Is Commercial Real Estate the Next Industry to “Blow Up?”
May 07, 2014
Finding ways to change how we do things by using online tools is what new technology firms solve. Over the years, emails have replaced the US Postal Service and Amazon has replaced the need for stores like Montgomery Ward. Techies like to use the phase “we are looking for traditional businesses that are in need of a “blow up.”
Now there are new firms that would like to “blow up” commercial real estate. Jones Lang LaSalle (JLL) has backed a new venture called HiRise. The company describes itself as “the first online transactional marketplace for commercial real estate, enabling companies to search, plan, lease and pay for the space entirely on their HiRise website.”
The website is set to feature an automated planner that offers “by the seat or by the suite” analysis. This feature allows tenants to virtually fit a number of employees into an available office space.
The company plans to target tenants who need spaces of 5,000 square feet or less. According to HiRise, more than 500,000 American tenants occupy such spaces.
Initially, the platform is rolling out for landlords and tenants in the Washington, D.C. area, but the firm also plans to expand across the U.S. The website is supposed to launch sometime this month.
The company notes in the Washington area small tenants outnumber large tenants by two or three, yet more than 46 million square feet of small space remains vacant because traditional leasing policies cater to large tenants.
In addition to HiRise, there are a number of other firms looking to enhance the way tenants search for space. TenantBase is another site that is trying to streamline the leasing process. 42Floors is also trying to create a direct link between tenant and spaces.
As salespeople, should we be worried about this? Could we be deemed unnecessary? If you look at other traditional firms such as insurance sales and travel sales, both businesses have seen a real reduction of salespeople replaced by online tools. What makes commercial real estate different?
I would say we are not going away anytime soon. Why? Because these sites forget that we are a commodity- based business. We actually provide services. Sites like HiRise can create a simple process to secure space, but until you see it, understand the building, where it is located and how it compares to other buildings, you cannot possibly make an informed decision to move your offices. That fortunately requires people on the ground who care, advise and direct. My advice to these websites, go look to “blow up” some other industry. Commercial real estate is not going to be changed as easily.
Photo Credit: gregorywass via Compfight cc
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Written by: Hans Hansson
Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 29 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email firstname.lastname@example.org or call him at (415) 765-6897. You may also check out his website, www.commercialspacefinder.com.