Auction.com recently announced some big changes ahead for the company, including a name change to Ten-X and major expansion of its online property sales transaction platform. NREI talked with Ten-X Executive Vice President Rick Sharga to find out more about how the online investment sales industry is evolving and what lies ahead for the company.

NREI: Your firm recently announced that it would rebrand the company from Auction.com to Ten-X. Why the new name?

Rick Sharga: I think we had to change the name of the company because the company is fundamentally changing and it’s changing in two ways that made our old name a little too limiting as we move into the future. On one hand, auctions have historically been associated with the disposition of distressed properties. Increasingly over the last two years we have sold more and more high quality traditional properties and fewer distressed assets.

NREI: Do you have any statistics on that shift?

Rick Sharga: When we started it was 100 percent distressed and 0 percent traditional. When we closed 2015, about 60 percent of the assets that we were bringing to sale were traditional, high quality commercial properties. We believe that that percentage will continue to grow for two reasons. One is that there is less and less distressed inventory to sell as the market has recovered. The other is that success sort of breeds success. So the more of these traditional properties that we are able to successfully sell, we believe that more of them will come through our platform.

NREI: Do you think that growth is also a reflection of the industry evolving and getting more comfortable with doing transactions online?

Rick Sharga: I believe that the commercial real estate industry is probably adopting technology solutions a little more quickly than the residential market. Partly, that is because we are dealing with more sophisticated buyers and sellers, and partly because we are dealing with fairly expensive assets that benefit from the broadest possible exposure that you can get for them. Our internet marketing platform has allowed us to expose these properties on a global basis. We have had people bidding on the website from over 100 different countries. In fact, we know that more than 50 percent of the properties that we sell are sold to people from outside the state where the building is located.

NREI: You also plan to introduce new transaction platforms that will give sellers the option of using a non-auction process online. Can you describe how that non-auction platform will work?

Rick Sharga: This goes back to your first question where I said there were two reasons why there was a need to change our name and this circles back to the second one. Historically, the only way you could buy a property through our website was using an auction process. We believe there are some buyers and sellers who would be more comfortable transacting online if they had a process that was more similar to what they are used to doing off-line. That is really what we are doing in the commercial space, taking a lot of the processes that people are comfortable with doing off-line and moving them online where we can bring along the transparency, the efficiency and the ease of use that the Internet can deliver.

NREI: And the new platform is going to fall into three buckets—Ten-X Commercial, Ten-X Homes and Auction.com?

Rick Sharga: That is correct. Ten-X Commercial is where we will drive people to buy and sell commercial assets. Ten-X Homes is going to be for move-in ready residential properties, and Auction.com will continue to service residential real estate investors with the types of properties that they are looking for.

NREI: So how will the Ten-X Commercial platform be set up?

Rick Sharga: I think the big difference is that it won’t be an auction bidding process. We will continue to do online auctions and custom auctions. We also will have an open offer platform where people can see what criteria the seller is looking for in terms of price and financing and closing period and customize their own offers to get in front of the seller. The seller will have the opportunity to compare multiple offers from multiple buyers.

NREI: When will these platforms be live and ready for sellers to access?

Rick Sharga: It will be demoed live at the South by Southwest conference in Austin in March. Our sales after that event will be conducted on the new website.

NREI: Ten-X has also said that it plans to announce programs for residential and commercial real estate brokers in the first quarter. Can you offer any additional details on what type of program you will be introducing for commercial brokers?

Rick Sharga: I can’t give you specifics because we are still finalizing some of the details. But the point we want to communicate is that what we have been doing, and what we are planning to do, is not intended to disintermediate brokers from the real estate transaction. We actually view commercial brokers as business partners and customers, and we believe that especially when we start to get into these non-auction product offerings, brokers will be able to play an even more integral role in future commercial real estate transactions online. So the programs we will be rolling out will basically be helping brokers figure out how to work with us and what the benefits are.

NREI: How competitive is the online transaction space currently? Are there other players?

Rick Sharga: Our biggest competition at the moment is inertia. It is difficult to change entrenched behaviors, and real estate transactions have been done basically the same way for the last few hundred years. That said, it would be foolish for us to say that no one is going to come online and try and replicate what we’re doing. We are looking at a $1.8 trillion marketplace between residential and commercial sales. We currently handle a tiny fraction of that. It wouldn’t surprise us at all if 10 years from now almost all of these transactions are being executed online.

NREI: Is there anything else your firm is doing to strategically position itself against current or anticipated future competition on the online sales platform?

Rick Sharga: Ironically, some of the things that we’re doing to strategically position ourselves sound like old school as opposed to something that you would expect a technology-driven company to do. Last year, for example, we established a hospitality division and brought people on board with decades of experience helping people who buy and sell hotels do so successfully. We recently launched a self-storage division, and we are looking into having our platform work more effectively for triple net lease product. So that and establishing what we hope will be very strong relationships in the broker community are all geared toward giving people great comfort that our platform is a safe, easy and effective way for them to buy and sell properties online.

NREI: So where does the name Ten-X come from?

Rick Sharga: We went through over 500 different names when we decided it was time to rebrand ourselves. What appealed to us about Ten-X, other than it is pretty easy to remember and unique in our industry, is it is sort of aspirational. We believe it connotes the idea that we can make things exponentially better for people who buy and sell real estate—that what we’ll do is 10 times better than anything they have done before when it comes to buying and selling commercial assets.