Copyright Institute of Real Estate Management Mar/Apr 2002 While slow to adopt new technology applications when compared to other industries, the real estate community has come to recognize that the lifeblood of its technology program is a successful Web site. More than just mere brochure ware, today's commercial real estate Web sites are fast becoming critical marketing and communications tools.
An X-ray of an actual Web site can best demonstrate how a carefully developed Web initiative can generate bottom line results.
Cohen-Esrey Real Estate Services, Inc., (www.cohen esrey.com), a full-service commercial real estate company headquartered in Kansas City, MO with operations in nine Midwestern states, reveals that its anatomy is comprised of the following key elements, all of which are essential to the site's success.
Establish the Vision
The first step in developing a commercial real estate Web site is to establish a vision. Real estate executives need to determine exactly what they want to achieve with Internet applications. For example, Jeanette Leslie, CIO for Cohen-Esrey, has developed a comprehensive technology plan in tandem with her IT department. She obtains input from senior managers of the firm relative to what they want to see in the way of Internet initiatives and other technology. The plan is updated on a quarterly basis and ties into the annual budget.
Make the Commitment
Once a vision is created, then it's critical that the organization make a solid commitment to the plan. This includes the identification of key personnel who will be responsible for ongoing implementation. At CohenEsrey, Leslie serves as the point person for the site and all Internet applications. She has built an IT team that includes a director of technology, a network engineer, a technician, a programmer and a full-time and a part-time Web designer. This team has enabled Cohen-Esrey to be self-sufficient and serve as its own Internet Service Provider (ISP) rather than relying on a third party to host its Web site. The programmer helps to make the site more dynamic through the use of Active Service Pages (ASP). Using Microsoft Access and Microsoft SQL, several databases have been constructed behind the site to work with ASPs to make them even more interactive. This allows a viewer to access searchable data.
In a smaller firm where there is no CIO, someone in authority must be the advocate or the mission will fail. Commitment also means a regular review of technology/Internet objectives and making the necessary adjustment.
Budget Accordingly
Costs to develop and maintain an effective Web site can be significant. Cohen-Esrey invested more than $2 million in technology from 1998 through 2000. Areas where direct costs have been incurred include:
* Hardware ($60,000). The company uses a Pentium 333 dual processor Web server with one gigabyte of RAM; a Cisco AS5300 router; a Pentium 333 single processor firewall with 512 kilobytes of RAM that runs in tandem with Checkpoint 4.1 software; and primary and secondary Linux DNS servers.
* Software ($8,500). Software applications include Microsoft FrontPage, Macromedia DreamWeaver, Adobe PhotoShop, Imageready, PhotoDeluxe, Flash, Microsoft SQL, 
WebTrends and Microsoft Internet Information Server 4.0.
* Student Interns ($15,000). Cohen-Esrey has an extensive intern program for high school and college students. Several of these interns are responsible for identifying and abstracting stories for the Instant News section of the Web site. One intern assists with maintenance of the corporate site and helps design individual property sites.
* Information Technology Department ($20,000). The Information Technology Department spends approximately 6-8 man hours maintaining the Web server and Internet-related applications each week. The Chief Information Officer spends an identical amount of time each week updating and tweaking the corporate Web site.
Provide Meaningful Content
A flashy Web site isn't as important as one that is easy to use and contains compelling and meaningful content. A Web site that is designed with nothing but company promotional materials is unlikely to generate much of a following. The mission of the Cohen-Esrey Web site is to serve as a first step for someone wishing to transact business with the company whether it be a buyer, seller, tenant or building owner.
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| The Web Works: Case-in-point |
| Cohen-Esrey's Internet initiatives contribute positively to the company's bottom line. For example, in 1999, a Denver-based developer interested in leasing a new 90,000 square-foot speculative office building in a Kansas City suburb hired Cohen-Esrey. The company created a Web site for the Timberlands I building, which the broker used extensively in his marketing effort. The site contained floorplans, a locator map, interior and exterior building photographs, demographics, neighborhood and amenities informstion, aerial photographs and a comprehensive building fact sheet. The broker would contact prospective tenants and direct them to the property Web site where he would talk them through different aspects of the building while they could visually follow along. The Web site proved to be a powerful tool in enabling him to complete the leaseup of the building in less than one year at the highest lease rates achieved in the sub-market at the time. |
| Once the lease-up was completed, the developer decided to sell the building in mid-2001. Cohen-Esrey won the assignment in large part because of the Web-based approach that it offered. In the case of the Timberlands, Cohen-Esrey quickly turned the leasing Web site into a selling Web site. The same basic information remained, but a new password-protected section was added. Postcards were mailed to nearly 400 prospective purchasers directing them to the Web site. Once online, the viewer could review the basic information about the property. If interested, an online confidentiality agreement was available for execution and a user identification and password would be e-mailed back to the prospect. The visitor could then access a complete rent roll, copies of tenant leases, financial statements, a survey and other due diligence materials. |
| The Web site was revamped in less than one week after the listing was secured. The property was under contract within 30 days of the listing date and closed in August 2001 at a price of $13.7 million. The end result was that the seller benefitted from receiving its sale proceeds much more quickly than it would have had it pursued the traditional sales approach. |
For example, a New York pension fund advisor can obtain detailed metro information about Kansas City or a number of other cities. A Tokyo-based real estate investor considering a real estate purchase in Kansas City can gather specific data about occupancy, lease rates and other trends. A banker in Los Angeles can use the Instant News section to learn more about plant openings or closings in the Midwest. Visitors can utilize an online calculator that will show the magnitude of various economic development incentives that are available at that location for their specific business.
