Top Five Internet Trends
Log On to the Ideas That Are Changing the Real Estate Business.
Editor’s Note: The following article is based on a session from the 1998 CCIM International Commercial Real Estate Conference in San Diego.
The fundamental concept of the Internet is communications. It will change your business by changing the way you relate to your colleagues, your competitors, and your clients. It is simply a communications network that you can use to establish and reinforce connections between people.
To gauge the impact of this technology, look at the companies that are successfully using the Net today. For example, Dell Computer Corporation (http://www.dell.com/) sells $3 million of computers over the Net each day. Microsoft’s CarPoint (http://www.carpoint.com/) processes orders for $80 million in cars a month, and its travel service Expedia (http://www.expedia.com/) sold more than $100 million last year in bookings. All these services have equally successful competitors.
The on-line bookstore Amazon.com (http://www.amazon.com/) sold $148 million of books last year. In 1994, the company didn’t sell one book. Further, Amazon’s market capitalization is about $1.5 billion [as of June 1998]. The market cap of the largest traditional bookstore, Barnes & Noble, Inc., is about $2.5 billion. So Amazon is about 60 percent of the size of Barnes & Noble, but Barnes & Noble occupies 12 million square feet in about 1,000 stores nationwide. Amazon doesn’t have one store. That tells you things are changing.
On-line real estate success stories also illustrate the growing importance of Internet communication.
- ARCS Commercial Mortgage Company (http://www.arcscommercial.com/) gained a client who saw its Web site on a Sunday, called the office on a Monday, flew there on a Tuesday, and closed on a $6 million loan 31 days later.
- An Indianapolis brokerage firm, Olympia Partners (http://olympiapartners.com/), posts its e-mail address on its signs, which has led to relationships—particularly with technology companies—that it otherwise might not have had.
- Levin Management Corporation, which manages and develops shopping centers, uses the Electronic Blue Book of Building and Construction (http://www.thebluebook.com/) to bid out its jobs, particularly in areas where it is not physically located.
- Instant messaging services such as Excite’s PAL (http://pal.excite.com/) let colleagues talk on-line in real time. That’s one of the ways New America International (NAI) executives keep in touch.
These examples illustrate how the Internet is changing the commercial real estate field. Five trends point the way to the future of this technology.
Branding gives you character and a personality. It lets people know what to expect and puts them at ease—and that’s exactly the relationship that you want with your clients.
You can build branding three ways through your Web site. First, effectively describe your core services. Tell where you are located, what markets you serve, and put a good brochure on-line.
Second, put good market commentary on your Web site to pull people back. What’s going to draw them back are new stories, trends, and industry information.
Third, provide access to your staff. You can ease the process of starting communication by supplying a professional directory with pictures, bios, e-mail addresses, and phone numbers of your professionals for potential clients.
2. The E-Mail Connection
The universality of e-mail is the hidden secret of the Internet. People get a little wowed by Web graphics, but often underappreciate the ability to communicate using e-mail.
In the future, e-mail will become the primary communication that you have with your clients, your customers, or the tenants in the buildings that you manage. It’s the most logical and frequent way you’ll initiate contact, just like the telephone is today.
E-mail is an asynchronous communication, which means you can talk to people without bugging them. For example, how many times do you call somebody and hope they don’t answer because all you want to do is leave a message? That’s an asynchronous communication.
As a point of "netiquette"—and good business sense—make it easy for people to get back to you. If you haven’t already, go into your e-mail program and figure out how to add a signature—your name, company address, and phone number. Don’t make clients look in their contact database—put it right there in front of them.
As you use e-mail, build up your e-mail lists. Anyone who isn’t voraciously collecting their clients’ e-mail addresses today is losing an opportunity to go back to those clients—asynchronously—to build an awareness about what your capabilities are, what you have done recently, and what you have available for sale. That capability should make e-mail newsletters very important in the future.
3. Intranet and Extranet
Another trend is using intranets and extranets. An intranet is a private network that uses Internet technology—you need a password to enter it. An extranet is when you allow your clients to access your intranet.
Think of your intranet/extranet as an Internet service center, a way to service people 24 hours a day. This may not be applicable to small firms, but at larger firms, people could be at terminals to answer e-mail 24 hours a day. This makes it easier for clients or potential clients in Asia or Europe to communicate with you at any time, asking you for market information, whom they should contact in a given market, or about the status of an individual transaction.
Personalization is a huge trend for the future of Web communication, so clients, depending on whether their interests are retail or industrial, for example, can get slightly different information from your extranet.
Companies that are developing significant intranet/extranet capabilities today don’t want to tell you how successful they are, because it’s a competitive advantage to have this capability.
4. Data Access
All kinds of market research—comparable sales, tax information, assessors’ records, zoning information, and economic incentive programs—will be available on the Internet. Some of it is available today, but all of it will be there soon, probably in the next two years.
For example, the Survey of Buying Power On-Line (http://www.sbponline.com/) provides demographic information. Using a graphic interface, users can drill down through a U.S. map and look at information down to the census block level. It offers 200 to 300 fields of information for $600 to $900 a year, depending on how many times you access it.
KnowX (http://www.knowx.com/) is a compilation of free public records databases—licensing, debt, corporate securities, lawsuit, and property information. For instance, if you wanted to find out whether any of your tenants had lawsuits against them, you could use this site. If you need information on a public company, go to the Wall Street Research Network (http://www.wsrn.com/) site.
Sometimes you can take advantage of consumer-oriented sites. For instance, AllApartments (http://www.allapartments.com/) tracks about five million units. If you’re doing a survey for an owner and you need to find out what comparable rents are, what floor plans are like, or where properties are located, you can extract that information from AllApartments.
5. Public Access
The last trend is public access to listings. I often argue that the best thing that could happen is if your clients knew every property that was available for sale because they’d be overwhelmed by the choices. For example, if a client wants 10,000 square feet in San Francisco and there are 50 choices, how does the client begin to make a decision?
Despite the advances of the Internet, brokers are not going to go away. They’re going to have different skills and knowledge sets, but they still will be absolutely vital in the process of a real estate transaction.