Why do you use Single Silo CRE Technology?


How many different platforms and websites do you need to open and log into every week to do your job? If you don’t do that anymore, how many sites do your staff and employees have to belong to, coordinate with and spend time logging in and copying and pasting data from one to the other to market and report on the deals and properties you are working on?

Why would you log into all of these when there is finally a one-stop-shop? One of the subscribers mentioned that he has to open 18 different sites to do a deal!!!!

I suppose a reason for all of the verticals you have to deal with is that most of the developers of CRE sites aren’t brokers. Some are CRE managers and others have never worked in our industry. The ones that were developed by brokers normally only do one vertical because that is all they know how to do.

While that is OK for a few, it does not do anything for those who need to do multiple functions to market deals. It really just makes us have to figure out how to copy and paste out of the new site so you can do your reporting!

Because most of the CRE technology is only a single silo technology, meaning that each one of these new sites was developed to solve one single issue wastes the time of the person doing deals. So even if the technology actually worked in the favor of the deal makers, you still have to open several different sites to look-up information, develop a campaign, send clients comps, develop a war room, see a stacking plan or set up a property tour. What a waste of time trying to coordinate all of this when the technology is supposed to make our lives easier and better!

“Time is not money because it never returns.” – Amit Abraham

“Time cannot be saved, it can only be spent, and if not spent wisely and well, it is wasted.” ― Henrietta C. Mears

Don’t waste your time of your team’s time! Find an integrated cloud based platform to use and free up your and your staff’s time to do more deals or take a weekend off!

You should check out MYRETA.com. It is the only fully integrated CRE platform in existence!

Disintermediation and/or Reintermediation (4/4)


The final in a series of 4

Are you going to survive Disintermediation and/or Reintermediation?

One of the best things we have going for us is that there is really no one big technology or warehouse in our chain versus the large technology firms and warehousers in the physical supply chain. Either they don’t see a bright line to profits yet, or they are just looking at the most profitable pieces of our service chain.

We have seen examples of disintermediation in our commercial real estate space. National and regional property owners have created vertically integrated business platforms, where all critical processes are being provided by in-house staff: marketing, leasing, space planning, tenant improvements and construction management, legal, property management, etc. Further, many veteran brokers have divorced from global brokerage brands, and they now forgo the limited benefits provided by the global firms, and now transact and provide services directly to property owners and/or space users.

Reintermediation is something new and refreshing. An example would be Amazon’s Internet-based deployment of niche marketing, order fulfillment, and customer service to provide an enhanced business model in selling books to consumers, versus the traditional role played by traditional bookstores and book publishers. So, is a corollary coming to the commercial real estate sector, and how might that impact you?

If you are a budding brokerage professional or service provider, then you probably need the alignment and training provided by a national or regional firm. But for seasoned veterans, it is now possible to deconstruct all aspects of your business, and design your own delivery model. Everyone in the commercial real estate space needs a brand, firm marketing, technology support, collaboration with distinct team members, and the services of supporting personnel (for research, graphics, financial analysis, reporting, accounting, etc.) Today, it is possible to utilize technology and some form of outsourcing to create a superior and far cheaper service delivery model.

Disintermediation is the process of breaking the old-paradigm chain. Reintegration is the process of replacing the old paradigm with a new, highly efficient model and drastically lower costs. Very simple, and with new technology, the Internet is able to deliver the right tolls at the right price, greatly improving profitability. So, if you are a service provider that has the ability to develop and execute your own business, the technology is now available to serve and deliver the same or better service to those clients at a better price point. Additionally, instead of sitting at one of the traditional firms that service these clients, maybe you should set up or join a virtual group of professionals that services these clients at a reduced cost. The clients would have the same professionals working for them and would benefit from the costs savings.

Just some thoughts.

Again as the author Hemingway aptly said “Ask not for whom the bell tolls, it tolls for thee!”

Picture Credit: “Black Chain With Red Part In The Middle” from FreeDigitalPhotos.net.

