Marketing Your Listings in the Internet Age
New pricing models and tougher market conditions are helping online commercial information exchanges gain traction.
March 1, 2009
It wasn’t too long ago that using a listing Web site to market a commercial property or piece of land was far from business as usual.
Commercial brokers and managers have long relied on their established relationships and robust client databases to find prospective buyers or tenants. And in the recent, and sorely missed, go-go days of real estate, it often took little more than letting a few people know that a property was available to garner one or more offers.
But all that is changing. Today’s slower sales pace and weaker tenant demand have convinced more brokers that it’s essential to get their listings out on commercial information exchanges, where the property can be seen by a wider swath of potential buyers and brokers. Meanwhile, commercial listing Web sites are adding marketing services and more flexible pricing options, which have opened the door to a whole new segment of users.
"I now consider CIEs just another cost of doing business," says Jason Hart, principal of San Luis Obispo, Calif.–based Hart Commercial Real Estate, a company that sells and leases commercial properties. "It’s like putting a For Sale or For Rent sign on the Internet."
Some evidence of the upswing: Registered members on LoopNet, one of the largest players in the CIE industry, saw a 29 percent jump to more than 3 million in the third quarter of 2008, compared with the year-earlier period. The volume of property listings grew 19 percent in that same time frame.
At CommercialSource, the official commercial listing site for the NATIONAL ASSOCIATION OF REALTORS®, nearly 41,000 people have registered as members since the site’s launch in May 2008. That’s more than half of NAR’s total base of commercial members.
Big brokerages are seeing the demand, too. Denver-based RE/MAX International Inc. just announced the rollout a brokerage-wide CIE that works in conjunction with the company’s public Web site.
"Brokers are now looking to CIEs as beacons for efficient markets," says Jeffrey Schwartz, senior managing director of New York–based Adams & Co. Real Estate. Commercial practitioners are also finding value in the extra services that CIEs offer, including market research, sales histories for comps, tenant profile databases to track expiring leases, and networking opportunities. And they’re taking advantage of convenient delivery options, such as RSS feeds, that send listings directly to users.
"CIEs are trying to provide the commercial real estate industry with what MLSs offer for residential salespeople—a complete, one-stop research tool for property comparisons," says Schwartz, who logs on to CIEs to review floor plans and find space for clients. "The task used to be a lot more tedious because you had call the landlords to determine what space was available for lease. Now it can be done with a click."
Pricing Gets Accessible
In the past, some brokers avoided using CIEs because they were simply too expensive. "Unlike residential listing services, which are marketed to the individual agent or offered free through the MLS, most commercial listing services were marketed to the big commercial companies," says Bob Gibbons, CCIM, CPM®, president of Reata Commercial Realty, a Dallas-area brokerage. "You could see it in the subscription costs."
This, too, is changing. Even the more established CIEs, which once took a one-size-fits-all approach, have introduced more flexibility in their pricing structures. Most now offer some form of free basic listing service and various levels of enhanced listing packages.
LoopNet, which has been around since the mid-1990s, sells a range of plans, from one premium listing for $54.95 per month, to 15 premium listings for $224.95. Basic listings are free—but they have the least amount of visibility.
CoStar allows commercial brokers to post basic listings at no charge, although research packages that include sales comps, prospective tenant lists, and leasing activity cost $800 to $1,000 per month. CommercialSource offers basic listings for free; enhanced listings are $25 per month for members of the NATIONAL ASSOCIATION OF REALTORS® and $35 for nonmembers.
COMMREX charges $79 for one year of unlimited postings. But for an added $69, members can upload packages of online information to each property listing, and more prominent listings on the site cost extra.
Getting Maximum Exposure
The fragmented nature of commercial listing services has also limited wider adoption among commercial practitioners. It’s still a barrier today but one that most brokers are now willing to work around.
Unlike residential sales, where virtually all properties handled by real estate practitioners are posted to REALTOR.com through MLS feeds, there’s no one dominant commercial listing site. The field is quite competitive, with at least a dozen different providers—each offering its own value proposition.
