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“Loopnet: Where Deals Go To Die.”

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On the road and on the road some more.

And oh, the conversations I get to have.

I sometimes wonder if it’s because of my style of writing and obvious disdain for the pathetic norm that opens people up when they talk to me.

I do think that some are guarded because they think it will end up on this site for thousands and thousands to read.

If you think back when has something negative like that happened?

Why would I not encourage openness and frank helpful conversation?

Getting to the point.

I have been in many conversations lately about “the market.”

When I say the market, I am referring to a local market by definition.

It could be Chicago, Nashville or LA for that matter but regardless of the city it’s always “the local market.”

The effect that technology may or may not be having on a specific market is always a topic.

The amount of inventory and the pace of the absorption is another.

And of course, the market rates.

But lately another topic has been dominating the conversation and that is “off-market deals.”

I have even heard the off-market deals described as “the actual market.”

Or to quote someone anonymously “Off market is the market.”

We all know there is what most people call the gray market.

The gray market is data and deals that most people know exist but is not part of the market until it has a relevant piece of data that influences that market in some way.

Scenario 1:

Broker A has a long term relationship with building owner B. Out of nowhere the owner decides to push a spectacular asset. Broker A makes two quick calls and finds out it’s hotter than he thought. He makes three more calls and now has four hot prospects. He fields three quick verbals and tells the owner he made get a deal on paper and the number they wanted and then some with a short cycle to close.

Now I ask you.

Is that deal on or off the market?

What makes it a “market property?”

Scenario 2:

Broker A has a long term relationship with building owner C. They have been working together to market a property that just will not get any solid prospects no matter what strategy they use. Broker A has shopped this asset to everyone in his and his firm’s database, at least, three different times. He has tried all kinds of combinations of pricing and asset valuation models to try and create a fit that will justify the asking┬ánumber for the asset. To no avail. Broadcast emails, IDX and CRMLS positioning to get more eyeballs and interest. Flyers, social internet selling and flat out cold calls. But nothing is working.

Now I ask you.

Is that deal on or off the market?

What makes it a “market property?”

The market has responded to both scenarios above.

What is the actual market?

Is the actual marketing of a property to the entire available market creating “the real market” even though the asset has shown it has not matched the definition of market value?

Is it that cut and dried?

So why the title ” Loopnet: Where Deals Go To Die.”

That is not my quote. I said it did not come from me.

It came from a broker in one of the top ten markets in the US.

His position was that if you do your job and do it well, you will never get to the phase of marketing that will require you to post the asset on Loopnet.

His definition of the market did not include LoopNet in any way shape or form.

It is not the real market.

It’s just……

“Loopnet: Where Deals Go To Die.”

 

+1 Ironically, I had lunch with the original founder of Loopnet last week. What a great, helpful and inspirational guy!

 

 

 

 

 

 

 

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  • nadinac

    Deals might be going to die on LoopNet because, since CoStar now owns it: 1) the monthly tariff to be a “premium searcher” is obscene so who knows how many eyeballs your listing is NOT being seen by; 2) the searches that do come up for a non-premium searcher, at least in the Phoenix market, are sufficient in quantity so that the message from LoopNet, “you are missing 22 searches by not being a premium searcher” is kind of irrelevant; 3) who the hell can figure out the characteristics of those listings which are invisible so no motivation to pay the extra freight; AND 4) who the hell would want their listing NOT seen by as many eyeballs as possible? I am a LoopNet premium lister but I wonder if my listings are being hidden from a group of eyeballs. Finally, the search refinements for the non-premium searches are insufficient, unstable, and, in the new but bizarrely unimproved interface, it is difficult to control what one selects. It wasn’t broken and they broke it. It’s the CoStar way.

    • Elliot Garcia

      Time to switch to Xceligent!

  • Dan

    This is another example of an all or nothing methodology that never pans out as both sides manage great arguments. Never publicly advertizing any real estate, commercial or residential hurts odds of selling at higher range within market tolerances. If the property is an actual value, it will sell. “Hey world, here’s a deal you can get at 90% of market value.” Sold.

    No development of a sphere to call on with new a property also hurts speed of transactions. Nobody would appreciate a call from a buddy who has property for sale at higher than the highest range on market tolerances. “Hey friend, here’s a property 15% higher price than anyone has paid to date.” Click. “hello?”

    LoopNet, CraigsList, Ebay, MLS, is where overpriced “undeals” go to marinate until pricing matches market range of Win/Win(+-12% of market tolerance)…price pushed down meet market or value grows to meet pricing.

    Not many things are all or nothing, certainly not marketing a high priced commodity.

  • Kathleen Howard

    Caveat: My office is located within the Coachella Valley (Palm Springs; Indian Wells; etc), a market that is often counter to most others . . . We have both Costar and “all you can eat” Loopnet extensions. Costar/Loopnet suggests that we market our listings on Loopnet and do our property searches and research on Costar. That said, I checked out this idea by doing the same property search on both and Loopnet was 100% correct in its results vs. a paltry a correct rate of only 20% on Costar. The provider blamed this on our being in a terciary market. Since then (last month), they say that they have increased the number of researchers so that results should be much better.

    CRE leasing is important because it creates the value for our sales. About 20 – 25% of our lease leads are from prospective tenants doing their own research at night . . . and that is why we pay to be unlimited premium users. We pay the cost of Costar because we need the market info and the sales comps. I nonetheless check almost all search results. Yeah, I know it’s a pain, but until they start living up to their stump speech, it is something we do to protect clients and prospects.

    Now for the “graveyard” aspect . . . the very old “listings” can be a good source of “off market” finds. Why? Because if the owner doesn’t know that his property is still on Loopnet; and his “listing broker” died of old age back in the nineties, the (yes!) this is an off-market property and a possible good value-add deal.

    In part, I believe that this is one of Dan’s points below.

  • nadinac

    My comment regarding the hype of “off market” properties is that once someone says they are open to selling their property, it is on the market. If you want to call it a “pocket listing”, unrepresented seller commission agreement (bring me a buyer at my fantasized price and I will pay you a commission), or I only want to do business with the folks who do business with my buddy broker at GotRocks Corporate Brokerage, the property is still ON the market. Aren’t you special — you and your clients are in the “in” group! So let’s call it an “unadvertised special” — like the surprise of lower priced grocery or health/beauty items that didn’t appear in the weekly shopper section (and, for some stores, online). “Value Add” another form of marketing hype — euphemism for poorly managed but overpriced anyway.

  • Thomas Morgan

    The best brokers use “both” markets. The very nature of being a broker is connecting the dots from all the different data sources we have. The data sources are not just web based but in the wheelhouse where intuition, serindipity and skill converge. Certain deals require the people and connection network and others require the slogging through 100’s of properties online. I agree that the market is both, off and on, word of mouth and public data combined. Then the results of closed transactions tell us where the “real market” is.

    (And as a side note, the LoopNet Costar monopoly is doing all of us a disservice. What ever happened to anti trust regs? Kudos to RealMassive, Xcelligent, The Broker List, Property Blast, etc for providing us alternatives. And, watch out, Auction.com has a new fancy name, Ten-X, and millions of dollars and talent from Google ventures to back it up. I can’t help but think this is going to get exciting!)

  • Bernie Fallon

    Also, I just saw an illegal listing on Loopnet (no permission to post/exclusive) is not governed by them. I was told “it is a user controlled website and up to the poster to remove”. I have no further interest in the new conglomerate and their huge fee increase.