Over the past few years, more than $100 billion worth of assets has been sold through the Peracon Network, an online platform used by more than 120,000 professionals and 50,000 organizations involved in buying, selling and holding commercial real estate. The network serves as a single location for all information related to asset acquisition, financing, due diligence, asset disposition and ongoing investor relations reporting. Via the Internet, real estate professionals can exchange information in a secure environment – offering materials, due diligence information, and closing documents.
Among those deals: The largest single-asset transaction in U.S. history — last year’s $1.72 billion sale of the MetLife building in Manhattan. Even Tishman Speyer and Blackrock are using Peracon to finalize their $5.4 billion acquisition of Manhattan apartment complexes Stuyvesant Town and Peter Cooper Village.
Peracon CEO Brian McGowan hopes that the Peracon will eventually become the standard for investment grade real estate transactions — what the New York Stock Exchange is for securities listing and trading.
NREI: How has Pericon evolved over the past five years?
McGowan: Peracon was focused solely on helping investment sales professionals. For example, the Capital Markets Group of Cushman & Wakefield in New York used our platform to manage the disposition process of the MetLife building in New York. After Tishman Speyer placed the property under contract, they asked Peracon if we could make a copy of the same information they used during the investment sales process to facilitate their due diligence and underwriting. That request showed us that this kind of platform was important for the entire buy-hold-sell investment lifecycle. It was also the genesis of today's platform.
In October, we released the newest version of the platform, version 10.0, which provides investors with a straight-through processing system for controlling their investment process.
NREI: What value does Peracon bring to the commercial real estate investment community?
McGowan: Companies that don’t use Peracon are likely using simplistic, internally-hosted programs. This usually means that the information in their system cannot be readily transferred or easily shared with other companies.
Because Peracon is used by large institutional real estate owners like TIAA-CREF and First Institutional Reality Trust (and their partners, lenders), it can save time and make the flow of information much more efficient.
NREI: How can it help large institutional investors?
McGowan: Many institutional owners are required to report on the performance of their assets. Peracon allows an investor to post reports in a secure location and send out an e-mail notification that the reports are available. People who have been given access to the reports can logon and review the information. Individuals receiving reports see only the information they are entitled to see.
Previous reports are archived, so there's no searching through e-mails to find them. Peracon also shows the owner who has viewed the reports. By using Peracon to control the reporting and investor relations process, investors also benefit by having every asset in their portfolio poised to go-to-market.
NREI: How much does the service cost?
McGowan: Peracon is licensed on an annual subscription basis, by office, transaction, total owned assets, or company, with fees ranging from $5,000 to more than $100,000 annually.
NREI: What role will Peracon play in the evolution of the commercial real estate industry?
McGowan: The only way the industry will become more efficient and liquid is if all participants interact through a common platform. Peracon makes this possible. Reaching the entire universe of people involved in real estate investing is a challenge. But as the number of users gets larger, Peracon becomes even more valuable to all participants.As the investment real estate market continues to expand globally, generating increased cross-border capital flow, there is a global need for the Peracon service. To meet that need, we’ll soon be releasing a multi-lingual version for these kinds of cross-border investments.