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Does Commercial Real Estate Need IDX?

Commercial IDX.  Interesting guest post from John Ziemba.

Does commercial real estate need IDX?

I think so.  I’ll first start out defining what I consider to be an IDX, an IDX is the ability to show all the listings including other broker’s listings on your website.  Today’s consumer is online and has access to more information than they have ever before.   In the commercial real estate world there has not been a push to centralize all the listings and offer consumers a one stop shop to look at listings.  For a consumer looking for commercial property, there are a few places to look and they often don’t give then consumer what they are looking for, listings.

Where is the consumer looking NOW?

Let me explain what I mean by this.  One of the most likely places a consumer is to look is on Craigslist, looking at this database of properties it is very incomplete and only offers a very small amount of properties with limited information on the specific property.  I understand some commercial brokers have gone out and used html templates or services like Postlets, but by in large this is the exception, not the norm.

Moving on the next solution, a consumer might go to Google and type in “City Commercial Real Estate”, the consumer might find some of the more local companies or possible a link to a Loopnet Listing.  Let’s analyze both, so the consumer clicks on John Smith Commercial Real Estate or even Big Name Company Commercial Real Estate and then goes to look for properties on their specific sites.  The consumer will most likely only find a limited number of listings on each particular site, limited to the company’s own listing inventory.  If the company does not have a large inventory of that particular property and let’s face it not all companies are going to have a large amount of inventory for each property type, the consumer is not finding what they are looking for.  What if a company is a member of a local commercial MLS (multiple listing service) or CIE (commercial information exchange), by in large the MLSs only display a fraction of the data because most commercial real estate brokers are not members of the National Association of Realtors® and do not have access.  With a CIE, participation is dependent upon the local movement and most of them are not offering any type of IDX solution.

Incomplete Data?

Ok, now the consumer does not like those results and they have ended up on the Loopnet, site or for a lesser extent the CoStar Showcase site, so now there’re cooking right?  Wrong they start an account on Loopnet, log in, only to get a pop up asking them to be a premium member, as a basic member they only have access to only a small portion of the actual listings.  With CoStar it is even worse, the consumer really only gets to see the few “Showcase Enhanced” broker listings.  From all the brokers I talk with the success with CoStar’s Showcase service is nonexistent and with Loopnet it is a tossup with respect to lead generation.

In addition the next option for a consumer to find commercial properties is a consumer facing site like CommercialSource and there are many others.  While this offers a way for consumers to search commercial real estate listings available, the listing inventory is incomplete at best and does nothing for a broker to further their ability to identify their value proposition.

Why IDX will work.

Ok, so now why would a commercial IDX work?  Frankly, I think it would change commercial real estate.  Here is why, SEO now becomes important.  With a properly designed website, a consumer would search for City Name Commercial Real Estate and then your site could be one of the top ranked sites.  The consumer then clicks on your site is able to view “all” (a good amount) the listings in a specific area and for their specific property type.  In addition, it now makes your site more valuable and useful to the consumer because it is a resource hub and in turn creates true lead generation from the internet.

The 2 biggest challenges I get from other brokers about the success of a commercial IDX are: commercial real estate consumers are not online and the big companies will not let you have their data for their listings.  I believe both of these items to be false, similar to old wives tales.  The big companies are already giving their data to Loopnet and CoStar.  In the case of Loopnet they are most likely even paying to have their properties as a premium listing so that the general public and basic members can see them.  With CoStar they are giving the information to CoStar and then buying it back with access to their comps service and the other CoStar services like property advisor & tenant.  Hello, people where do you think they get the tenant data that they sell to the other brokers to help the “find clients”.  To me it is obvious that the brokers are not afraid to give their data away.

Commercial Real Estate Consumers are not online, right?  Just ask the secretary of the Doctor who is doing the Doctor’s search for new space.  Having listed medical space the actual end user never calls me it is always the practice manager or receptionist and they usually tell me something like this, the Doctor asked me to find them a new space for their practice.  Ok, maybe that example is juvenile and doesn’t pertain to YOUR type of business, look at both the success of both Craigslist and Loopnet, which has over 4 million members and tell me the consumers are not online.  Do you hear their cash register ringing?

Just my thoughts,

John Ziemba, White Tie Commercial

Many thanks to John for taking the time out of his busy day to provoke some conversation and put his opinion out there.

Commercial Real Estate IDX.  Now how about your thoughts?

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  • Before we talk about IDX, let’s talk about an adequate, centralized source for posting listings from which IDX will suck up and distribute the listings. The best so far is LoopNet, particularly now that it is compiling underlying property information. LoopNet’s advantage is that it is affordable, a paid subscription gives a listing exposure to brokers and principals in all markets (not hyper-expensive 1-market a la carte plans like CoStar). The only advantage CoStar has is in naming commercial tenants but I work only in multifamily so it doesn’t matter to me. Google and LoopNet give me good enough information about retail in areas surrounding the multifamily property.

