Surprising and not so surprising findings in recent survey on tech trends in commercial real estate

Posted on May 6, 2013 by

We recently conducted a survey at The News Funnel to gauge the industry sentiment as it relates to technology trends in the commercial real estate sector. Some of the results were not so surprising, but one thing really stood out. The main takeaway from The News Funnel survey was how many exciting new websites are being launched on a regular basis creating a real tech revolution in the industry. What was really surprising however was the amount of respondents who said they are still getting the majority of their news and information from their desktop devices as opposed to mobile. It’s completely contrarian to what’s obviously happening in the tech sector at large as mobile is taking the tech world by storm. I guess old habits die hard, but I also believe that if someone can get the industry to adopt to a mobile solution, they will have the field to themselves! Here are the major findings of our survey:

Which data and information website is used the most by industry professionals?

Which new real estate tech site are you most impressed with?

Which aspect of the industry is experiencing the most exciting innovation?

  • More than half of the survey respondents selected “news”, followed by “marketing” and “space search”.

Which area is lagging the most in regards to tech innovation?

  • “Data analysis” was the answer most given followed by “marketing” and then “property management”.

When asked which sector of the industry is experiencing the most innovation residential or commercial?

  • Almost 70% of the survey said “commercial”.

Finally, and most surprising, when asked what type of device you use to access real estate information:

  • 83% said their desktop while only %17 said mobile.

As always, comments and feedback welcome.

 

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Why we need journalists and editors

Posted on May 1, 2013 by

As social media is how most people are getting their news these days, it also appears to be increasingly co-opted by those that see it as a way to disrupt business and society at large.

http://nyti.ms/Y6TZl9

http://www.cnbc.com/id/100646197

http://nyti.ms/ZuoSki

http://www.buzzfeed.com/jwherrman/twitter-warns-journalists-we-believe-that-these-attacks-will

While the good that social media does far outweighs the bad, there needs to be a healthy skepticism of the content contained on most of these channels. There is obviously no turning back on the trend of citizen journalism, but giving people the power to publish is fraught with danger as well. While no one wants to slow the instantaneous nature of posting content in real time, I think unfortunately we are going to see more and more instances of both fake news and people hacking social media outlets. It’s simply too easy to do.

The solution? There aren’t any easy answers. If filters are added, it would change the nature of social media and that’s simply not realistic. At The News Funnel, while we don’t have editors, we do have tools in place to filter content and review what is posted to our site. The combination of both technological tools and human editing does give us hopefully the ability to screen bad content. But we aren’t of the scale of a Reddit, Twitter or Facebook so we can control our content much better. Plus, we are a pure b-to-b site with content from companies and not individuals. But I would still argue that these monster sites need to ultimately find a way to prevent fake news from one day becoming the norm. The dangers are simply too great to have content left completely unchecked.

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Another great solution for space search in the CRE marketplace

It is clearly a very exciting time to be involved in the tech field of the commercial real estate sector. The amount of startups entering this field are the most I have seen in my 25 year career in this industry. What’s fueling the trend? I think it’s as simple as the fact that the commercial real estate industry was one of the last to experience the tech revolution and also the fact that the residential sector went first and proved their is big money to be made in disrupting the industry.

One of the most interesting startups I have come across recently in the commercial field is OfficeSpace.com. Their mission is simply to create an efficient marketplace connecting tenants with landlords and brokers throughout the United States. Their founder and CEO Susie Algard dreamed up OfficeSpace.com in the same way a great many other startups are born, based on her own personal experiences. She grew frustrated searching for office space as an entrepreneur and dreamed up a better solution.

I recently caught up with with Susie .

Michael Beckerman: What’s the background on OfficeSpace.com?

Susie Algard: OfficeSpace.com was born out of frustration and a need for something geared towards the tenant’s needs. As entrepreneurs, every time we needed space it was difficult to access information on spaces and buildings, it was time consuming and restrictive, not to mention a big headache. What was supposed to be an exciting time became a daunting and frustrating task. Coming from the online community, it was difficult to wrap our heads around the idea that even basic information was not available at our fingertips. You should be able to search reliable and relevant information pertaining to commercial real estate for free, anytime, anywhere – thus OfficeSpace.com was born.

We now feature over 25,000 listings nationwide (growing each day) with user friendly search filters and tools catered to both the broker and tenant community.

