real estate broker Gerald Rohm was in early morning San Francisco traffic. His mind was already racing ahead to the day's tasks. He had property to locate for an eager commercial client, and he didn't have time to waste. Then he saw it on the corner: the perfect space for his client.
However, he did not have to wait to reach his office. Instead, he quickly picked up a cell phone and dialed not his office, but the Internet - via a wireless application protocol (WAP).
Within seconds, information is scrolling across the phone's tiny screen: 150,000 sq. ft. still available on floors two and three. A quick call to another broker, and a deal in the works.
This scenario has not happened yet, but according to Rohm, within months it may be a common business practice for Los Angeles-based CB Richard Ellis.
Changes are sweeping through the commercial real estate industry that promise to transform the way brokers and their clients do business. Just ask Rohm, a director of portfolio services operating out of CB Richard Ellis' San Francisco office. He has been at the forefront of what many believe is the first closed-bid sale of large commercial real estate to be conducted using the advanced resources of the Internet.
When Seattle-based Washington Mutual announced an agreement to acquire Irwindale, Calif.-based H.F. Ahmanson and its Home Savings of America subsidiary in 1998, bank officials said 150 properties would have to be closed, marketed and sold.
When Rohm and his team made their pitch for this deal, they presented a demonstration version of a Website they would use to help sell the properties. The bankers liked what they saw: a property catalog that anyone with Internet access could use.
The wave of the future? The final product contains individual displays of all 150 properties. "You can look at the site, see how large it is and get directions on how to get there," says Rohm. "You can see which broker is handling it, when the property is going to be shown and what the demographics are. It also includes an e-commerce component, which allows you to order property information online. You'd get the information within 24 hours."
The site has been a roaring success. Within eight months of taking the assignment, CB Richard Ellis has sold, terminated or sublet 80% of the portfolio. Rohm expects all of the properties to be sold or leased by early 2000. In addition, the properties have moved faster and at a higher square-foot rate than expected.
"There were elements of the sale - primarily distribution of property information - which we could automate," says Steven D. Ritzi, whose Portland, Maine-based advertising, marketing and consulting firm Steven D. Ritzi Associates created the site. "Using the Website shortens the entire transaction cycle because it's an incredibly efficient way to transfer information between sales force and purchaser."
The philosophy behind the site was to "keep it simple," says Rohm. "It's based on a point-and- click [system] as opposed to a database system ... It's easier for people to navigate."
The idea of creating an Internet property catalog grew out of discussions between Ritzi and CB Richard Ellis. Ritzi explains that his company had done a great deal of bank-oriented work in the Northeast, including many conventional types of projects such as newspaper ads. This project presented the opportunity to go beyond that.
The site was created quickly. "The development cycle was short - from start to finish [it took] a little more than two weeks," says Ritzi. He had already done a number of freestanding sites for leased properties, so his firm was well aware of what was required to market property in cyberspace.
The entire site was "built without one (face-to-face) meeting." says Rohm. "We did it by just talking on the phone, e-mailing things back and forth and putting up splash pages."
"I think this was the first time this [a Website] was ever done for this particular type of sale," adds Ritzi.
Ritzi and CB Richard Ellis both knew they needed an integrated marketing plan. Listing the Website address in printed promotions for the properties was an important step. "Additionally, property signs have the Website [address] on them," says Rohm.
Just how far can automation on the Internet be taken as it relates to the commercial real estate market? "It really depends on what the market is willing to accept, and that's changing every day," says Ritzi. "Commercial real estate has been slower than most industries to accept the Web as a tool."
Ritzi notes that the residential real estate market is already highly automated, giving buyers the opportunity to bid for properties online and apply for mortgages.
Internet technology has made "more, better, faster" a mantra, says Craig Stevens, CB Richard Ellis' e-commerce vice president.
"Take our [real estate] appraisal unit, for example," he says. "Basically they're converting their whole business process to the web. Everything from the moment one of our large institutional clients orders a real estate appraisal ... will take place online."
The real estate broker in the new world of the Internet should have a finely tuned array of technology skills. "All of us are going to have to be capable of using the basic level of tools out there - e-mail, Word, Power Point," says Stevens.
The role of the broker? The Internet will ultimately mean much more than just putting a property catalog online. It will empower buyers. "The client will have access to someone who will not only be able to go out and pitch and sell very effectively, but who also is going to be able to provide very accurate analysis that hasn't necessarily been part of the transaction in the past," says Ritzi. No longer will they have to rely solely on the research skills of the broker.
"So the question becomes, 'What is the ongoing role of the broker?'" says Stevens. "At a minimum, they're going to be compensated for their advisory capability, which is directly related to their skill in interpreting the data."
Internet-driven technology is preparing to sweep through this industry. It may bring unsettling new realities for some, but for CB Richard Ellis and others, it may present new and unprecedented opportunities for success. Where the changes will ultimately end, few can say.