Online Spending for Commercial Real Estate Marketing Reaches $2.9 Billion

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Spending for online commercial real estate marketing is projected to reach a record $2.9 billion in 2009, according to Williamsburg, Va.-based media research firm Borrell Associates Inc. That represents a substantial increase from the previous record of $2.5 billion in 2008, according to Borrell.

The figures document the trend toward increased use of the Web as a marketing tool. Nearly half of all spending for commercial property marketing last year, 48%, was allocated online, Borrell reports. That includes e-mail marketing and spending for property-related Web sites.

“This is for both brokers and owners,” says Cary Brazeman, a spokesman for San Francisco-based online publisher LoopNet Inc., which operates the country’s largest online commercial real estate marketplace. It includes spending on property and corporate Web sites.

Developers and investors are among the groups that have shifted to the Web, Brazeman says. “At LoopNet we’re seeing it across the board, heightened interest among owners, property managers and brokers. There’s much less hesitancy — if any hesitancy — about whether or not you list an available commercial property online,” he says. “It used to be a question. It’s no longer a question.”

LoopNet, whose listings rose 16% at the end of 2008 over the previous year, reports that many of the nation’s top commercial real estate firms, including CB Richard Ellis (CBRE), list every property online unless a client declines the coverage. At the end of 2008, LoopNet’s online listings included more than $515 billion of property for sale and 5.2 billion sq. ft. of commercial space for lease.

One reason for the increase, according to Mike Manning, vice president of LoopNet, is that it is often less costly to advertise online rather than in print publications or other media. Some monthly ads run as low as $15 per listing, and the amount of traffic generated by the ads can be measured.

A broader target audience can often be reached online than by advertising locally in print, Manning says. On LoopNet.com, 47% of searches for sale properties originated outside of the local market area in January 2009. Although the leasing market tends to be more local, 28% of all searches still originated from outside of the local market in January.

Besides CBRE, LoopNet’s customers include Coldwell Banker Commercial, Colliers International, Cushman & Wakefield and a number of other major brokerage and commercial real estate service companies.

A big brokerage such as CBRE, can easily save millions of dollars per year in printing and marketing costs by switching to the Web, says Brazeman, who formerly worked for CBRE.

In addition to commercial property marketplaces, companies also have turned to social networking sites such as Facebook, LinkedIn and Twitter.


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