Please Rotate Your Device
Are you are tired of driving around and calling signs on buildings why not search for properties online?
Let us take a look at what other businesses are doing. Loopnet, the most heavily visited commercial real estate listing site (with over 5 million monthly visitors), and Google teamed up to commission a tenant online behavioral study.
80% of respondents use the internet more for searching for space than they did three years prior.
59% initiate the commercial real estate search online.
Throughout the course of the entire search, 86% at least dabble with internet research.
And most of you are on search tools like Loopnet and CoStar, followed by search engines and local listing sites. Other online tools include things like space calculators.
And when you hired a commercial real estate agent, you did not quit searching online:
And it was for obvious reasons:
Google and CoStar asked their participants how many STARTED the search with the internet. A useful question would have been how searchers ENDED their journey.
Here are the reasons why the internet is a good place to start but for most businesses but at some point you need to call in a real estate pro:
Unfortunately property listing sites have not been particularly great at policing listings that have leased. Not even commercial real estate brokerages themselves are particularly diligent at removing their old listings from their websites.
Take this example from one of the biggest commercial real estate firm in world (over 20,000 employees globally):
Too bad that this space leased 3 years ago, according to the agent we contacted to retrieve more information. He literally emailed back "Where are you getting your information? I leased that space three years ago."
He did not respond to our reply of "your website".
When clicking on the above space, the link directs us to Loopnet. Here are the details we get (slightly altered to protect the building identity):
So one click in we find out nothing more about the space, except the rental rate. There is another link called "Attachments", which we only find by scrolling down the page.
Here is what was missing:
We are just given a link that points back to the listing agent's website, which guides us back to this site, which guides us back to the listing agent's website - like a game of hot potato.
Neither site wants to give the customer the information they are looking for.
Listing agents do not provide a marketing flyer for one of four reasons:
Regardless of the reason, you now have one more step to take...fill out the agent's form or pick up the phone.
Multiply this process for every building that has potential and suddenly searching on the internet is starting to be a bit more work than you thought.
Not to mention that many of the agents simply will not get back to you, and some will take a week or two...long enough for you to maybe forget about your inquiry.
Commercial real estate will always be a walking, talking business. It is estimated that 25% of the deals that get done in the industry are on spaces that never hit the market.
They mostly come from very suites that landlords find tenants before the leases expire. In some cases they come from excess capacity that existing tenants have.
Here is an example of a tenant leasing 3,800 square feet based on their agent contacting a landlord and then the landlord asking his tenants about excess space anyone has to give up:
The problem with independent landlords is two-fold.
One - some simply do nothing more than put a sign on the building and do not have a website, let alone a digital strategy (like emailing real estate agents their list of availabilities or simply having a website).
Secondly, of the ones that have a website, many of them do an absolutely lousy job of keeping it up to date. It is inconceivable to most people that with such big dollars at stake in commercial real estate that some landlords would be so neglectful, but keep in mind the profile of some of these landlords. Some did not have to work to get to where they are - many of the owners inherited the properties.
Others have positive cash flow and they are happy with that. Others despise the idea of paying listing agents and think they are better off without their help.
An experienced agent will have a list of these under the radar landlords to reach out to.
Each small real estate brokerage does not list much of the market, but the sum of them starts to add up. The small broker websites are bit harder to find on the internet. The brand names in commercial real estate are recognizable and when tenants search for space in their area they usually land on one of these websites.
Some of the small real estate brokerages may not be indexed with Google or may not rank well in search results. Their spaces will therefore not be very findable.
Being a "tenant advocate" and only representing corporate space occupiers is a unique selling proposition.
So when the prominent tenant rep firms are helping with disposing of space for their clients, they are in a bit of an awkward position. They are introducing conflict of interest to their model.
As marketers of space, they are now in a position of representing both the sub-landlord and the subtenant in a transaction.
For this reason they tend to not publish their sublets on their website ? they simply email their sub-listing availabilities directly to the real estate brokerage community. That means that you will not find those sublets with your google search.
Are we not yet at the point where bots crawl landlord websites and instantly update availabilities in real time?
For commercial tenants, unfortunately not.
Industry curators are still going to landlord websites manually to update information. Not only will they have the same information as the landlord sites (which may be out of date), but they are likely a month out of date.
And here is the evidence (screen capture taken November 16, 2016):
So the industry source (this is one that most commercial agents use) is almost 5 weeks stale. When looking at the landlord's website, the space has been leased:
By the way, if you wanted a copy of the floor plan or some interior photos (when the space was available), you could find those resources on the landlord's site, but he curator did not bother to include those documents on their website.
So if you started with the curator's site you would still need to take the extra step of contacting the landlord to get more information before touring.
The other curation model is for the marketers of space to upload their own spaces (this is how Loopnet operates). But they run into the same problem as outlined above with respect to the freshness of that information.
We spoke with a prominent commercial agent in Boston who let us know that in addition to his company's resources, he receives over 100 emails daily with marketing flyers.
He organizes them into 25 different zones. Each zone has an average of 50 different spaces. By keeping all the emails and regularly browsing each geographic node, he is deeply entrenched on what is available in the markets he is active in. Whenever something new comes in it stands out right away.
The internet is terrific for some many things. At present, it simply cannot replace the intuition, deep market knowledge and expertise a quality agent can offer a tenant (not to mention getting the best commercial lease analysis once you have found the space).
62% believe the internet is a useful tool for finding a broker, so even when you are not looking for space but for a real person, the internet is still useful in finding that agent. For the reasons listed, maybe it?s better to use the internet for this purpose.
In today's world though, you are still looking for the space, instead of the broker?