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he corporate real estate industry’s service provider community is in the midst of a heightened state of “convergence” if the past few months are any indication. Late 2000 saw numerous alliances and acquisitions that support a theory put forward in the Site Selection January 2001 cover story, “E-Business Levels the Real Estate Playing Field”. That article’s premise is that consolidation on the service provider — or supplier — side of the transaction arena is a normal and natural phenomenon, given the proliferation of Web-based real estate services. Ultimately, users of real estate — the demand side — will benefit from being in a stronger position in terms of access to traditionally supply-side-resident information.
This regular column will chronicle such convergence activity and draw attention to the partnerships and other service provider deals that are shaping the corporate real estate business.
A case in point is Insignia Financial Group’s December 2000 acquisition of Hong Kong, China-based Brooke International, a commercial real estate services firm operating in Hong Kong, mainland China and Thailand. The organization is to be known in the future as Insignia Brooke. “We have long recognized the need for a strong international partner to complement our local capabilities in the expanding and maturing markets of Asia Pacific, and the acquisition by Insignia strengthens our reputation and standing in the region,” reports Nicholas Brooke, chairman of Brooke International.
Elsewhere in the Pacific Rim, Australia and New Zealand’s four leading commercial property services companies plan to launch a property-listing Web site that will include the majority of the commercial listings in the two countries. Participating shareholders in the joint venture, known as PropertyLook (www.propertylook.com.au or www.propertylook.co.nz), are CB Richard Ellis, Colliers Jardine, Knight Frank and Jones Lang LaSalle. The site, which is scheduled to go live in March, will give users direct, online access to more than 7,000 sales and lease listings and more than 3,000 commercial property professionals, according to Andrew Grill, general manager of the venture.
“This is the first time in Australia and New Zealand’s real estate history that the commercial property industry leaders have joined forces in a joint venture of this kind,” notes Grill.
Meanwhile, in the U.S. arena, Steelcase (a leading designer of high-performance work environments) and RealCentric (a Web-based commercial real estate resource provider) have formed an alliance to explore and develop new business services to provide commercial tenants with faster, more effective ways to establish, relocate or refurbish their work space.
The alliance will help both organizations provide their high-growth, e-business clients with more enhanced, Web-based tools for planning their work space strategies.
Mapping Service Adds Tactician Corp.’s MapScape.com online market intelligence service now includes business, lifestyle, traffic and crime data for corporate real estate executives to analyze in site searches. MapScape.com already provides demographics, retail expenditure, daytime population, disposable income, wealth, assets and debt, and several environmental information sources.
Services such as MapScape.com help real estate executives better understand, evaluate and value the local markets and competitive environments in which they operate, resulting in more informed real estate investment and underwriting initiatives and more successful site and market expansion strategies.
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Site Selection Challenges Get National Air Time
Bruce Mosler, president of Cushman & Wakefield’s U.S. operations, listed the top five commercial real estate strategies involved in selecting corporate sites on CNNfn’s “Entrepreneurs Only” program on Nov. 2, 2000. Not surprisingly, finding the necessary labor topped his list as the No. 1 factor in the site selection process today. “More than ever, labor forces are looking to work in geographic areas that are attractive and affordable now and in the foreseeable future,” he noted.
Mosler’s second highest priority is to search an area not only for traditional space, but also for conversion space, such as industrial to telecom. “A corporation must ask itself, do all parts of our operation need to be in one area, whether the central business district, suburban or even in one city?”
Next on his list was bearing in mind the requirements of so-called New Economy companies. “For high-tech companies, the features of the building are extremely important,” Mosler related. “This can include bandwidth availability. Does the client need to put a ‘technology spine’ in the building?”
Another strategy Mosler recommends is to work with a full-service commercial real estate firm that can forecast market rents in the short- and long-term. “Remember that in weaker markets, you have more leverage to get lease concessions from landlords, while in a stronger market you will pay more for space, have fewer space options from which to choose and no concessions.”
Besides labor considerations, industrial site seekers must devote substantial energy to sorting out distribution, utility and tax issues, which can be somewhat more complicated than in a standard office space search. “If you’re building space, you have to look at permitting, as industrial space can go up quickly if this is taken care of with proper foresight.”
Workers’ Comp Database Debuts
Acton, Mass.-based CompliSource, a provider of national regulatory compliance information, has introduced a new database of workers’ compensation laws from every state in the U.S., as well as the District of Columbia and Puerto Rico. Researching such statutes manually can take thousands of hours a year. Electronic access to the same information lets corporate site seekers and others stay on top of changes in this important area.
CompliSource (www.CompliSource.com) delivers its database offerings via the Internet and on a CD-ROM. In addition to tracking laws and regulations, the firm’s databases provide summaries of trends and analysis affecting primarily the financial and insurance industries. The workers’ compensation content would be of interest to anyone involved in corporate site searches.
Title Insurer Broadens Market Reach
Fidelity National Financial (www.fnf.com), a leading title insurance and real estate services organization based in New York, has formed an international division to provide commercial property title insurance outside its traditional markets of North America and the Caribbean region. Fidelity National Financial Global Solutions will market policies covering risks in foreign jurisdictions, including Europe, Central America and South America.
“The development of sophisticated technology truly has made the financial world a smaller place,” says Chris Abbinante, executive vice president at Fidelity National Financial. “Our major commercial customers expect that we will follow their lead in doing business outside of North America.”
The Global Solutions division has devised a standard risk profile into which new countries must fit. Local laws are then investigated to determine whether the standard policy should be modified to suit the country’s business practices. Then, sources for the production of title evidence must be found.
