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A Secretive Business Is Slow to Open Up to the Internet

It's a Work in Progress for Online Firms

March 10, 1998|BOB HOWARD | SPECIAL TO THE TIMES

In an industry traditionally so secretive that brokers have been known to lock up their Rolodexes at night, executives at a Northern California company called LoopNet considered it quite a coup last month when Grubb & Ellis, one of the country's largest commercial real estate brokerages, chose it to market property listings on the very public Internet.

LoopNet, which calls itself "the Internet's largest commercial real estate listing service," is one of a host of companies angling to adapt the Net to the commercial real estate world.

But purveyors of online services, and others who would like to see the world of commercial real estate brokerage become more efficient through the use of technology, have their work cut out for them.

According to industry veterans who have embraced computers and wish others would do the same, "network" in the commercial brokerage sense is still more likely to refer to personal business connections than to personal computers.

"Business America, in general, is way ahead of the commercial real estate industry in terms of its use of technology," said Alan Beaudette, senior managing officer of the Newport Beach office of CB Commercial Real Estate Group.

Experts say the commercial brokerage world has been slow to get interconnected for a number of reasons: Despite the existence of large, national brokerage houses, the industry is still quite fragmented, populated by many small shops that may or may not employ the latest technology. The most successful brokers have traditionally been gregarious, personable types--not office-bound computer jockeys. Brokers who have made a good living for many years without technology may see little reason to change.

And unlike the online culture, in which information flows freely, the real estate business has always placed a premium on keeping information proprietary, with brokers guarding data jealously in hopes of closing potential deals before someone else hears about them.

"There is still a perception that knowing the details of the most recent lease in a market makes you the expert. It doesn't. It's just one small piece of what you need to know," Beaudette said. "There isn't a public database for lease transactions because every firm collects them on their own. Many of the firms don't even computerize the data. It's still every individual sales professional sitting in his or her office, collecting those [statistics] and hoarding them."

But technology advocates believe much of that is going to change. Beaudette said one of the first orders of business when CB Commercial merged with Koll Real Estate Services last year was to ensure that every professional in the company had a computer. But many real estate professionals at other firms still don't have computers on their desks, Beaudette said, and many of those who do are still not connected to the Internet.

"I can't reach the bulk of the brokers in Orange County through the Internet because so many of them aren't on it," he said. If more brokers were hooked up, he explained, they could all market properties much more efficiently.

Beaudette and other technology advocates such as founder Jerry Porter of Brentwood-based Metrospace/Cresa and Bill Millichap of Palo Alto-based Marcus & Millichap believe the commercial real estate industry is just beginning to tap the potential of computers and the Internet.

Porter, who founded Metrospace in 1983, says the company's use of technology is one of the biggest reasons his relatively small firm of 20 brokers has landed some prestigious clients, including DreamWorks SKG, E! Entertainment and the city of Los Angeles.

"We wouldn't be where we are without technology," he said.

Porter points to the 26 Metrospace computers all linked together and to the Internet with the fastest connections available. Anyone at the company can access online information immediately without having to go through the dial-up process--and can share that information with others instantaneously.

Porter has a high-speed ISDN line at home for Internet access and is never without either a laptop or his hand-held computer. Metrospace was the Los Angeles test site for CoStar, a national service that tracks commercial property data, and Porter admits to a passionate interest in technology that finds him constantly scanning computer magazines to learn about the latest and best hardware and software.

But the technology isn't just gadgetry; it provides a way for him and his staff to access more information faster, to communicate with clients and one another faster, and to provide new types of services that clients are demanding. An example: When clients want to find new work sites that are conveniently located for their employees, Metrospace uses a list of employee ZIP Codes to create computerized maps showing where all workers live in relation to a proposed new location.

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