Disintermediation and/or Reintermediation (3/4)


The third in a series of four


As in the physical disintermediation/reintermediation cycle, there will be winners and losers in the disintermediation/reintermediation of our service supply chain. So maybe we should take a look at the physical supply chain winners and losers to determine if we can see if your part of this service chain is in more peril of being cut than others.

I think we can all agree that the losers in the physical supply chain were the middlemen that never took physical possession of the inventory. As the manufacturer and the consumer, or their representative, the retail store looked for cost savings, so they started looking at the middlemen and their costs, and started lowering those costs, or if the technology was available, cutting those costs. If the manufacturer wouldn’t cut the middlemen out, then their products were higher priced and they lost market share to those manufacturers who would eliminate costs and middlemen.

In our business we have both physical and non-physical links in the supply chain in regards to the product, i.e. the space or building that the owner owns, and the tenant will lease. Another “physical” part of the business is the relationship of the service teams and the owner and the tenant. Let’s look at both of these.

As we look at the relationship of the physical needs of the tenant at the property, we will see that there is a need to have both technology and humans to take care of the physical aspects of the space the tenant is using. There has been a lot of new technology that assists the humans in taking care of the property and the tenant, but there hasn’t been anything that allows the property to completely run and monitor itself, yet. So, it seems that any link that services the physical aspects of the supply chain shouldn’t be in too much trouble at this time. Services like a management firm, a tenant improvement firm, and the supplier of these components. (Remember, this supply chain is a physical one and has or will be going through link chopping if it already hasn’t.)

The other part of this service chain are the relationship links. Let’s face it, there are way more service links in our chain than there have been in the physical supply chain. The reason this is of great importance to us is that most of the service links in the physical supply chain were completely removed, compressed or merged into another link.

Another component of these service links are that many are developed around relationships of the different firms or the different individuals at these firms. These relationship links, when we look at those same links in the physical supply chain, are at a higher risk than the links that have something to do with any of the physical components of the property.

Let’s look at the most extreme example of what could happen in the commercial real estate business in regards to leasing space, if the two true parties of the transaction to lease space were to do this on their own. They would be cutting all of the links in the service chain and hiring the service providers they need to transact. Let’s make this as simplistic as possible. Let’s say you have a tenant that needs 100,000 square feet of space, and you have an owner that owns 100,000 square feet of space. Here is one way that the industry works.

Generally, a tenant of this size will be represented by an expert in the type and location of the product the tenant will need. This representative and the tenant will then complete their team to look at and lease space in the time requirement they have. On this team there may be lawyers, for both the tenant and the representative, space planners, or if they are looking at a new project, an architect, space planners, legal advisors for the development, zoning attorneys and all of the services needed to build and prepare the tenant to use their space. This may or may not include a separate owner if the tenant doesn’t want to own and maintain the asset.

As you can see with this example most of the services are needed in this transaction. The only issue that can be raised when looking at the chain, is how these different service providers were able to get to work on this project. When you look at this, it seems that the tenant or their representative put most of this in place. If the space would have been in a property that was already developed, it would have been a mix of relationships of the tenant, the owner and their representatives.

So how will technology really be able to cut these service links if we really need to use the different links? If they do, how will they monetize this technology?

Photo Credit: “Red Link Grey Background Shows Strength Security” from FreeDigitalPhotos.net.

Disintermediation and/or Reintermediation (2/4)


Let’s take a look at how disintermediation has been applied to some of the different industries. First, let’s look at an example of physical goods.

The value chain used to include a supplier, a manufacturer, a distributor, a wholesaler, a retailer, and then the consumer, for a total of six parties. After the disintermediation, we only have a supplier, manufacturer and the consumer, or a total of three parties. We have lost half of the links in the chain through the disintermediation of the value chain. I think that some of these chains go from manufacturer directly to the consumer. While this should reduce costs to the consumer, on larger orders or items, there is a savings. However, when a consumer orders a small item, the cost of the shipping and handling can be higher than the cost of the item.

I know all of us see this when you are ordering over the internet and the shipping is free if you order goods over $50 or, they ship the goods via mule train!

Some other issues that still need to be worked out is when you need to ship the items back that are not the right size, color, are broken, or whatever. Again the shipping, handling and restocking charges can be rather expensive.

