Traditional Intermediaries

Business Model

The real estate transaction process involves not only locating commercial space for potential buyers and sellers or leasors, it also involves activites such as appraising and inspection. Commercial real estate professionals add value to the transaction process by:

• Contacting potential buyers for the representing property;
• Researching listings for properties with features that match buyers' criteria. The typical search criteria for commercial properties include type, square footage, area, purchase terms, tenant occupation data, and operating terms.
• Obtaining detailed information on the economic conditions of the area, demographics of the area, tenant information, lease history, environmental conditions, and building condition.
• Negotiating price and terms of purchase.
• Coordinating closing activities between client and suppliers and monitor settlement. The ancillary activities in the closing process include escrow and title, appraisal, purchase agreements, financing, insurance, warranty, exchange services, etc.

In commercial real estate knowledge is power, those that control the knowledge had a very strong advantage in obtaining listings for commercial properties.  In fact, the major commercial real estate firms would establish proprietary databases that would contain information on every commercial property in the market. This would provide their agents with instance access to the important information such as lease rates and available square footage.  Available space per property would typically be updated on a quarterly basis. This information would be used for locating space for clients that wanted to lease
 property or identify the for-sale product for clients that wanted to purchase property.

 Over the past several years, major real estate firm have to come to realize the value of their databases and have
 started to sell this information.  For example, Torto Wheaton Research, the research arm of CB/Richard Ellis sells
 on a subscription basis real estate market data.  In some other instances, competitors are joining forces to maintain and share a central commercial database in order to avoid very costly duplicative research efforts. 

Additionally, the CoStar Group has entered the markets of Washington (includes Baltimore), Chicago, NewYork (includes Northern New Jersey, Long Island, Westchester, and Connecticut), Los Angeles (includes Orange County), San Francisco, and Philadelphia to proactively collect listings and develop a database that commercial real estate professionals can share.