The real estate industry’s version of online dating can be found in places with names like LoopNet, Crexi, Commercial Search, CoStar and others. These sites are built on the titillating premise of helping unlucky buyers and sellers, or landlords and tenants, to find the perfect match.
Overzealous prose abounds, reminiscent of the guy who waded too deeply and too fast into the online dating world, heeding neither restraint nor advice…“Your mother is going to love me!” But a deeper dive frequently reveals a world of comic exaggeration, air-brushed paint jobs and a numbing array of properties all described as “The heart of downtown!” or “Best corner in the market!”
Well, not exactly.
How many times have I visited a property whose online author led me to believe I was going to see the real estate version of The Incredibles, only to have reality bluntly recalibrated when the graffiti or plywood or down-market neighbors revealed something that felt more like Les Miserables?
What were these people thinking? is my most frequent reaction to the reliably over-reaching descriptions that accompany the properties that languish unleased and unsold in online purgatory. Indeed, electronic marketplaces are a kind of lonely hearts club for properties that don’t get any love, and which no savvy real estate consumer will pursue.
But much like the fortunes that have been made from the dating sites which target the single person whose conventional (i.e. free) methods of meeting someone special haven’t panned out yet, online real estate forums tempt the anxious owner, or the frustrated broker, with the flimsy notion that by signing up for online “exposure,” they will find Mr. Right. These businesses tap into that primal need of owners and brokers to throw money at a marketing challenge, rather than employ old-school solutions like cold calling, knocking on doors, burning up shoe leather or working with local experts who have deep roots in a local marketplace.
If all it took to successfully market properties for sale or lease was money and a website, the brokerage industry would not exist. Yet according to Dun & Bradstreet, the commercial real estate brokerage industry generated over $35 Billion in fees last year – which did not include the additional $190 Billion generated in the residential brokerage business. I would posit that the internet has proven itself to be vastly more effective in separating owners and brokers from their marketing capital than it has in generating signed leases or closed escrows.
On rare occasions we have worked with owners – never institutional or professional landlords – who reason that their persistent vacancies result from a lack of online exposure, rather than verities such as unrealistic rental rates, softening markets or a spike in proximate inventory. Perhaps that’s a natural reaction for someone whose perspective on the market is more influenced by marketing blasts than real world experience. Thirty+ years into this author’s real estate career, sales or leases originated from an online inquiry are still the exception, not the rule, while inquiries from online “prospects” are typically a waste of time.
The internet is a tool and it undeniably has a certain value in helping real estate professionals ply their trade. But I have observed that the perception of this tool’s value generally exceeds reality. Like every other industry, there are no shortcuts in the real estate business, and those who rely heavily on internet shortcuts are generally short changing themselves and their clients. The most trustworthy tools in securing real estate success – market knowledge, experience, relationships – are still the ones that you have to earn, not pay for.
About John Cumbelich & Associates
John Cumbelich & Associates is a San Francisco Bay Area based firm that provides commercial real estate services to Fortune 500 retailers and select owners and developers of retail commercial properties. The firm’s expertise is in developing store networks for retailers seeking to penetrate the Northern California marketplace and the representation of premier Power Center and Lifestyle developments.