Now, let’s see what the service chain looks like in our commercial real estate business. As we know, there are several different service chains, depending on which service we are providing. Let’s start with the chain for leasing a property.

I would start with the true owner (a group of people or fund), the Operator of the property, their portfolio manager, the asset manager, the leasing agent, the manager of the property, the tenant representative, and then the tenant for a group of 8 parties. We could add a few more links, like a research department or a research service, a group of lawyers for every single service provider in the chain, title services, appraisers, and the firm or firms that the third-party service providers work for. There are a lot of links in the chain if you really look it over!

So, if the disintermediation theory holds that if the “service” can be done over the internet, there won’t be any need for the human service provider. They argue that a software program or maybe in some services, robotics can do what we do better, faster, and cheaper. The idea would be that they could un-link the service chain and only leave those links that still have a true “human” service that the internet with its data and connectivity cannot serve.

I suppose if they had their way, they would hope that the Owners, the people or the fund, would be able to hire all of the services they need to find and lease the space in the property to the tenant without all of the other services they do not need, right? If that is the case, in this commercial real estate leasing chain that has at least 11 links in the chain, the number of parties would be hacked down with chain cutters to 2 or 3 links!

Now we all hope that this won’t be the case. We all know that over the past decade there has been fee compression and movement of the different services up and down the chain. So, we still haven’t seen the true disintermediation in the CRE sector. But we are seeing the merger and combination of these different service providers to be able to get the economies of scale needed to make a current profit.

Photo Credit: “Red Broken Link Shows Insecurity And Disconnection” by Stewart Miles. Source: freedigitalphotos.net


Disintermediation and/or Reintermediation (1/4)



I assume everyone in the industry has definitely heard of, and probably most of us have been affected by some type of disintermediation. We have watched and heard of numerous examples of this in the physical supply chains of different industries. Some of the examples we hear constantly is the disruption of the supply chain from manufacturer to the end user/buyer, where wholesalers and distributors are eliminated.

These examples have been studied, shared, examined, re-examined, and turned into case studies over and over from each piece of the chain that has been disintermediated!!! They call FOUL, say it isn’t fair, call the cops, call their Congress person and even their Mommy, trying to stop their piece of the chain from going the “way of the dinosaur!”

Since most of us are in the “service” business and have heard about all of the turmoil the supply chain folks have been going through, but haven’t felt any of the pain, we may believe that we are not going to be affected by this in our industry, right?

Let’s look at an industry that has the same type of structure we have in the service side of our business. It is the music business, more specifically the record business.

Once upon a time there was a company that marketed records for recording artists. We can call them the “Record Labels.”

Like most talent-type groups, some of the artists were more marketable with their skills than others. Even though that was the case, all of the artists needed to work through their Record Label to have a venue to sell their work. So, let’s assume that 20% of these artists made 80% of the money that the Record Label made and 80% of the artists only made 20% of the revenue. Although that was the case, all of the artists received the same split of revenue as the others. Therefore, the 20% kept the lights on at the Record Label and supported the artists that weren’t so marketable. Seems kinda socialistic, right?

Well anyway, the 20% were annoyed about this, but really couldn’t do anything about it, until one day they found out about a thing called the Internet, you know the thing Al Gore invented, and soon figured out they could use some different folks to market their music. So as they looked into this “new” marketing platform, and they soon realized they wouldn’t have to “share their revenue with the Record Label anymore and support the other artists who never made a profit”!

The new paradigm meant that they could write and publish music over the Internet, and retain 70% to 90% of the revenues, while either cutting out Record Labels, or greatly diminishing the Record Label’s revenue share. Maybe it is time for the CRE world to re-think its century-old business model?

For the musicians, some of these new marketing platforms were sponsored by ITunes, Pandora, Spotify, Jango, Groove, Google, Amazon, and many, many more!

So, if someone can get the business, do the work, close the deal, the question may be to see if they won’t start this disintermediation?

Photo Credit: “Chain with Broken Link” Source: freedigitalphotos.net