial real estate professionals perceived the Internet as a distant technological galaxy that would never impact their daily business. Yet in less than a decade, the industry has succumbed to the Web's gravitational pull: Today nearly every commercial real estate company has a Web site.
As this vast online universe expands — ResearchWorldwide. com estimates nearly 100 million Internet users this year — so do commercial real estate professionals' questions about how to use it to their advantage. For instance, can you gain new business online? Is a site that simply advertises your name enough? Can you provide better client services via the Web?
The Internet's role in a commercial real estate business strategy is a very individual choice. A company's staff size, budget, and technology capabilities are factors that weigh heavily in the decision. And, since real estate is a people-oriented business, many commercial real estate professionals wonder if investing time and money into an online presence is really worth the effort.
Commercial Investment Real Estate recently spoke with three commercial real estate companies that have used the Web to build a client base, create a 24/7 marketing strategy, and provide value-added client services.
Building a Brand on the Web
In January 2000, Hal Hanstein, CCIM, GRI, jumped from a salaried, 20-year career managing and leasing property into a 100 percent commission-based solo commercial real estate brokerage. To make his name known in the highly saturated St. Louis market, Hanstein had to think beyond traditional marketing to gain a foothold among his well-established colleagues.
To kick start his business, Hanstein coupled the far-reaching power of the Internet with conventional branding strategies. His first step was to hire a company to develop www.isellstlouis.com, a basic Web site designed to gather contacts. The next step was to lure prospective clients via a targeted print advertising campaign.
“I used the general principles of marketing,” he says. “The difference is I only promoted my Web site.” First, he created, bought, and registered approximately 40 domain names related to commercial real estate in St. Louis and directed all of them to his site. Second, he placed print advertisements in business journals touting his Midwest location and citing only his Web address — no phone number, no postal address. Since the local market was tight, “I chose to target journals on the West Coast initially, but it didn't take too long for prospects to come in from around the country,” he says.
This approach worked: In less than three years as an independent broker, Hanstein has amassed a database of 4,000 contacts and completed deals as far away as New Zealand. Most clients said they found his site by conducting online searches using keywords, such as St. Louis and commercial property. “The site came up multiple times in search engines,” Hanstein says.
However, he admits the first year was tenuous and the investment in his business was highly front-loaded. Hanstein reinvested nearly all of his first year's net profit — about $20,000 — to further enhance and promote his Web site. He currently spends about $50 per month for a local Internet service provider to maintain the site and around $1,000 annually for search engine tweaks, directory listings, and domain name registrations.
Despite the costs associated with maintaining an Internet site, the deals it generates are worth the investment, Hanstein says. For instance, his Web site helped him land a site selection deal for a new Bentley car dealership in St. Louis. Also, an online query from a Gary, Ind., investor resulted in a $3.2 million shopping center sale. And, a restaurant chain's real estate director who found Hanstein on the Internet worked with him to sign a series of ground leases for new developments.
But not all online leads pan out: The Web also can be a conduit for some unusual business propositions. “I had a [prospect] from Paris who wanted to know if I could help her sell a chalet in the range of about $2 million. Unfortunately, I didn't have a clue,” he says. Yet the majority of Web-generated opportunities have been fruitful — net profits grew fivefold in his second year of independent brokerage — and sparked many international deals. “The Internet is global, so my business is global,” he says.
To other independent brokers looking for cost-effective approaches to Web marketing, Hanstein offers this advice: Be repetitive, he says. “Put your Web site and your name in front of as many people as often as you can,” he says. In addition, take advantage of directory listings and domain registration services. “The more exposure [your site] has, the more traffic it will get, and that means more business.”
Using Multimedia Features
Although Internet use is widespread, slow dial-up connections hinder many clients' access to today's multimedia features. Despite the limitations of mainstream technology, the Blonder Group LLC, a Nashville, Tenn.-based commercial real estate and business advisory company, chooses to push the envelope. The company's Web site, www.blondergroup.com, which utilizes audio and video technology, is the core of its marketing strategy.
The Blonder Group is one of only a handful of commercial real estate companies using multimedia features. “Most real estate companies' Web sites don't have sound or video — they're completely one-dimensional,” says Ira Allen Blonder, the company's managing partner. To set itself apart, the company implemented interactive features “to thoroughly engage the user,” he says. “By extending the time [clients] spend navigating our site — viewing properties, accessing investor tools, using links to demographic and economic information — we are closer to earning their trust and business.”
