City real estate companies have embraced a new service offered by the Real Estate Board of New York to tap into a centralized database of commercial properties listed exclusively for sale or lease, and say it s a much needed supplement to the Costar listing service, which was for many years the only available option.
The concept behind the Commercial Listing Exchange is simple: Each Wednesday morning, participating commercial brokerages gather their exclusive listings and send them in a spreadsheet file to the Real Estate Board, which then collates the data, eliminating duplications and checking for obvious errors. By the end of the day, the Board sends an Excel spreadsheet file back to all firms with a complete listing of exclusives for participating firms.
An exclusive listing means the commercial property owner signed an agreement giving just one broker responsibility for finding a buyer or tenant, and that broker is assured a commission even if another broker finds the new buyer or tenant. Most commercial properties in the New York City area are listed as such. But in the past, it was difficult for firms to get accurate information on properties listed exclusively with competitors.
As of mid-February, the Real Estate Board s database had about 3,000 listings; approximately 7,000 active listings are available for Manhattan office properties. There were more than 10 firms participating, including some of the larger commercial owners in New York, such as Brookfield Properties, SL Green Realty Corp. and Vornado Realty Trust.
“This is information that is being made available to member commercial brokers and salespeople, so that they can have greater data and resources to be able to do their jobs,” said Steven Spinola, president of the Real Estate Board. “Each day, we re getting more of our members saying, Let s do it. “
That s a radical change in the commercial real estate world, he said, though it was contemplated for years. Historically, larger firms such as CB Richard Ellis and Cushman & Wakefield, which piloted the REBNY-administered listing service last summer, had an advantage over mid-tier and smaller brokerages in that they could afford to finance their own research departments to gather information on exclusive listings.
“The world has changed,” Spinola said. “The large firms and medium-sized firms have recognized that accurate information is more important than exclusivity. Then it s the creativity and entrepreneurship of the individual brokers that will determine whether or not they are successful with that information not that they have the information exclusively.”
Though the Commercial Listing Exchange had been talked about for years, technology only recently caught up with the vision, making it simple and cheap enough to move information efficiently between firms. Now retail brokerages have asked to be included, Spinola said, and the listings are located throughout the five boroughs, or wherever participating firms have space.
“We ve figured out a simple way of making this available with really no cost other than a commitment of some time by the firms that give us the information,” Spinola said. “And a commitment of some time by the staff here at the Board to review it and send it out.”
He said REBNY doesn t envision the listing service as a replacement for Costar, an Internet-based system that provides the only other listing of commercial properties available in the New York City area. Costar Group Inc. did not return calls for comment. Joel Herskowitz, an executive vice president at Grubb & Ellis, said an alternative to Costar is needed in the industry.
“While Costar is a useful tool, an alternative makes for competition and competition makes for a better product,” he said. “Both the Exchange and Costar will produce more and better information, and our industry is all about information.”
Many mid-size and smaller brokerages became reliant on Costar as other services that provided listing information to New York City went by the wayside in the 1990s. Now Costar holds a monopoly on listing information, for which it charges, said William Barrett, chief operating officer of GVA Williams.
“The major concern with Costar is it s the only game in town,” he said. “They can price it the way they want. And even more troublesome, what happens if they ever went away? The idea of the Exchange is it s a supplement to Costar.”
For larger commercial brokerages, a benefit of the Commercial Listing Exchange data is it can be manipulated in creative ways to provide a better service for clients, said Jeff Hipschman, a senior vice president for market data services at CB Richard Ellis.
“We can archive the data and do analyses on the data versus a system that doesn t really let you house the data but rather just view it,” he said. “This gives the ability to do things with the data, manipulate the information, and create value-added analyses for your clients.”
In the future, the system may include listings for industrial space and other categories of properties, along with photos of available spaces, Hipschman said.