I’ve written before about how companies like Compstak, 42Floors, and Loopnet (the granddaddy of online listings) among others are trying to create transparency and simplicity to the corporate real estate market, which is typically very opaque. And while I believe that improving transparency in any market is good, I also understand that real estate is not a true commodity. Pricing cannot be dictated on a strict supply/demand model like stocks, bonds or commodities, or even an Uber ride across town.
By example, I am currently working on a project for an industrial user. They need 75,000 square feet of warehouse space. The general specifications are 26’ ceiling heights, 8 loading docks, 1,000 amps of power, and 5,000 square feet of office space included. And all of this had to be reasonably close to their current location.
While there were 15 buildings that could theoretically accommodate the requirement, we discovered that 12 of them wouldn’t work. They either had structural issues that were undesirable, were geographically difficult to access, or had deals in process.
Buildings are not commodities. Even two identical buildings that are on opposite sides of the street can have dramatic differences that will impact pricing. While I appreciate any effort to add transparency, there are still significant differences between properties that could impact pricing. And brokers still have a role to play in helping clients understand these intricacies.