By Ken Ashley
ATLANTA (May 26, 2010)
allow a user to point the device at a building and determine facts such as the name of the leasing agent, available square footage, asking rates and other details. Of course there’s always an “app for that” in today’s world. So, can the iPhone replace the tenant rep?
This app which the developer calls an “Augmented Reality Browser,” is just one of many under development by commercial real estate service providers, software companies and in general anyone who thinks they can get a little exposure or make a buck in the real estate space.
I am transported back to 1999 when “disintermediation” was all the rage and at least a few tenant rep brokers wondered if they would continue to have jobs. Back in the late ‘90s databases became accessible to anyone who would pay for the data and had a modem. The theory then was that the brokers would no longer be needed because the new owner of a computer with dial-up and access to reams of data could just call the buildings him or her self and negotiate a deal. The dreaded commission could finally be avoided and the tenant could keep all 2-4% for himself!
Well, it just didn’t happen and it won’t happen in 2010, or I bet in 2020 either.
Tenant representative brokerage today has far more to do with “consulting chops” than raw data. The field has developed to very high level because of the influence of groups like CoreNet Global and frankly fierce competition Ask anyone who has been the recipient of a . major pitch recently about the level of sophistication of the firms chasing their business. In the past 10 years tenant reps have become like management consultants with real estate market knowledge. As part of the war to succeed brokerages are increasing services offered as part of a transaction, including some really innovative technology solutions.
Also, the risks in transactions have gotten significantly higher in the current capital environment. Understanding ownership and the “capital stack” of buildings is important always but certainly critical today. We also have to take a whole new look at leases today to make sure users are protected from so called Zombie Landlords.
Of course, on the smaller, one-off transactions an app can make all the sense in the world. You can have the freedom (and the time) to wander around a City on your drive home self perform a real estate search. And if the real estate deal is relatively simple and you pick a good solid landlord, then thank Steve Jobs as you click your way to real estate freedom.
But for most of corporate America, assigning someone who is a CFO, CAO or a division manager to handle a major real estate transaction with an iPhone is too risky and simply isn’t a good use of their time, risk profile or business resources. Therefore, and happily for my family, tenant reps will continue to play a vital role in America’s real estate transactions for many years to come.
Perhaps I need to write an app for something….can this iPhone cut the grass?