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"The Internet edge for Commercial Pros!"

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Dennis DeAndre Photo
12/6/02 Interview with Dennis DeAndre
2650 18th Street
San Francisco, CA 94110

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LoopNet Genesis

  1. DeAndre always rated MLSs as the most valuable tool on the Residential side for their marketing power plus their related analytical information; he started LoopNet in 1995 to provide a similar tool for the Commercial side.
  2. Although aimed at Commercial agents, LoopNet is a vehicle that can provide a transition for Residential agents to commercial business.
The Status of Real Estate Tech Change

  1. Technological advance follows boom-bust cycles; during the downswing now(as in 1996­7), capital for real estate tech companies and concepts is limited.
  2. Poorer companies have succumbed to attrition, but the better ones are still being nurtured by venture capitalists.
  3. The surviving companies are focusing on generating revenue and containing costs; aggressive marketing has been abandoned because of reduced need to fend off the competition.
  4. Customers of tech companies now can trust more of what they hear and look forward to better quality services than during the boom.
LoopNet and CCIM Net

  1. CCIM is setting up its own structure for aggregating listings; DeAndre believes that competition will bring out the best in LoopNet.
  2. There are hundreds of MLSs for residential practitioners, but few have gained critical mass in the commercial industry; having more viable players in the arena would be beneficial to Commercial agents.
Looking After the Bottom Line

  1. Many Internet tech companies that previously gave away products and services are now charging for them; industry-wide, quality products are not available anymore for free.
  2. In the area of commercial real estate listing services, most new companies are adopting pay-to-use models.
  3. If good, free listing services had still been available when LoopNet eliminated much of its free service, it is doubtful that the tens of thousands of subscribers who now pay LoopNet would have joined.
The LoopNet Conversion to Fees

  1. By keeping some degree of usefulness free, the company has tried to maintain a balance in serving those who depend on LoopNet as a daily utility and those who occasionally browse LoopNet.
  2. Paying subscribers can see all the listings and have their postings gout to the entire universe of 300,000 users.
  3. Non-paying subscribers can only see listings 30 days after they are posted, and their listings are only made available to paying members.
The Internet Competitive Edge

  1. Commercial professionals have gained time and efficiency by sharing and marketing properties on the Internet; this was a quantum leap for the Commercial side, which did not have the previous benefit of MLSs.
  2. A Commercial listing service needs to have much wider geographical coverage than a Residential service; the greatest benefit now with a listing service is the ability to comparatively analyze properties side-by-side or see properties outside a particular metropolitan area.
  3. Agents and owners have to spend a lot less time marketing and searching properties, so more time can be spent on their value-added services brokers are involved in nearly every LoopNet transaction.
New Tools at LoopNet

  1. A new product, LoopLink 4.0, allows people to market properties from within their own web site; it spares brokerage companies the need to put up special pages on their site to market properties.
  2. A professional brokers' directory is about to come out that will allow brokers to market their services by putting their credentials online.
Transaction Management

  1. LoopNet has narrowed its original goal­facilitating the entire transaction to focus more on the buyer-seller discovery phase aggregating more properties for sale and more eyes to search them.
  2. Until LoopNet reaches critical mass in the discovery phase, it may resume some ancillary areas (e.g., escrow and environment services); LoopLender,which provides financing, is a service that has been maintained.
  3. Many of the Commercial companies that failed were transaction management software companies; transaction management was addressed too soon before the transaction components reached critical mass.
Internet Deals

  1. The Internet is useful in starting relationships and starting transactions; at some point in the future, it will be useful in finishing transactions.
  2. The most common deals that are facilitated on the Internet are cross-state transactions in the investment area.
  3. The leading commercial property type on LoopNet has been net-leased investments, which are well suited to Internet dealing because that marketis highly transparent and liquid.
  4. Activity with space-available properties is good in some regions while investment real estate is broadly geographic, leasing is more localized.
Research Sites

  1. is the most comprehensive source for daily commercial real estate news; it parallels on the Residential side.
  2. Reis Reports as well as the large brokerage company sites are excellent for real estate research; Reis carries market information for a variety of property types in major metro areas.
New Technologies/Future Directions

  1. Wireless technology in the US will follow Europe and Japan in the next 18 months in using cell phones for Internet access, global positioning, email, instant messaging, taking photos and more.
  2. Companies like LoopNet will provide tools to take advantage of the technological changes as the infrastructure evolves.
  3. 2003 will be the year of integration; existing tech companies should last because they have settled into core services; public demand will be for companies to integrate into a single platform.
  4. Compared to two years ago, there is less hype and more substance with the Internet genuine progress has occurred, but advances will take longer than anticipated earlier; comprehensive digital transactions will still come, but it may take 10 years.
Contact Information for Dennis DeAndre:

(v) 415-216-1600
(f) 415-216-1601

Real Estate Sites & Tools in this Briefing:
Reis Reports