I had a thought
Reading the comments and having conversations (yes, people do call me) over the last couple of weeks got me thinking. Why worry about data standards? Why worry about data at all?
Do we really need it?
Most any and all information that is relevant to commercial property is gathered and processed by the Listing Broker. Why share? Keeping it in house allows the broker to keep the sensitive financial data that can impact negotiations and the ability to maximize the value of the listing or asset. Sound ridiculous? How much data is shared on the lease side? Show me your lease comps and I’ll show you mine.
Why pay for what we already have?
As Broker’s representing property for sale or lease the only real reason to give any data is to form a basis for a user to….what? Compare its value to other properties? Create a real value for a comparable sale? Form a basis for analysis? Maybe, it’s just to entice the potential client. Oh, and we as Broker’s are smart enough to pay into what are basically aggregators of that data for…..what? The information we already have.
Why change?
It’s working perfectly now. Is it not? There has been a push to standardize commercial real estate data by www.oscre.org. The general information and feedback I have received is that not a whole lot has been accomplished. Maybe the need doesn’t really exist?
Will we have a choice?
Well there is that little company out there called Google. How hard would it be to use the data that already exists let’s say between Co-Star, Loopnet and Catylist/Commercial IQ.? What if just for fun we added in a little Google Mapping and a bit of Google Goggles. How about the Realtors Property Resource (RPR)? It will have all property data available to any broker.
Will we hold on forever?
Take a look at Residential. Did I just loose you? Now residential has NOTHING to do with Commercial Real Estate. What if there was no MLS? Look at this post. Read through the comments. Tell me why we in Commercial Real Estate are so so different!
Real Estate
February 23, 2010 at 6:16 am
Most any and all information that is relevant to commercial property is gathered and processed by the Listing Broker. Why share? Keeping it in house allows the broker to keep the sensitive financial data that can impact negotiations and the ability to maximize the value of the listing or asset. Sound ridiculous? How much data is shared on the lease side? Show me your lease comps and I’ll show you mine.
Duke Long
February 23, 2010 at 9:01 am
And your comment is?????
Nashville Grant
February 23, 2010 at 6:36 pm
Their comment is link spam and should be deleted. I am a broker who is in the residential and commercial worlds..I find that each are moving towards the middle. It is an inevitability that commercial will become a more open market, it is what the sellers want and what the new generation demands.
Duke Long
February 24, 2010 at 8:43 am
Agreed,
Thanks for the comment
Office Space Chris Hancock
February 26, 2010 at 5:37 pm
While I agree the newer generation has cause for demand and commercial information will become more transparent and open eyes in the market, there will always be a information gap between buyers, sellers and tenants. As a commercial broker, there is some information that I have acquired over the course of transactions and the expansion of my local market that can only be realized by those who are there on the front lines. Because we live in the information age, players in the commercial market must adapt. And as information becomes more transparent it may create a more level playing field. Either way, it certainly will change how the game is played.
Chris
February 23, 2010 at 1:55 pm
Do we need data standards?
Everyone has data standards in some form or another. OSCRE’s point is to standardize those standards so there’s not so many standards out there. Kind of like how they try to standardize tech protocols because if someone doesn’t, then the market decides which means having multiple, inoperable systems until the big shakeout (or not). Think (dating myself….) VHS vs Sony Beta as a market decision; cell phones – US and Europe – as waiting for it.
Data we all ready have…
Commercial brokers pay listing aggregators for one reason only – eyeballs. I remember when LoopNet was free – now they charge for everything including sending them the data they need to survive. Wouldn’t be so bad if they didn’t strip us of our copyrights to the photos/content or re-use the data for other purposes (like comps and market reports), but LoopNet is basically an advertising expense.
They also serve a purpose for the broker who doesn’t have their own property/listing database. So what if they don’t have “all the listings” or their market reports suck? If I tell my clients I searched the world’s largest listing database to find them something/generate my market reports who’s to say, much less know, if that’s any worse or any better than another broker’s in-house systems/market reports. Once again, the market will decide if LoopNet’s data – and the broker who uses it – is good enough or not.
Do we have a choice?
For commercial real estate, you do. If you don’t send your data anywhere – and that includes on your website (lots of site scrapers out there), no one can pick it up and use it for their own money making purposes. But that means you’re not publicizing your client’s property very well.
If you are sending your data out there, it would be “nice” to have a standard format for doing that. I send out 6 different variations of exclusive listings each week. But once you set that all up, it’s either automatic in the case of XML feeds or a few minutes to refresh the spreadsheets and upload.
And if you are sending out data, you control what you send. Some of these aggregators want everything…but they’re not going to get the financial info or a pending status from me.
Will we hold on forever?
One problem with the way things are now is that commissions aren’t protected like they are for residential MLSs. But they’re protected because residential brokers ended up with NAR – and I don’t see a central governing group for CRE any time soon.