We’re streamlining the commercial real estate process for everyone one day at a time with the goal of helping tenants find their dream space while helping brokers close more deals.

Michael: How does your site work? 

Susie: Our Site makes it simple to search for space using a map-based interface, which allows tenants to narrow in on their preferred neighborhoods. Our listings are photo-rich, include detailed information on floor plans, asking rates, and amenities.

We also allow tenants to connect to a broker immediately to start touring and eventually securing a great new space be it office, retail, industrial, medical (you name it!). We even offer services to get your space completely outfitted and ready for business.

The most important aspect of our site is that it’s free. It’s free for brokers to add listings, create professional looking flyers, access and create market surveys and build their own profiles.

For tenants, it’s completely free to search all our listings, download our IOS App, save searches, and share them while accessing important contact information on listings, brokers and more.

Michael: What’s the market opportunity for a product like yours? 

Susie: There are very few resources for tenants to access commercial real estate information. Since a lease isn’t something businesses deal with everyday, the industry jargon can be confusing. We’re trying to make the search for the tenant’s ideal space as transparent as possible. While many larger companies have internal staff and expertise to handle their facility needs, most small businesses, startups and entrepreneurs do not. It’s often the CEO, CFO or office manager who handles most of the work.

The tools and education we provide is really just the first step. Our goal is to connect a qualified tenant with a qualified broker to help them complete their transaction. We don’t think tenants should have to speak to a broker in order to find out how big or how much a space is. Let the brokers focus on the higher value items they offer, whether that’s negotiating better rates or a better TI allowance.

Michael: Tell us about your current market coverage and user base?

Susie: We are a nationwide platform and have current listing information for all markets. We didn’t expect to be nationwide so soon but we had so many requests, why would we say no? That being said, we focus on a few select markets to ensure we have meaningful coverage of the available spaces. Those markets are Denver, Portland OR, San Diego and soon to be Seattle.

Michael: What is your expansion strategy? 

Susie: We’re currently nationwide, but working hard to ensure we have the highest quality database while adding more properties to it each day.

Michael: Do you have a revenue model? 

Susie: Yes, in short, we sell services to help brokers market their properties or market themselves. We also monetize our ability to connect tenants to qualified vendors.

Michael: What other real estate tech sites do you personally follow? 

Susie: In CRE, I try and follow it all, although the list is pretty small. In the residential real estate world, I’m a fan of AirBnB, Redfin and Zillow.

Michael: How can a broker submit their listings?

Susie: Easy. Just go to www.OfficeSpace.com, click on ‘For Real Estate Pros’ to get started. It is very quick to complete and if you don’t have photos, we’ll even send out a photographer (select markets only). If you have multiple listings, please contact us to send us a file that we can upload for you. (Multiple Listings Contact)

Michael: What’s a common misunderstanding about OfficeSpace.com?

Susie: Sometimes there is some confusion about why a listing broker should submit their properties on OfficeSpace.com. They think because they are on CoStar, this is enough exposure and reach. If a broker has submitted their listings to CoStar, they should still submit to us because, unlike Costar, OfficeSpace.com allows tenants to search listings. Tenants have direct access to call and email brokers from our platform. Also, we have thousands of market surveys generated every month nationwide. This is an important tool brokers use and if your property isn’t on our site, it isn’t included in the survey.

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TheCapRate brings technology to an often times misunderstood piece of the real estate puzzle

Posted on April 17, 2013 by

I recently spoke with Michael Foundos, CEO/Founder at TheCapRate (www.thecaprate.com), a really unique site that has developed a cutting edge tool to create a cap rate for commercial properties. Users across the country, property owners, banks, investors and brokers have found TheCapRate to be a highly effective tool in understanding the cap rate formula. To date, TheCapRate has valued in excess of $6 billion in commercial properties since their recent launch in markets like New York, New Jersey, California, Chicago, Boston or Maryland.

Michael Beckerman: Whats the background of TheCapRate? 
Mike Foundos: TheCapRate is the culmination of many years of expertise in the commercial real estate industry.  The current system is really a pivot from a previously unsuccessful product called, the Real Estate Stress Test.  It was designed in response to the collapse of the real estate market in 2008.  The plan was to sell the service to small banks that had large CRE portfolios, but not the manpower to perform sufficient analysis.  After hearing, “Mike, we are already stressed enough, we don’t want to know what your product has to tell us” one too many times, the project was shelved.  After a few years, it was re-purposed, adding the valuation component, which has proven to be more valuable to users. 

