Media attention continues to focus on the decline of technology start-ups, including casualties in real estate. Nonetheless, real estate technology hasn't disappeared: A few hardy survivors are hanging tough, building their businesses and dreaming big. Disregarding the doomsayers, these firms insist technology will earn an increasingly prominent place in commercial real estate.
“I'm optimistic about the future of real estate technology,” notes Kathy Huber, founder and CEO of Market Insite Group, Sausalito, Calif. “Adoption will occur. It will happen when end users realize that the time spent to learn the technology not only significantly reduces the time spent performing the task, but also dramatically improves the results achieved.”
This time last year, Huber was CEO of LOCATION-net, a company she founded in 1998 as a way to compare and contrast markets and to predict the drivers for success in a business location. In May of this year, LOCATION-net acquired Troy, Mich.-based The Green Group, known for its retail market analysis, and adopted the name Market Insite Group.
The new company takes advantage of the strengths of both organizations. It works to minimize the risks associated with the location of a business and to maximize the revenue derived from existing properties. The heart of Market Insite Group — and a key to its success — is its scoring index.
“It allows property owners and retailers to instantly compare a proposed location to an existing one,” Huber explains. “This allows a user to immediately assess the market potential of a new location.”
To survive in today's marketplace, tech firms must show clients immediate results and immediate opportunities for high return on investment, explains Frank Rockwood, president and CEO of Berkeley, Calif.-based Vectiv.
Rockwood's firm provides a technology solution designed to help clients manage a property throughout its lifecycle — from market planning to prospect evaluation, site decision, acquisition, design, construction, pre-opening, operations and disposition. The goal is to boost profits by making all real estate processes more efficient.
Rockwood says Vectiv can demonstrate to its clients, which include Apple Computer, that its technology can deliver millions of dollars in incremental profits. This has been key to Vectiv's success. “The productivity gains offered by Vectiv are straightforward and tangible to the real estate decision-maker,” Rockwood notes. “For example, on a per site basis, two weeks of work can be accomplished in two minutes using Vectiv.”
Filling industry needs
One of the most successful real estate technology enterprises is Loopnet, a comprehensive service that merged in July 2001 with PropertyFirst.com. The new company, which retains the Loopnet name, estimates its online marketplace will include $130 billion of commercial properties for sale and two billion sq. ft. of space for lease. Loopnet members use the Internet to list, search, market and finance commercial real estate properties. The company predicts its base of registered members eventually will exceed 225,000.
Richard Boyle, Loopnet's president and CEO, says the reason for the firm's success is simple: “Loopnet fills a valuable industry need for an open, accessible service for sharing information.”
Loopnet has worked hard to build a critical mass of markets, listings and users. Boyle says Loopnet will continue to enhance its value-added services. “We're very optimistic about the future,” he says. “The growth opportunity is significant.”