CRE Technology is Still in its Infancy

Smith: “That expansion from a local to a global marketplace may be the single biggest impact technology has had on our industry.”

IRVINE, CA—As much change as we’ve seen to date, we’re still at the very beginning of the transformation that’s ultimately going to take place with commercial real estate technology , Gordon Smith , general manager of Ten-X ‘s commercial real estate division, tells GlobeSt.com. After the recent introduction of the firm’s Offer Select platform, we sat down with Smith for an exclusive interview on what’s next for CRE technology. GlobeSt.com: What are the most significant ways technology is affecting the CRE industry? Smith: Technology is having an effect on virtually every aspect of the CRE industry, starting with the properties themselves. Increasingly, tenants are looking for more robust, more flexible infrastructure . Building managers are relying more on technology for operations, maintenance and utility optimization. Of course, we see enormous benefits to the market in the way that technology is affecting the way people search for properties online, are able to do most or all of their due diligence using these solutions and can even buy and sell properties online, or on a mobile device. GlobeSt.com: What is the next level of technological involvement for CRE? Smith: We’re very much focused on the transactional aspects of technological innovation in the CRE market. As an industry, we’re still at a fairly early stage in this process—more and more buyers are searching for commercial properties online, and many of them also search for brokers online. But the majority of transactions still happen offline. As you know, we’ve already sold more than $14 billion in CRE assets online since 2009 using online auctions. But auctions aren’t necessarily the best transaction method for every property or for every buyer or seller. So in addition to offering two different types of online auctions, our new Ten-X Commercial platform offers the first end-to-end online CRE transaction product that doesn’t use auction methodology. It’s a product called Offer Select , and it’s very much like a traditional offline transaction, but with the convenience, transparency, ease and efficiency that come with online technology. All of the products on our Ten-X Commercial platform have been designed to make it much easier for buyers, sellers and their brokers to buy and sell commercial real estate easily and safely online. You can list a property, find a property, do almost all of your due diligence, make and accept offers and counter-offers, and execute the closing all from your computer or mobile device. GlobeSt.com: What areas of the industry are most affected by technology? Smith: In terms of market sectors, there’s a growing demand for better, more-sophisticated technology infrastructure, especially in the office and high-end multifamily sectors. The retail sector is being transformed by the growing trend toward e-tail sales, and the industrial sector is benefitting from that trend, since e-tailers need more distribution hubs. But what we’re really most excited about is how buyers, sellers and brokers are embracing innovative solutions to market and buy properties. Online marketing has literally transformed the CRE industry from a market limited primarily to local buyers into a global marketplace. We’ve had buyers on our platform from more than 100 countries, and more than 50% of the people who buy properties on our site are from outside the state where the property is located. That expansion from a local to a global marketplace may be the single biggest impact technology has had on our industry. GlobeSt.com: What else should our readers know about technology and CRE? Smith: As much change as we’ve seen to-date, we’re still at the very beginning of the transformation that’s ultimately going to take place. It’s likely that we’re going to see an explosion in mobile—our iPad and iPhone apps have been enormously popular with buyers—but there’s no reason to think we won’t be able to monitor and manage properties and portfolios of properties remotely, using a smartphone . Self-diagnostics in buildings. The evolution of “green” and eco-friendly properties. And far more sophisticated tools for online sales and marketing. What’s most intriguing are the things we can’t even imagine yet. GlobeSt.com: What is compelling about Offer Select? Smith: Offer Select empowers buyers, sellers and their brokers to buy and sell commercial real estate easily and efficiently online. While we’ve had great success helping people buy and sell more than $14 billion of commercial real estate since 2009 using online auctions, we recognize that auctions are only one way to execute a transaction and aren’t necessarily ideal for every property or every deal. So we created a new product specifically to fill that void. Offer Select is the first end-to-end online commercial real estate platform that takes the traditional commercial real estate transaction process and moves it entirely online, making the process exponentially easier, more efficient and more transparent for all parties. Sellers have a dashboard where they can review all offers, create a short list, offer guidance to prospective buyers and ultimately enter into a sales agreement. Buyers can review and manage offers that they’ve made on multiple properties and engage in negotiations with sellers. Unlike auctions, where the highest price generally wins the bid, Offer Select allows buyers, sellers and their brokers to negotiate using a variety of criteria: price, diligence period, type of financing , etc. These features, along with other tools built into the platform, help streamline the process for brokers as well, so that they can spend less time managing these types of details, and more time securing more business. GlobeSt.com: What does the introduction of this product say about the way CRE is using technology to get deals done? Smith: We look at Offer Select as a natural evolution of where we started as an online transaction platform. The CRE market is not a one-size-fits-all proposition, and it’s likely that we will continue to innovate and iterate, and launch new products as buyers, sellers and brokers give us feedback about our new Ten-X Commercial platform. But the CRE industry is clearly moving online—more brokers are listing properties online, and more buyers are beginning their property searches on the Internet . The ability to conduct most—maybe all—of your due diligence online levels the playing field for investors without unlimited resources and makes the process easier, faster and more cost-efficient for everyone. The transparency that Offer Select delivers also reduces the amount of phone tag and email tag that brokers need to play with their clients, and keeps everyone on the same page. And having the ability to execute closing documents entirely online is a far better experience than the traditional paper shuffling we’ve all had to deal with over the years. We really think it’s inevitable that most CRE transactions will ultimately be done online. Offer Select is simply our first offering for buyers, sellers and brokers looking for an online experience that “feels” a lot like what they’ve been used to. GlobeSt.com: What else should our readers know about Offer Select? Smith: We already have a long list of planned enhancements and new product features in development, and will work closely with our customers, using their input to continue to improve the product. Offer Select should be an ideal way to buy and sell certain property types—like triple-net-lease properties—and leverage 1031 Exchange funds. We’re excited about the possibilities.