Promote, Promote, Promote
A corporate Web site (and standalone property Web sites) must be continually promoted. This includes regular search engine registration and adding the Web site address to every piece of literature or marketing materials that the company produces. Cohen-Esrey displays its Web address on signs that it has placed on listings through the Kansas City and Topeka markets. All corporate advertising contains the Web address, as does stationery, business cards, elevator placards and even the auto-signature at the end of employee e-mail messages. The more often the target audience sees a Web address on a repetitive basis, the more likely it is that they will remember the site and visit it at a later date.
Update and Upgrade
The Web site needs to be freshened and updated regularly. There is nothing worse than stale information, and it can be painfully obvious. This harkens back to commitment-- someone must be responsible for making certain that everything on the site is current. Also, it is a good idea to upgrade the site periodically, whether it be a new format, a new navigational system or the addition of significant new features.
Cohen-Esrey updates its 9,000+ page Web site on a daily basis. New sections are added to the site approximately every six months in order to generate repeat visits and extend the length of time a user stays in the site. A separate server regularly backs up the content to ensure continuity in case a catastrophic event were to incapacitate the site.
Periodically, the site is also re-registered with a multitude of search engines in order to increase traffic to the site, It is essential that keywords, meta-tags and page titles are carefully crafted so that search engines can more easily find the site.
Leverage the Knowledge
Building and maintaining a Web site will bring a new level of knowledge and understanding to a commercial real estate company. This knowledge and the supporting infrastructure (at whatever level) can be leveraged to identify new processes, technology applications and mindsets. CohenEsrey uses its knowledge and infrastructure to build stand-alone property Web sites. Further, its experience with the Internet is making possible the implementation of a Web-based data warehousing concept that will help it reduce overhead and serve its clients in a more accurate and timely fashion.
Measure the Results
Above all, a firm must be able to measure results of its Web site. This doesn't just mean tracking activity levels but also how much additional profit a Web initiative is generating for the company. Activity tracking is relatively simple and comes first in the measurement process. However, to understand improved profitability, one must tirelessly monitor the organization day after day. Brokers may not initially be inclined to identify a Web site as the source of a transaction. But if they are asked often enough they will eventually become more focused in this respect. Internal reporting formats must be altered to include reference to the Internet and the company's Web site.
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| Web Site Generates Bottom Line Business |
| Lease and Sale Transactions |
| The Cohen-Esrey Web site stimulates approximately 10 percent to 15 percent of all closed leases and sales according to completed transaction records. Some examples include: |
| * Shopping center sale, 121,400 square feet, valued at $3.2 million. |
| * Shopping center sale, 88,586 square feet, valued at $3.2 million. |
| * Shopping center sale, 71,000 square feet, valued at $781,000: |
| * Office building lease, 3,000 square feet. |
| * Apartment management assignments, 188 units. |
| * Total business generated through Web site-$25 million. |
| Property Inquiries |
| Cohen-Esrey brokers receive approximately five to ten inquiries every day from prospective buyers and tenants. Two to four of these inquiries are sent via e-mail and the rest in the form of telephone calls. |
| Apartment Rentals |
| Approximately 25 apartments are rented each month as a result of Web-generated interest on the part of prospective residents. |
Profitability measures go beyond simply matching a lease or a sale to the Internet as a source. Cost savings through improved process and information delivery can add significantly to the bottom line. Though CohenEsrey has spent hundreds of thousands of dollars on its Web site, the profitability that has been realized is far greater. This has come in the way of leasing and brokerage commissions, property management fees and expenditure reductions. The intangible factor that cannot be measured is how much business the firm procures as a result of increased name recognition and enhanced reputation that was initiated or augmented by its Web site.
Cohen-Esrey is expanding its Internet experience into its Financial Services Department with the implementation of a new Web-based financial reporting module. Employees in remote locations and clients across the country and around the globe will be able to access Cohen-Esrey's data warehouse 24 hours a day, 365 days a year.
With proper password authorization they will be able to access real time data for monthly rent collections, accounts payable, monthly financial reports and even view scanned images of leases, contracts and all invoices paid by the company. Productivity gains are projected to save Cohen-Esrey thousands of dollars a year through a decrease in the number of telephone inquiries from staff and clients; in reduced paper, printing and postage costs as well as long-distance charges.
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| The Heart of a Web Site: Content Counts |
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| Make no mistake about it, beneath the heart of every successful Web site today lies layer upon layer of meaningful content. It is what attracts visitors to the site initially and is why they keep coming back. Cohen-Esrey's site (www.cohenes rey.com) offers its visitors a variety of content. It is comprehensive in nature and includes the following: |
| [Sidebar] |
| * Corporate Information |
| * Company Services |
| * Affiliated Companies |
| * Map to Corporate Office |
| * Corporate Roster |
| * Searchable Commercial Property Database |
| * Apartments for Rent |
| * Individual Property Web Sites |
| * Vendor Requests for Proposal |
| * Career Opportunities |
| [Sidebar] |
| * Colleges and Universities |
| * Market Information |
| * Metro Facts |
| * Instant News |
| * Industry Issues |
| * Electronic Newsletters |
| * On-Line Service Request Forms |
| * What's New |
| * Feedback Forms |
| * Search Our Site |
| [Author Affiliation] |
| R. Lee Harris, CPM(R), CRE(R), is the President and Chief Operating Officer of Cohen-Esrey Real Estate Services, Inc. Harris can be reached at Iharris@ cohenesrey.com, or (816) 360-1332. |
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