While a few real estate companies are impressively techno-savvy, they are few and far between. Industry experts concede that there is a wide gap between where real estate executives would like to be and where they are today in technological terms.
But that is not due to a lack of opportunity, according to Claude Werner, assistant director of the National Center for Applied Real Estate Research and Technology at Deloitte & Touche Real Estate Services Group in Atlanta.
"There is an enormous amount of opportunities for real estate companies to improve their technology opportunities," Werner says.
So what is holding companies back?
According to Peter Pike, president of the PikeNet Directory of Commercial Real Estate (www.pikenet.com) of the San Francisco Bay, "It is fear-motivated. The real estate industry is not very technology-oriented, but very relationship-oriented."
But that will change as real estate professionals realize that technology can enhance relationship building and communication between employees and clients.
"People are beginning to appreciate that technology can be relationship-oriented," Pike adds. "E-mail doesn't replace (standard means of communication), but it is another subtle and effective way to reinforce relationships and a way to help create new ones."
But Pike concedes that his views are somewhat the minority in real estate.
"Ten years ago people didn't think fax machines would be of use," he says with a laugh. "Today they can do without e-mail and websites, but not for long."
Real estate industry slow to change Projecting into the future, however, does not give an accurate portrayal of where the real estate industry is today. And, according to Richard Davis, director of Information Services for The Richard E. Jacobs Group of Cleveland, Ohio, it's a matter of not investing enough resources in technology.
"There are a lot of behind-the-scenes stuff to make it work, and it's a hurdle," Davis says. "So yes the real estate industry is slow to adopt technology. Most haven't made a large enough investment to be able to capitalize it."
The Jacobs Group uses a network database to manage all of its record-keeping involved with the 38 shopping centers it owns in 15 states. Jacobs isn't considering placing this information online because of "security issues."
Internet makes life easier The Jacobs Group does leverage the Internet for marketing purposes, however. "Websites are used for marketing information, providing information to consumers to encourage them to shop," he says.
With its website, www.shopyourmall.com, the Jacobs Group is able to effectively supply more information about its malls and encourage shoppers with discount opportunities and coupons.
"We provide a directory of shops and highlight special activities and sale-related activities," he says. "It (website) makes the process of making a choice of going to one of our malls an easier decision to make."
And consumer realtors are also leveraging these marketing opportunities via websites, he adds.
"In the housing industry, it allows preliminary shopping electronically," Davis continues. "The web has better pictures (than print) and more information can be given so consumers don't have to go traipsing around in the rain."
But do these Internet marketing sites actually make the day-to-day life for real estate executives any different?
It has for Randy Hall of the Batson-Cook Co., a general contracting and construction company based in Atlanta. Hall is the project manager, overseeing the building of a 1.4 million sq. ft. First Union Bank building in Charlotte, N.C. In order to better manage the project, Hall had a "WebCam" installed on the top of a 42-story building adjacent to the site. The digital camera has a zoom lens and is attached to a swivel mount. Through a phone line connection, pictures are instantly published onto the company website - www.Batson-Cook.com/ThreeFirstUnion/.
"This is the first time that Batson-Cook has used a WebCam," Hall says. "It is really changing what we do in a number of ways."
He adds that it has greatly helped communication between himself and the field engineer. And developers, clients, architects and other interested parties can log on each day to monitor the success of the project.
This type of change within real estate is slowly rippling into other areas, according to James Tudrick, director of the operations, mining and real estate division of JD Edwards.
Benefits of intranets & extranets "The nature of real estate is changing, especially in the large-end organizations," Tudrick says. "With the combining of organizations - mergers and acquisitions going on - it has affected information systems."
These "megacompanies" now have more of a need to tap into the ease of communication that the Internet provides.
"Large publicly traded organizations have large numbers internally to communicate with," he adds. "Many companies are now international in size with worldwide properties and thousands of employees to communicate with. The real estate industry is not used to that."
Intranets, internal websites for employees only, and extranets, sites for clients and employees that are password protected, will be used more in the future, Tudrick predicts.
But, of course, many in the industry do not trust that others will not be able to hack into their systems.
"Extranets with the locks and hooks and structures are needed," Tudrick says. "It's a new world for them. Their fears are security-driven because it's very sensitive information to post via the Internet."
