I am in the middle of doing the preliminary work before posting a listing of a 2-story, 12K SF office property located in a very nice office park, 3 minutes from a major freeway on/off ramp. This property has been listed for sale and for lease for almost a year with a branch of one of the big dog national (international?) brokerages. In that time there have been almost no tours of either prospective tenants or prospective buyers.
The owner will just be notifying the current broker of the 30-day cancellation period next week. So everything that broker has done to market the property is likely to still be online.
What happened? To begin, I checked the CoStar listing. Oh, hmmm: the name of the building on CoStar is the name used by 2 owners back. The tenant list is totally out of date and incomplete. There is a floor plan but no lease stack. The vacancy rate is severely incorrect – by 50% too large. Then I checked LoopNet. Didn’t show up. So I checked every single commercial real estate listing site I have previously used and some I added to update my efforts (total 19 to date). Nada.
Then I asked my client-to-be what he knew about his current broker’s marketing efforts (he bought the property as an owner-user, sold the business and when the single tenant business buyer moved out after 3.5 years, the client has been a landlord to multiple tenants for approximately 2 years beyond that). He said he asked his broker about LoopNet and the broker told him that listing on LoopNet isn’t necessary because everything on LoopNet is also on CoStar and vice versa. (Causing me to experience a very unhealthy blood pressure spike!)
So I wrote him an e-mail that listed all the CRE listing sites his broker did NOT use to market his property and explained why he must insist that his listing agreement be canceled immediately, the prospect list turned over to him immediately, and the termination agreement waive the 180-day broker’s right to a commission immediately.
The next day, I wrote the following explanation of why listing/marketing only on CoStar is broker malpractice: “I’m not sure if you know the full limitations of marketing only on CoStar: its subscriptions are quite expensive ($500/month per agent in small brokerages in the Phoenix market) and are offered by CoStar’s individual market areas which are only large urban markets. CoStar requires that each agent in an office that has a contract subscription to CoStar be a subscriber and if the agent leaves the company during the contract year, the company must still pay for the individual’s subscription. So smaller brokerages limit themselves to subscribing only in their own market. Anyone can list a property on CoStar in any of the markets it serves; nobody who isn’t a paid subscriber can search for properties or vacancies on CoStar and then paid subscribers can only search in their subscribed market. Therefore brokers who are not located in a CoStar market are shut out from finding an out-of-market opportunity as are buyers and tenants on their own. Thus, listing on the “open” and usually very low-cost websites exposes a property to potentially thousands of pairs of eyes from all over the country. Research shows that unrepresented buyers and tenants are likely to begin their own searches on the open sites and contact a broker once they have found a property that interests them. Limit to CoStar and a property like yours will miss a huge number of potential buyer or tenant prospects. Added is the fact that several of the open sites track and supply listers with eyeball statistics for each of their listed properties and some even provide the contact information for the people who own those eyeballs and CoStar does not.
Duke, can you or any of your readers give me a rational explanation why someone would take a listing and only market it through CoStar and fail to expose it to hundreds (thousands) of pairs of eyeballs on 20 other reasonably priced or even free CREweb outlets that a property could be exposed on? Am I missing something? Is it a case of “we have always done it that way” or just of “I don’t give a f**k”?
+1 And your answers are?