Are we ready for another way to lease
commercial real estate?
Full
disclosure - I established my company, Everest Auctions, to facilitate leasing
in new way so, I’m a bit biased, and I think the answer is a resounding YES.
I’ve spent 25
years in commercial real estate as a developer, broker and in–house leasing director
for Institutional Investors. During that time, despite huge advances in
information technology, the way we market commercial real estate for lease has changed
very little. We are still plagued by three common problems that effect leasibliity
which are 1) it takes too long to lease space 2) leasing results are dependent
on the effectiveness of a small number
of brokers and 3) the way properties are marked is a murky process.
Here’s how we
are addressing the issues at Everest Auctions, which facilities leasing through
online auctions.
Issue #1 - It takes too long to get
space leased
Our online auctions
are live for 45 days. The auction process fosters an increased sense of urgency,
motivates bidders and increases competition (since nobody likes to lose). The marketing
effort is focused on one suite not an entire which allows us to deliver extremely
targeted marketing to specific tenants and brokers. With conventionally marketed
buildings, it often takes 6 months (or more for second tier spaces) to achieve
leasing success.
Issue # 2 - Leasing results are dependent
on a small number of brokers (and their contacts)
With conventionally
marketed space, in most markets, the Pareto Principle still applies - 20% of
the brokers do 80% of the deals (which is great or awful depending on the broker
you select)
We expose each
auction to a large network of prospective tenants. We provide a platform for
leasing but the landlord and/or broker finalizes each lease so, we can operate
in concert with and supplement the listing broker’s efforts. Through targeted
emails, website ad placements (225 to date) and, keyword search optimization we
expand the reach of traditional marketing to reach a larger audience of
prospective tenants.
Issue # 3 - The marketing process is murky
With conventionally
marketed space landlords often don’t really know the details of what their broker
is doing to market their property (number of prospects, cold calls, email
blasts, competitive properties they are working on) and feedback is filtered
through their broker (whose continued employment is dependent on positive
feedback)
At Everest
Auctions, we fully disclose how each property will be marketed (through a
specific 6 step marketing process) and provide unfiltered access to all auctions
and bids 24/7 in real time. And one last thing, we don’t get paid unless a
lease is signed, so our success is entirely dependent on our client’s success.