Michael Beckerman: How was the site built? 
Mike Foundos: The site is built on the Expression Engine platform using javascript and php, as well as mySQL for the backend database.  It also employs multiple AJAX functions.   

Michael Beckerman: Who is using the site and what’s the feedback you have received? 
Mike Foundos: We have owners, brokers, lenders, investors, and everyone in between using the site so far.  The feedback has ranged from “wow, this is really cool” to “Why is this useful?”.  Needless to say, the latter comment is frustrating, but to be expected when you offer a new way of doing something.  Especially an industry that is as traditional as CRE, you are bound to get some naysayers.  Which, is ok with us.  This is all about learning what works and what doesn’t.   

Michael Beckerman: What is your expansion plan? 
Mike Foundos: We have really just launched.  So, the majority of our initial efforts are site and brand awareness.  Educating users on what we do, how it can be useful in their day to day.  We are establishing our voice.  Our Pro service launches this month, which will allow us to begin generating initial revenue, and more importantly generate deeper engagement with the industry.  However, to date our site has valued $6+ billion in commercial properties with more added each day. 

Michael Beckerman: Is there a revenue model?   
Mike Foundos: The initial plan was to sell advertising.  However, you need to drive a ton of traffic for that strategy to be effective.  This led me to the development of my pro service, which launches soon.  It takes our cap rate quantification system and adds a number of new features.  There will be search, social, stress testing, analytics, customizable reporting.  Users can subscribe at various levels: $0, $50 per month, and $150 per month.  I wanted a product that was good right out of the box.  That didn’t need “traffic” to be useful, and got better the more people who use it.   

Michael Beckerman: Whats next for TheCapRate? 
Mike Foundos: We aim to be the tool industry professionals use throughout the day.  From performing analysis on properties, to discovering new products and services, it is our goal to be one of the most valuable tools in the CRE professionals toolkit.  The site is designed to be very simple to use, and rich in images and graphics.  We are currently developing a marketing platform via our Cap Trends that allows for native marketing versus traditional banner advertising.     

Michael Beckerman: What other tech sites do you personally follow?   
Michael Foundos: We follow all of the hot CRE startups.  But, Spencer Rascoff (@spencerrascoff), the CEO of Zillow is one of my personal favorites.  What they do is amazing.  I think they are one of the most innovative companies out there.  CREOutsider (@creoutsider) is also another good one.  Chris Clark writes about tech and real estate.  
  

 

 

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Does Facebook work for B-to-B companies?

Posted on March 26, 2013 by

Time and time again I hear the same comment from commercial real estate companies, “We are on Facebook but it really doesn’t do anything for us”. I wonder if now that the buzz is out in the marketplace that users are also undergoing Facebook fatigue, will companies have the courage to say “We used to use Facebook, but stopped because it really didn’t do anything for us”.

http://smallbiztrends.com/2013/03/rethink-facebook-engagement.html

Too often I run into many companies that jump on the social media bandwagon just so that they can “check the box” when in fact they have no idea how to effectively use these social media properties and even if they will work for them at all. The important questions that should be asked when considering a social media campaign like using Facebook for instance include: “are my customers here?”, “are my competitors here?” and “will I be able to consistently supply the site with regular updates?”, etc…

In my opinion, the future of social media and small business will be that the company itself will become the destination for professionals to go to. Companies should be thinking less about what other sites go to and hope their customers find them there, and more about how to drive engagement with their current customers on their own channels. That’s where creating unique content and building out delivery solutions will be so important. I would recommend real estate companies and small businesses spend more time and money investing in these types of solutions to drive customer engagement.

Here are some good examples that really raise the bar on content and delivery solutions:

http://neuerspace.wordpress.com/

http://www.dukelong.com/

http://www.coydavidson.com/

http://www.mack-cali.com/

http://blog.compstak.com/

http://retailreport.com/

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PropertyPilot takes real estate data to a whole new level

Posted on March 19, 2013 by

I recently met up with a fascinating new startup called PropertyPilot, which has an entirely new view on real estate data. PropertyPilot recently launched an innovative GIS platform that delivers instant access to tremendous amounts of real estate related data. The site allows a variety of industry professionals to quickly navigate geographic parcel maps covering millions of properties and all property classes, all in a very easy to navigate digital format.