But another problem with not having something centralized is data quality. As it is now, we’re defendant on the aggregator to get the listings off once the exclusive has expired, not adding what they think is value but turns out to be erroneous information that someone can sue the broker for and being more transparent about what goes into their market reports (or giving that up entirely unless they can guarantee full market participation).
Can you tell I think this is a great topic? Thanks for the thought-provoking columns.
Duke Long
February 23, 2010 at 2:10 pm
Chris,
No ,Thank You, for taking the time to comment. I like the market decides angle. I date myself here<<<I remember the printed books which came out every two weeks. We have come along way BUT, I think we can still go very far. Thanks again for the comments and point of view.
yownz
February 24, 2010 at 3:47 am
Interesting post! thanks for sharing. =)
Paul Brockmeyer
February 24, 2010 at 10:33 am
Data is essential to making good decisions. The better, more accurate, and more comprehensive the data, the better one can analyze the opportunity and make the best decision. That decision making process is far more complicated (more moving parts) for commercial transactions versus residential, and that difference makes aggregation and standardization much more difficult. It also creates an opportunities — he who has the knowledge (data), has the power, and this is precisely why we still encounter resistance when talking about sharing data.
So of course it’s important, and of course you need it.
Commercial will follow residential though — it’s only a matter of time before the data is a commodity, and brokers stand more on their ability to provide solid guidance/analysis and customer service rather than on how much information they have access to.
Duke Long
February 24, 2010 at 10:38 am
Paul,
The more you comment the more sense you make. Instead of writing two posts about data, I should have just copy and pasted your response!! Well put!
Chris
February 24, 2010 at 6:28 pm
I’m posting this from a colleague who dislikes the whole blog thing. Don’t hold that against him!
That’s a little naive…comparing IT of commercial to residential. There’s been a residential MLS since the late 60s…they were all published in books, but none the less, aggregated market data. To suggest the same thing hasn’t happened to commercial for some reasons that have to do with technology – which do you think is larger, the annual gross transaction value of the commercial market, or the residential market?
It’s mutually beneficial for the parties and agents in CRE transactions to keep the data private… it’s not even an issue in residential.
I don’t understand, logically, how a CRE brokerage firm can justify outsourcing the strategic business process of local market data securitization. The reason most brokerage firms are engaged by tenants and buyers is because they believe the brokers have the knowledge and skills to “mark-to-market”. How does an agent in your markets that uses market data securitized by a company in Bethesda, compete with a local agent with its own market comparables and property inventory?
And look at the CBRE example…after helping start CoStar, they go back to proprietary internal market data securitization.
Duke Long
February 24, 2010 at 6:34 pm
Thanks for the comment Chris,
have your colleague read Paul’s comment above, and “Welcome To The Jungle Baby.”
Alan Edgar
February 25, 2010 at 8:28 am
Pretty funny…er…ironic. You’re using five or six international interoperability standards to create and post your opinions in this blog. If you use the mapping features in Google you’re likely using KML – a standard Google placed in the public domain for management and further development. Share your data, don’t share your data, import only – these are all your business decisions to make and the market will decide their value. But two out of three of these choices will benefit from normalization of naming and meaning at the very least and, if the standardization goes further to allow machine-to-machine automation and accurate interpretation then the velocity (re: the comment about access to more ‘eyes’) goes exponentially up. In the building design and construction industry a study by the National Institute of Science & Technology (NIST) concluded that at least $15B annually is wasted due to information exchange inefficiency. I’m not aware of a similar study in the Real Estate industry – though it has been suggested as an issue the US Commerce department should take up since Real Estate is the #2 business expense exceeded only by personnel expense. If you do any sort of research or business with trading partners then you are exposed to these loses and one of the best ways to make money is to not lose it.
Duke Long
February 25, 2010 at 11:30 am
Alan,
Wow, thanks for that very interesting angle. If you reference my first post,part of the reason for my angle is efficiency ,savings,making money,etc. But, again I like your points. Thanks for your input.
tcgibson@zstrata.com
February 25, 2010 at 12:53 pm
The key is quaity – and the only way to guarantee quality in your market is to do the heavy lifting.
Lease information is inherently confidential, as are retail sales numbers
Even sales prices filed with county offices, due to concessions between buyer and seller may not accurately reflect the local market, and may not be available on a timely enough basis.
Most firms do distribute their listings to other firms – of course holding back on a listing they could complete alone – and a standard would make it easier for each firm to maintain their internal database.
But that’s not going to happen – as said earlier the market will determine, and there’s no force to make the market and 1,000’s of independent firms march together
Jim Clark
March 10, 2010 at 12:19 am
As I first read your article, I presumed you had “tongue firmly in cheek”.
Standards have gone a long way to loosening big brokers’ hold on market data.
They are changing the role of commercial brokers…and that’s a good thing.
But as I read it again, I think maybe you were serious. You can’t be serious can you?
Jim Clark
Broker