Is it time to rethink the site selection process?
Last year, I posted some ideas on how we, as an industry, could reinvent the space selection process. The gist of the post was that the current process in overly complicated and inefficient. (Surprise! its commercial real estate...)
Jason Freedman recently touched on this inefficiency and how 42Floors had to rethink their own approach in order to improve their site's accuracy:
There may be a day when brokerages and landlords have all of their listings automatically exported into 42Floors, but that’s not happening anytime soon.
Today, we have a tremendous operation that collects commercial real estate data twenty different ways so that our users can view available office spaces on a simple app. We manually process email blasts. We manually check for website updates. We make thousands of phone calls.
The reason for this is a simple one, but not immediately obvious for folks who are not in the leasing trenches. Keeping old listings live on every site possible is beneficial for many brokers and landlords. Here's why; it is a classic bait and switch. A tenant (or tenant rep) calls a landlord (landlord rep):
Tenant: I saw your listing for Suite 102 on Loopnet. I'd like to schedule a tour.
Landlord: Sorry, I just leased suite 102, but I have another suite in another building, in another submarket which I can show you...
Tenant: Uhm, okay?...
The concept I outlined in last year's post, Let's reinvent the search for office space, is not a new once, but it does help to avoid the pitfalls of inaccurate data. And it is actually one which the GSA and other government agencies use here in the US, as well as some non-US markets (eg. Australia).
In short, the concept is this: as a tenant or tenant rep broker, instead of having to comb CoStar, Loopnet, Xceligent, 42Floors, OfficeSpace.com and the local CIE - which are ALL prone to stale and inaccurate information, so you have to call each space and confirm its availability - why not issue an RFP to which the market can respond?
One such platform now doing just this is Lyngal.com.
Lyngal - which stands for Lyngal stands for List Your Need, Get A Lead - was started by Danny Rice, a former Colliers office leasing broker, and cohorts Trent Scott and Jean-Paul Beaulieu.
Danny describes Lyngal this way:
We set out to build Lyngal.com with one focus in mind… provide an alternative way of searching for commercial real estate by putting tenants and buyers at the center of the search process. Allow the tenants & buyers, those looking for space, to list the specifics of what they are searching for, known as their “need”. We believe this opens the door for a more educated discussion to fulfilling the tenant or buyer need, while providing an increased level of activity on listings.
Here are two promo videos which outlines the site's approach.
For Tenants, Buyers & Their Reps
For Landlords, Sellers & Their Reps
Building a two-sided marketplace is notoriously difficult to do, largely because you need to match supply and demand, simultaneously. From Mark Peter Davis' post How To Overcome The Catch-22 Of Two-Sided Networks -
A catch 22 makes developing these networks challenging, however. Each side of the network depends on the presence of the other to derive value. Guys need girls to be on Match.com in order to pay for the service, sellers wouldn’t bother with eBay if the marketplace wasn’t rife with buyers and nobody would post a project on elance.com if there was nobody to fulfill the work order.
This is precisely the reason most brokers and tenants would be reluctant to execute this approach. That said, with sites like Lyngal, this may soon change.