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"Using Commercial Database Systems"

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10/1/99 Interview with Jon Paulson, Inc.
220 Montgomery Street, Penthouse 1
San Francisco, CA 94104

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The Uniqueness of PropertyFirst

  1. PropertyFirst's management team is experienced as commercial real estate brokers; the firm has designed its system to fit the broker and the brokerage firms instead of developing a high-tech service to which the industry has to adapt.
  2. Financing for the project has come from the personal investment of the senior managers and founders of the firm as well as from key commercial real estate industry players and investors.
What the System Does for the Commercial Brokerages

  1. PropertyFirst is a database management company that writes comprehensive, powerful search programs to increase the value of a commercial real estate broker in a transaction.
  2. A multiple listing system for commercial properties is the first product; it carries listings from some of the major commercial real estate firms in the country who are under contract with more contracts pending.
  3. All properties are exclusively placed with PropertyFirst and exclusively listed by a licensed real estate broker; no property owner can list a property directly; both investment and user properties can be posted.
  4. Internal staff at PropertyFirst - a listing inspection group - review each listing to be certain information is complete and qualified; documentation is checked that the listing is exclusive, that the broker has permission of the owner to sell and that the property is deliverable.
  5. The second database of PropertyFirst is a listing of property owners and buyers that covers 1,300 organizations throughout the U.S. and many foreign investors; in addition to the major institutional investors, the database also includes major regional players.
Advantages to Brokers

  1. In a nutshell, PropertyFirst is bringing firms onto its system as member firms and building products and services to help their brokers through every step of the transaction process.
  2. The property owner database is an excellent prospecting tool that is being expanded to include all owners of at least one property with a value of $750,000+; database listings will show who has multiple holdings.
  3. The company is cooperating with other major service providers to bring members useful information such as financial models (developed with Argus) to assist brokers with underwriting.
  4. The Multiple Listing Service relates to the marketing phase of the transaction process - perhaps 20% of the broker's time; additionally, PropertyFirst aims to enhance the broker's professional image.
  5. PropertyFirst also supports the broker in closing transactions and in bragging; in exchange for supplying PropertyFirst with transaction information for its historical database, the company distributes email/fax notification of your successful sale to anyone on the database.
Distinction from REALBID

  1. The key difference lies in PropertyFirst's full-time research staff, who are building files that record not only the acquisition person, but also the people in other relevant positions.
  2. PropertyFirst's listing of 1,300+ visible buyer organizations, which has 6,000+ contacts, is the most comprehensive, accurate and up-to-date database of investors/property owners in the business.
  3. The high cost of the PropertyFirst database, several million dollars, is shared among the members.
Special Free Membership Offer

  1. Individual commercial brokers and firms who join as members through the end of 1999 will have the one-time membership fee permanently waived and monthly dues waived until 1/1/2000.
  2. To build the MLS database, both members and non-members can add any exclusive listing to the system through the end of the year for free.
  3. As of 1/1/2000, only members will be allowed to post listings; each listing will be assessed a $100 setup fee plus $50-$75/month (depending on volume of listings).
  4. As of 1/1/2000, the one-time membership fee will be $2,500 for the first office and $1,500 for additional office; dues for an individual will be $75/month for system access and services.
The Match Program

  1. When a listing goes into the system, it is automatically matched against the buyers database; the broker gets a list of all those people whose investment parameters fit the characteristics of the property.
  2. The listing team also receives contact information on anyone who visits the listing, even if the visitor is not part of the database; principals have free access to search the inventory whether or not they participate in the database, but there is no charge for them to join.
What the Future Holds

  1. Paulson believes that PropertyFirst's niche is to be the premier service provider to the commercial real estate community, giving professionals and principals information that is unparalleled in quality and accuracy.
  2. However, there should also be room for other providers such as LoopNet, COMPS, REALBID and RIGS [now CoStar Group], which are working from different models and strategies.
  3. The technology that has come into the industry will make good brokers better and will hurt those that don't adapt; the overall volume of business will increase dramatically and fees will come down. 4. PropertyFirst is committed to keeping its edge by upgrading its products and service line - e.g., a Client Services Group dedicated to installing the software and training all levels of personnel in client offices.
Convenience Aspects of PropertyFirst

  1. The property owner database saves the individual broker from having to maintain his own list; a record of personal notes and transactions is still be required, but the firm supplies updated contact information.
  2. Membership is a powerful and prestigious marketing tool, especially for the smaller broker.
Recommended Sites

  1. PikeNet is a resource that Paulson uses frequently for evaluations of web sites.
  2. Geff Dohrmann's Institutional Real Estate Letter is packed with good information.
Three Years Out

  1. Expect international business to increase dramatically; more investment capital will flow outside the US as international listings become available to US brokers and investors.
  2. The commercial real estate industry will get smaller; hardworking cyberbrokers will take the bulk of the business.
Contact Information for Jon Paulson:

(v) 415-623-2552
(f) 415-623-2557

Real Estate Sites & Tools in this Briefing: