Week of February 26, 2001
Editor's Choice Web Pick
'The Future of Corporate Real Estate'?
By JACK LYNE Site Selection Executive Editor of Interactive Publishing
A wondrous tool, this World Wide Web. But for all its tremendous benefits, the Web has scarcely scratched the surface in alleviating the deep-seated fragmentation in corporate real estate (CRE).
That could change significantly with NetStruxr (www.netstruxr.com). This site may well prove to be a major leap forward for a US$5 trillion global CRE industry that's as splintered as Toni Braxton's dress at the Grammys.
Countless real estate-related Web sites, of course, have tanked or are on virtual life support. NetStruxr lays claim to being something different, even dubbing itself "the future of corporate real estate."
That's a big claim. NetStruxr, however, may well be up to the task - no mean feat in a cyber age in which breathless overstatement until recently could pass for bona fide business planning.
BOA/IBM/Prudential CRE Link
The high-powered trio, in fact, even took a minority stake late last year in San Francisco-based NetStruxr. What BOA, IBM and Prudential brought to NetStruxr's online party wasn't capital. Instead, they brought a commitment to put a whopping $3 billion a year in real estate transactions through the NetStruxr's Web-matching system.
The BOA/IBM/Prudential deal marked not only a substantial building block toward gaining critical mass. The pact also lent rock-solid credibility to NetStruxr's online claim of being "the only e-business platform and marketplace planned and supported by major corporate real estate organizations."
Driven by Demand, Not SupplyThe BOA/IBM/Prudential tie-in, however, wouldn't matter if the site didn't have to the goods to differentiate itself from the pack. NetStruxr seems to have the goods.
The site offers major improvements in the fragmented inefficiencies of corporate space searches. You know the tired old drill: hire a broker, who then uses his or her relationships with landlords and mines space-listings services. But what those brokers are mining is only the square footage that space providers are willing to list today.
Using Web sites to streamline the process has only gone so far. Most existing online platforms are designed for products, commodities and self-service. That supply-driven scenario may be fine for buying books or CDs. But buyers' unique needs by nature customize real estate deals.
NetStruxr, in contrast, is driven by demand. Utilizing the site's SPACEdirect function, users list not only what they're now seeking, but also what they anticipate looking for in the future, when existing leases expire and new space must be leased or built.
NetStruxr's corporate-driven system, in turn, creates a very strong incentive for provider participation. Simply put, landlords will rush online to sites with real, live prospects. That counteracts the fragmentation in much of online real estate, with landlords listing on certain sites, but not on others.
Another NetStruxr draw: Landlords don't pay for participating. NetStruxr makes its money by charging landlords 0.5 percent of the total value of each transaction that's completed.
34-Screen DemoSo how does the site work?
NetStruxr does a solid job in demonstrating just that with its "detailed application tour" of SPACEdirect (accessed through the "Register" button next to "New Users" icon on the upper right-hand side of the home page).
And that demo is detailed, running on for 34 screens. The length pays off, though, clearly explaining the SPACEdirect process as four sequential steps:
BOA's Patterson: 'It Will Bring Us Value'What's NetStruxr payoffs for corporate users?
It's too early to say, as the site only went online on Nov. 30. BOA Senior Vice President of Real Estate Robert Patterson, though, is among those anticipating major benefits.
"Using technology for a common e-commerce platform will simplify the way we and other corporations conduct business," Patterson said. "It will bring us value by shortening transaction times, introducing new efficiencies and helping ease existing challenges in what is a highly fragmented market."
And if that's what part of "the future of corporate real estate" looks like, the Net result will be notable progress.
©2001 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.