LoopNet boasts having the most Web traffic and registered users, while CoStar claims to have the industry’s largest database of verified, updated property data. Other sites have dominance in certain geographic areas or specialize in a commercial sector.
"Compared with residential multiple listing services, where everyone uses the same database, commercial listing services are highly fragmented by property type and location," says Gibbons, who subscribes to several CIEs. He may list an apartment complex in the local MLS but use a different site for a large industrial property. He also takes into account that landlords and tenants generally use different CIEs than brokers, while institutional buyers and individual investors are likely to favor their own specialized sites.
"You have to put your listings everywhere you think they can be seen," Gibbons says.
Hart also subscribes to a number of sites, including Cityfeet, Commercial IQ, CoStar, CommercialSource, LoopNet, and his local MLS. It’s expensive, but Hart doesn’t mind paying for what he’s getting. "If you look at what you used to spend on print and consider all of the extra features you get online, it turns out to be quite a bit cheaper than traditional forms of media," he says.
Depending on which state or local REALTOR® association you belong to, you may already have a built-in CIE. On REALTOR.org, some 70 associations are listed as having active CIEs. For example, the Houston Association of REALTORS® and the member-owned Commercial Brokers Association of Seattle rely on NAR’s CommercialSource to display their listings online. Commercial brokers in Chattanooga, Tenn., signed an agreement last year to use Commercial IQ, and the CCIM Institute gives members free use of LoopNet and a real estate resource site called Site To Do Business, accessible from the CCIM home page.
Even as listing Web sites increase property visibility, getting the listing online is only a starting point. As an added benefit to users, many CIEs are now offering the kind of marketing services that would otherwise be the responsibility of a broker’s support staff. Options include customized property Web sites and the ability to increase the property’s search ranking on the site.
Many sites also offer some type of push-marketing feature that allows brokers to send listings to other practitioners or investors using predefined criteria such as property type, tenant mix, building size, and lease terms.
Some CIEs offer prospecting tools that are tied to specific listings. CommercialSource has a solution called e-Cards, which lets brokers send a virtual postcard featuring a property to friends and colleagues. The ability to create PDF fliers and packaged reports are also common features that enable brokers and leasing agents to get the best exposure possible.
Hart says all of these tools that allow commercial practitioners to send property information online means that "the phone doesn’t ring as much because people find what they need to know," but he adds, "those who do reach out to you have a much higher level of interest."
From Offline to Online
If there’s one favor a slower market will do for the commercial real estate industry, it’s to highlight the competitive advantages of speed and research, both of which are hallmarks of online commercial information exchanges.
Brokers can get the information they’re looking for, and they can get it faster than ever before. But just as the residential side of the business has learned, Web sites and other online technologies don’t cancel out the most important factors of success in commercial real estate: relationship-building and market knowledge. "Commercial real estate hasn’t stopped being a relationship business; it’s just becoming a relationship and technology business," says Gibbons.
TIPS: Taking Your CIE to the Max
Posting your listings to a commercial information exchange is relatively easy. But there are some extra steps you can take to get the most out of each listing.
Pay for results. If you have the budget, take advantage of paid-search options available on many listing sites. Having your listing pop up first when a prospect searches the database increases visibility for the property and for your company.
Be detailed. Include all of the pertinent property information—especially price or lease rate. Many brokers are annoyed to find the word "negotiable" in place of an actual price. Complete listings are taken more seriously.
Go for exposure. Since there’s not a single, dominant national listing platform for commercial properties, put your listings everywhere you think they’ll be seen. This strategy will often require subscribing to multiple CIEs.
Don’t forget the MLS. In many areas, residential MLSs also accept commercial property listings or REALTOR® associations maintain separate commercial listing sites. For smaller buildings, space, or land parcels, this may be a good option for reaching both users and investors.
Provide "other comments." Many property databases include a field for "other comments." Text in this field is searchable, so use this space to list special details about the property that will help boost your search-results placement. This is especially important for Class B or C properties whose beauty isn’t always apparent from a photo.