In comes the fearless But some companies are doing just that. One visionary company has been designing online databases for its clients for up to five years now - Metrospace/CRESA (www.metrospace.com).
With a three-man IS shop and 10 years of hard work, Metrospace of Los Angeles has carved out a niche for itself as a technology-hip corporate real estate service adviser with the ability to track leases, projects, pending deals and much more, via proprietary Internet databases.
And their persistent commitment to technology has paid off nicely, according to Gerald A. Porter, president and founder of Metrospace/CRESA.
"We've doubled in volume and grown by 30% to 40% in revenues every year for the last five years," Porter says. "It has been an eight- to 10-year commitment to technology."
While Metrospace provides strategic planning, lease administration, project management, tenant representation, marketing services and consulting services for their clients, each client is provided a unique database to help them manage their portfolios - free of charge, Porter says.
"We implemented Lotus Notes databases, and we have a lease administration database that tracks clients' leases and keeps up with all contacts such as the landlord and property manager," he says.
The last component of the database concerns is communication and contact information. "Through the contact database, you can track who the building manager is or an on-site person or someone in facility management," Porter adds. "It is a resource for clients and all of the client's particular departments."
And since each database is tailored for each client's unique needs, other fields for internal communication can be added.
Consolidation means integration Werner works with ROSCO - the Real Estate Operating Systems and Consulting group of Deloitte & Touche that helps companies implement technology initiatives. And while Werner's clients are interested in technology, many have recently merged with other companies or been acquired by REITs, and they have other pending issues to deal with.
"The consolidation of private companies in the past year (have slowed companies down)," Werner says. "Fifty private companies were absorbed by the REIT industry and these companies had assets of $100 million to $600 million. A lot of these companies didn't have much in technology or at least not state of the art."
And after consolidation, the REITs began the challenge of integrating the companies.
"There is a lot of interest in technology in general, but the biggest problem is making sure that they get the numbers - accounting information and internal issues (in order)," Werner says.
But integration will eventually be finalized and, as Pike suggested, this public information will become readily available online through various company initiatives.
But Werner warns that a "Bloomberg" for the real estate industry is still far in the future. "TeleRes was a big venture launched by Dow Jones. It focused on real estate information, and I don't think people were ready to pay for that information," he says, adding that the product went under August 1997.
"A company that tried hard and had a pretty good system didn't make it," he adds. But Realty Information Group (RIG) of Bethesda, Md., is vying to prove Werner wrong. The company that boasts being "the nation's largest provider of information services to the commercial real estate industry" went public July 1 (Nasdaq "RIGX") and is now in a quiet period.
According to their prospectus, the company indicated that it will begin to provide information for the retail, multifamily and hotel industries. The company also mentioned future acquisitions and addressed their recent attempt to purchase Jamison Research Inc. of Atlanta. While the company may re-attempt to acquire Jamison, RIG states that it hoped to incorporate Jamison's clients in Atlanta, Dallas and New Orleans into a new division of RIG entitled Jamison Advisory that would cater to the Wall Street industry.
According to a company press release, "Jamison Advisory will provide institutional investors, advisers, Wall Street analysts, developers, brokers, managers and the media with consistent, third-party analysis of real estate trends in each of the major U.S. commercial real estate markets."
But whether or not RIG will attempt to launch a similar product as Bloomberg is uncertain.
And while Davis and others in the industry are fairly conservative with using technology, they do see it as the way of the future. "It (real estate industry) has changed quite a bit. The real estate industry is recognizing that the way they have done things in the past is not how they have to do things in the future."
Projecting into the future, Peter Pike saya there are five components within the real estate industry that will evolve technologically in the next five years.
1. The active use of e-mail.
2. Using the Internet for research and to gain public information about competitors.
3. Web-enabling reporting - where real estate companies place internal reports, management reports, REIT information, due diligence information and physical plans on extranets. (Extranets are websites where company clients and interested parties, who have been given access, will be able to view it online.)
4. Online tenant relations using the internet as the primary communication tool. Pike predicts that tenant/landlord sites will contain maintenance requests, areas to make payments and even newsletters where new tenants are introduced and other property issues are discussed.
5. E Transactions - Electronic commerce. Pike foresees that companies will begin to buy more supplies online and bid for projects online as well.