Using Macromedia's Flash technology, Blonder Group creates interactive marketing presentations for prospective buyers and lessees via the Internet. For instance, a client wishing to expand or relocate can view a multimedia presentation to compare a variety of available properties or space options in a given market.
The ease of this process is what usually hooks prospective clients and keeps them coming back time and again. “A potential space user [receives] a concise preview of buildings without ever leaving his office,” Blonder says. “I believe most clients soon will want to preview properties online rather than spending endless hours touring buildings that don't meet their needs.”
In addition to customized presentations, Blonder Group uses Internet Pictures Corp.'s iPIX Immersive Imaging software to provide 360-degree views of properties online. Viewers can pan left, right, up, or down and zoom in or out. The program works best through broadband connections, usually downloading in less than five seconds. However, the download time through dial-up connections can range from 45 to 60 seconds. “Ten seconds is the threshold for downloading. If it takes longer than that, visitors [to the site] lose interest,” he says.
With that in mind, the company operates its Web site on dual platforms — offering an HTML version and a rich-media version — to avoid alienating potential clients who have slow Internet access.
Having had an online presence since 1985, Blonder is quick to point out that maintaining a high-tech Web site is a constantly evolving process. For instance, though the company launched its Flash presentations and iPIX virtual tours last May, the technology already is outdated; faster, better multimedia features are on the market.
Does the return on investment pay off for such rapidly changing Web technology? “Rather than quantify our Internet site as a definable source of revenue, we view it as an alternative marketing medium, operating on a 24/7 basis,” Blonder says. “The payoff comes in many forms — all long term.” The site and its features generate repeat clients, numerous referrals, and a strong brand identity, Blonder says.
In fact, Blonder recently negotiated a deal with an international company seeking to relocate its corporate headquarters in Nashville. “In the past, we would have sent them property brochures, but when we sent them a [Flash] presentation and they accessed information [on our site] about Nashville's vibrant and eclectic economy, their New York counterparts directed their interest toward our property,” he says.
Enabling Real-Time Communication
Integrated Companies, a Portland, Ore.-based commercial real estate and consulting company, focused on client service when it developed its Internet-based project management tool. Today, the system provides a growing number of clients the unique opportunity to manage their commercial real estate projects online. “Our site [offers] a one-stop, interactive location for everyone involved in a project to get a real-time snapshot of its status,” says T.J. Newby, CCIM, an associate broker.
“Five or six years ago, there were very few Web-based products available that could meet our clients' needs. The [products] were either too rigid or too generic, so we built our own,” says Jeff Mason, the company's vice president and developer of Integrated's Web-based Facility Change Process Control System.
To illustrate how the system works, Mason tells of a client seeking help in subleasing 2,000 square feet of office space that included several tenant improvements.
Using the facility control system at www.theintegratedcompanies.com, the client, contractors, vendors, and other parties involved could access transaction information via the Web. Through this secure, real-time forum, various parties could log progress, request changes, provide feedback, view contracts, and, most importantly, evaluate computer-aided designs of the new space. “The client could approve or change the CAD layouts of the space immediately. This saved everyone time,” Mason says.
Saving time is the primary benefit for clients using the online tool. In fact, the sublease project spanned just 45 days — from the initial request for space to the day the tenant moved in. The system reduces travel time for property visits and face-to-face meetings and completely eliminates the need for snail mail. In addition, the Web's round-the-clock availability allows Integrated to manage projects in remote locations and different time zones. “Timing and control are often the crux of the deal; these tools give our firm an edge,” Newby says.
Another benefit is cost savings. Although clients pay a setup fee and monthly service charges to maintain the transaction database during a project, they pay fewer expenses for travel and document transfers and general business costs. Those costs are reduced for Integrated as well, Mason says. And, with fewer operational costs and more time available, the company can expand its workload, which translates into more business.
As with most Internet services, backup systems are necessary to safeguard against downtime. Though Integrated originally maintained the management site on an in-house server, now a Portland-area ISP hosts it. “They have redundant carriers and access points and power backup,” Mason says. Integrated continues to maintain a copy locally for the worst-case scenario.
The Web-based system gives Integrated's brokers an edge when seeking out new business. “It helps us better evaluate clients' opportunities and provide a unique value-added service,” Newby says. And once clients are on board, the repeat business is good. “Our clients like the tool and continue to use it,” Mason says.
These approaches illustrate just a few of the ways the Web can be used to build contacts, market your business, and improve client service. Clearly, the Internet offers commercial real estate companies a world of opportunities. Though there is no one-size-fits-all approach, the key to making the most of what the Web has to offer is to determine how it best fits into your company's business strategy.