Seems like a good day to start, although if the Mayan calendar is correct and the World ends on 12/21/12, this will be a short-lived blog. If the Mayans are wrong, I’m hoping this evolves into an open discussion of all things lease related and I welcome everyone’s comments and suggestions. This first post may be a little self-serving but it raises an interesting issue…

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.