I spoke with David Gross, Director of Business Development at PropertyPilot to get some more insights into their real estate software and growth plans.

Michael Beckerman: Describe PropertyPilot. When was it founded, etc…

David Gross: PropertyPilot is a cloud-based GIS platform that incorporates layers of public, third-party and user data on a digital parcel map. PropertyPilot makes it easy for users, such as local governments, lenders and investors to integrate and visualize large amounts of data.

We have created a robust tool set that allows users to leverage all of the system’s data and layers. These tools are related to market research, property valuation, property records management and marketing.

PropertyPilot was founded by long time real estate investor and technology enthusiast, Michael Bonner in the beginning of 2012, PropertyPilot serves as a map-based platform that easily and securely integrates external data. This application has tremendous value for diversified group of users.

Michael: Who are your target audiences?

David: Today, a number of different types of real estate professionals are PropertyPilot subscribers.  The majority of subscribers are lenders, investors and real estate brokers (both commercial and residential), with a municipalities coming on board in the near term. We feel the data integration solution, coupled with the ability to deploy a cloud-based public-facing GIS portal will greatly benefit municipalities who don’t have the budget or resources to build a comprehensive system themselves.

Michael: Why is there a need for a site like yours? What problems does it solve?

David: For real estate professionals, there are few, if any solutions that deliver as much data and as many tools as affordably as we do. In addition, PropertyPilot’s user experience and proprietary map are on par with the best GIS solutions available.

For municipal governments and to a larger extent, lenders and companies with a real estate footprint, PropertyPilot serves a platform that allows them to integrate all types of data, from different server locations in a secure environment. This solves a huge problem because it streamlines their data on a system that does not require local installation, versioning and expensive updates.

In addition, it breaks down departmental barriers.  For example, a municipal government doesn’t need to rely on a system that becomes antiquated after a few years. PropertyPilot is perpetually improving. Municipal departments, whether it be the planning office or the tax assessor’s office can share data that is critical to their particular needs.  In the near term, PropertyPilot will be available in mobile devices, allowing data to be managed and shared at the street level.

Michael: What is your growth strategy?

David: Like all brand new start-ups, we are getting the word out. It has enabled us to identify our customer’s pain points and invent cost effective solutions. We feel that as a data-driven company, we are capable of producing and broadcasting data and insights that real estate stakeholders will value. This is helping to define our value proposition to a broader audience.

We are building strategic relationships to make inroads to the harder to reach customer segments. In addition we have become active in a number of government and planning related associations, which has helped spread the word about PropertyPilot to influencers and policy makers.

Over the next 3 months we will expand our regional footprint to New York and Pennsylvania.

 

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Now maybe its LinkedIn’s turn to become the next MySpace

Posted on March 12, 2013 by

Just hot off the press that LinkedIn is buying Pulse (http://allthingsd.com/20130311/linkedin-to-buy-pulse-newsreader-for-more-than-50m/), a very popular and successful customized news site with huge subscriber numbers. Am I jealous that they didn’t buy our site for a reported $50m-$100m since we are also in this space, www.thenewsfunnel.com???? Absolutely!!!

Seriously though, its a smart move by LinkedIn. But it also got me thinking about sites like LinkedIn, Facebook and others that have this unyielding desire to grow, grow, grow. Lately I have been reading a lot about how Facebook is suffering from user fatigue. I wonder as LinkedIn tries to be all things to all business users, will they suffer the same fate? I often hear from my HR friends or professionals in biz dev that LinkedIn is a highly effective tool for networking and recruiting. I get that. But news as well? What’s next in their pursuit of even more scale and will it dilute their effectiveness and core value proposition?

What’s fascinating to watch is how these social media sites become so obsessed with the numbers game and never seem to stop scaling. What is the motivating factor? Is it the number of users they have? Is it profits? What’s also so interesting to observe is how oftentimes while these monster sites are growing in huge numbers, more nimble, more creative and original sites like Instagram, Pinterest and others seem to see opportunities to challenge these mega sites and are luring users away. It’s only a matter of time until some social networking site for business professionals comes along to challenge LinkedIn. (I am sure there is already one in fact).

So my question is, “Is bigger better?” or “is just being better, better?”

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