The Search for Office Space Has Evolved
The $860 million Loopnet/Costar merger made headlines about this time last year; a deal which is yet to close.
Meanwhile, some folks are not standing idly by. As Costar and Loopnet spend millions of dollars trying to convince the FTC that the merger is not anti-competitive, the market continues to evolve.
A Little Background
Both Costar and Loopnet have subscription-based business models. If you're a broker, and you need to run a market availability report, you need to buy a subscription. If you are a Tenant and you want to view all of the listings, you'll have to buy a subscription.
What if there was a website which was totally free to search, view and run reports on every listing? As a tenant, you'd probably be drawn to that site, right?
The Value Proposition
As much as commercial real estate hates to be compared to residential, I am going to make a comparison between the two. Today, home buyers can search virtually every listing on Trulia or Zillow for free, with no sign up required.
These services haven't made the buyer's agent extinct. Many buyers still use representation, simply because they don't handle real estate transactions all that often.
Same with office tenants; they may move every 3, 5 or 10 years. They don't know real estate, or have the time to learn, they have a business to run. For this reason, many times, it is still in their best interest to use an experienced industry professional to negotiate on their behalf.
But as a tenant, what is so bad about being about to view every listing from the comfort of a computer? Must they wait for their broker to email a PDF property availability survey? Why can't tenants run their own search query on Loopnet or Costar and send a list of properties which they'd like to tour to their broker?
Who will deliver on this proposition?
The market is evolving to serve tenants and brokers who want unfettered access to all listings.
I'm not sure why it took so long for someone to build a business model around the tenant being the precious commodity. It does mean betting that brokers will jump ship from incumbent listing solutions if they begin generating better leads using alternative an service.
I think the odds are good, they would.
OfficeSpace.com's new CEO, Susie Algard, is making this bet. Susie thinks of herself as a "re-founder" rather than a founder or gambler, as OfficeSpace.com is not a new company, but rather a 15 year old business. She's just reinventing the business model...
Evaluating the office space market, there are great resources for brokers, landlords and property managers but limited options if you’re an actual tenant looking for space, even fewer options if you are a tenant looking for smaller spaces. Our goal is to change that and create an effective marketplace for both tenants and landlords/brokers. We’ve been busy at work over the past year, our small team of 7.
I had the pleasure of spending 30 minutes on the phone with Susie earlier this week to learn more about OfficeSpace.com and the suite of Broker Tools they are about to roll out.
These tools include the ability to:
Post photo-rich listing pages, they'll even take the photos for you. View an example.
Generate qualified leads, and get automatic email alerts.
Create marketing materials, including PDF flyers.
Conduct customized market surveys, accessible in both HTML and PDF formats.
Build a broker home page, with a vanity URL.
Below are some screen shots of these tools:
But wait, I just spent the last 5 minutes saying how the market has changed and now these new service providers are serving the needs of tenants, not brokers. So, why am I writing about new broker tools?
Here is why: OfficeSpace.com understands that in order to generate pageviews from prospective tenants, they must have listing inventory. And, in order to have new listings posted, brokers and landlords must have a reason to post their office space availabilities to yet another site.
A "Broker Tools" suite is nothing new, either. Loopnet has one, too. Ever used Pro Tools? It's included with a premium Loopnet subscription.
Here is the difference: OfficeSpace.com's Broker Tools suite is FREE. And all listings are FREE to search; there's no differentiation between a "Basic" listing and a "Premium" listing.
Every listing is searchable, viewable and beautiful.
There is a simple elegance to each property listing page, where the property's photo takes center stage. The idea behind this design is that the search for office space is still very much a visceral exercise.
Office tenants must ask themselves, "What is our corporate culture? What emotional response do we want our clients to have when they come to meet with us?" These are all things which need to be considered, and a picture is worth a thousand words.
They feel that this user experience is so important to prospective tenants that OfficeSpace.com uses professional photographers for many of their property listing photos.
While the service is not limited by geography, they are focused on rolling out this new business model to select cities. The first city they've rolled out this new platform to is Portland, Oregon.
I would encourage tenants, landlords and brokers to give it a try. Together, we can revolutionize the entire industry by adopting new approaches and technology.