    I use iMapp for comps because transactions are posted and analyzed within 48 hours of recordation with the county recorder’s office. It is an add-on to our local MLS (Arizona Regional MLS) which is the only reason I subscribe to the MLS. It is far superior for commercial properties to NAR’s Realtor Property Resource. And, because I have been using iMapp for several years, it has the advantage of having made the corrections I have sent it. All RPR has are the assessor, tax collector, and recorder’s tapes which are often incorrect.

    To me, the most important attributes of a listing resource are affordable access and ease with which the most potential “eyes” can see my listings. The most important attribute of a research resource is up to date information. As a back-up, I use reis.com’s rental and sales comps.

    When I can afford it, I will use Pierce-Eislen (www.pi-ei.com) as an almost-one-stop-shop research resource for multifamily. It rocks!

    • Nadia,
      Go girl…tell it like it is. Great points. Thanks

  • Re LoopNet premium member charges – that’s a way to qualify people. They’re not going to pay if they’re not really interested.

    Re limited info on broker sites – damn right! The broker is pushing their exclusives. If they can’t find what they’re looking for, it should be clear on the site they can call the broker for more. If they don’t want to make the call eventualy, then they can’t be that interested.

    Re IDX – nice that residential agents have a standard data format but a consumer is still going to have to go to FSBO sites to get all those “open” listings. Even if there was a commercial standard data format, it still wouldn’t capture non-exclusive listings…unless out of the goodness of their heart, some commercial brokers decided to enter all of those. Don’t think so…

    Re IDX part 2 – GoogleBase – though they have no “standard” commercial real estate category, theoretically, if all CRE brokers put their exclusives in GoogleBase the consumer – and brokers – could have a single source for listing data.

    • Chris,
      GoogleBase is a great idea…still the issue of a “Data Standard” your thoughts?

  • I like the idea, but won’t work. At least not if you’re a private company providing this IDX service. And you say we brokers give away our information. Not true. In fact, we are information jealous. If you truly understand our industry you’d know why CoStar doesn’t brag about it’s lease comps database, because it’s less than 30% accurate. In fact many agents never return their calls asking for info. We’re too busy making money and lease comps and market info are what offers us a competitive edge. The only way your IDX system will succeed is if you decide you’re an entrepreneur who doen’t want to make a profit and solely work for the best interest of brokers. You make the entire platform free and ask for a small donation to pay your staff and expenses. Sorry.

    • Well Andrew,
      He said that he is going to build it anyway…. ya never know…I have an idea…let’s start a thing called Twitter….nah never work!

  • Thanks everyone for taking the time and reading my post. After looking at all your comments, I thought it should be appropriate to respond.

    @Nadina, data standards in cre are an issue. This is one way to try to level the playing field. If I could take the raw data and make it into a usable source. I haven’t found loopnet’s comps program to be useful at all.

    @Chris, loopnet’s premium may be one way to qualify clients, but since a lot of my clients are mom and pops loopnet is a good solution for them. They simply don’t want to pay for access.

    @Andrew, I am from Chicago, if you don’t have access to comps in our area, you can’t do your job. I do realize that the quality of their records varies from area to area. Chicago has the most information in their whole database. I also disagree with you that the idea could not work unless I gave it away for free. I think if done correctly it could make internet marketing for cre a viable lead generation source. I believe it was you who just wrote a blog post that loopnet’s crowd sourcing for comps was going to change the industry.

    In life you can lead, follow or get out of the way. I will do my best to get this off the ground. The mountain is high, I will climb it and stake my flag on top and when I get there I can honesly say, I told everyone I was going to do it and I did it.

  • Been thinking about this topic lately and thought I’d weigh in – 4 months later!

    I think the industry is ready for an IDX. And I agree that brokerage firms want to share their data. I also think you need to separate tools for industry professionals vs tools for consumers.

    The reason I think the industry is ready for it has to do with the way the industry traditionally works.

    1. get a new listing
    2. send to my targeted prospect list
    3. publish a flyer and give it to all the brokers in my market.
    4. Other brokers show my listings to their clients/prospects and hopefully we get a deal done.

    Doesn’t an IDX simply enhance number 4?

    Regarding the willingness of a brokerage firm to share their content, here are the responses we get:

    1. Sure. We’ll send you our data feed. More exposure is good.
    2. Okay. Can I export from Lupelink? No? Why? Okay we’ll put it in excel but its going to take awhile.
    3. Here’s my Kostar contact. Can you get it from him? No? Okay we’ll create something up for you.

    The data sharing/distribution challenges are tech hurdles.

    I think these data challenges are a good sign. There are more choices and places to display listings and brokerage firms are dealing with multiple requests. And there are good enough data standards (from my perspective). Its a real estate listing not a health care record.

    The concept of complete market listing data is never going to happen. It requires 100% participation.

    Again, I’m looking at this solely through the lens of lead generation/marketing. And perhaps there are other concerns I’m missing.

    And no doubt seeing my listing on a competitor’s website looks strange. But its really no different than what’s happening offline – you just don’t see it.

    • Alan,
      Great points! Hard to argue…but!!!