For readers too young to know what “Does Macy’s tell Gimbels?” means, Macy’s and Gimbels were department store rivals located within two blocks of each other in New York City. The rhetorical question meant that competitors don’t tell each other their business plans. Gimbels is out of business, and it wasn’t the internet that put them under. Macy’s is staggering, but holding out hope. But, this post is not about the threat to retail from the internet. You can find out more about that from the #LetsGetSmart talks by Cushman & Wakefield’s Pam Flora and Liz Holland of Abbell Associates.
This post is about the sharing of information in the commercial real estate brokerage industry. As a former student of economics in college, I remember reading about perfect information. Wikipedia defines perfect information as follows. “In economics, perfect information is a feature of perfect competition. With perfect information in a market, all consumers and producers are assumed to have perfect knowledge of price, utility, quality and production methods of products, when theorizing the systems of free markets, and effects of fiscal policies.” The stock market is the closest thing we have in our economic system to a market with perfect information. The residential real estate market is far ahead of the commercial real estate market in providing information to consumers (buyers and sellers, landlords and tenants). Not only is there Zillow and Trulia, but many brokers have an IDX, short for Internet data exchange, from their Multiple Listing Service on their websites so that potential customers can see what is available, and use their trusted agent to represent them in their transaction.
That kind of data feed is very rare in the commercial real estate world. There are of course listing services like the industry leaders CoStar, LoopNet, but they are very protective of their data, making it expensive and difficult to share. Xcelligent is working diligently to be a 40% less expensive and more open version of CoStar. Xcelligent and CoStar are embroiled in lawsuits regarding data theft and anti-competitive behavior. In the meantime, the brokers, buyers and sellers, and landlords and tenants are left behind with imperfect information. Some will say that this information asymmetry give those with better information an edge, and perhaps it does. However, as agents, our duty is to our principals, and perfect information serves our principals’ interest.
Yesterday, I happened upon this article from 2010, Does Commercial Real Estate Need IDX? on DukeLong.com. It was written by John Ziemba, whose LinkedIn profile describes him as a Social Media & Internet Marketing Specialist, Visionary in the Real Estate Industry. I’ve never met John, but his article obviously got me thinking. What if I could use QuantumListing’s Search Page to pre-populate a search, copy the URL link, and use that on the Perlmutter Properties website? I don’t have much technical expertise, but with what little I know, I thought I could pull it off. And, I did. There are several ways that users can deploy sharing widgets from the QuantumListing website, but this is something a little different. The solution I came up with used an iframe to show a QuantumListing search. I could have gotten an upgrade to the WordPress Plug-in I used on the Perlmutter Properties site that would have let me focus on part of the page so that it wouldn’t show the QuantumListing header. but for my cross promotion of the QuantumListing brand, I decided to leave the header. Click HERE to go to perlmutterproperties.com and see how the strategy was implemented.
I decided to reach out to John Ziemba to thank him for his article and to see what his current take on the subject is.Thankfully he has a pretty unique last name and I was able to track him down pretty easily through the internet. I left a message for him, and he called me back within a few hours. John said that he thought that commercial real estate was equally in need of an IDX today as it was when he wrote the article. He works in the Chicago market, and they have a terrific MLS there with a fairly robust amount of commercial listings, particularly in the multifamily arena. He created a website of his own, apartmentsforsaleonline.com using the IDX feed from the Chicago MLS. He pointed out to me that one of the unique features of this type of MLS IDX feed is that it provides all of the listing details from the MLS other than who the actual listing agent is. I understand and respect that this is the standard for MLS services and that the agencies’ agreements with the MLS allow for this. The buyer’s agent still has to go through the seller’s agent and share a commission.
I’m not sure that the commercial world is quite ready for that, at least not in the Metro New York market where Perlmutter Properties operates. My jury-rigged version of an IDX still has all of the contact information for the listing broker. Without an agreement from the listing brokers, I would not feel comfortable providing this type of information stripped of its exclusive agent. I’m willing to rely on the reputation of my brokerage company and agents to allow people viewing the listings on my site to determine if they’d rather pursue the listing with us or the listing agent. My experience has been that commercial real estate is collegial and that most brokers would rather get a half a pie than no pie at all. Even the international firms that used to make buyers’ brokers get their fee from their buyer are more open to sharing commissions than in the past.
It will be interesting to see in the coming weeks how the local market reacts to the Perlmutter Properties/QuantumListing experiment. Will there be an SEO advantage to either Perlmutter Properties or QuantumListing to providing this information? Will Perlmutter Properties get any customers asking to follow up on other brokers’ listings that they saw on the Perlmutter Properties site? Will any other existing QuantumListing customers want to deploy a similar strategy? Will it help QuantumListing gain any new customers? Will other commercial brokers be upset about this? Does Macy’s tell Gimbels? I don’t think they do, but I’ve placed a bet that they should.