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NAR Jumps Into The Commercial Fray

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This is big news that portends intensely amusing times ahead:

A National Association of Realtors tech incubator company has acquired a commercial real estate data exchange company and plans to use its technology to launch a national commercial real estate listing and transaction platform in May.

Second Century Ventures LLC, a private equity fund established by the Realtors trade group supported by a membership dues increase this year, acquired Gig Harbor, Wash.-based ePropertyData.

EPropertyData operates CommercialMLS.com for the 4,500-member Commercial Brokers Association in Seattle and CommercialGateway.com for the 2,000-member commercial division of the Houston Association of Realtors.

Gaylord said the platform will offer NAR’s commercial members “national exposure for all their sale and lease listings” and serve as a resource for national property searches.

Meanwhile, an advisory group formed by NAR leaders is studying the feasibility of creating a massive property information database, dubbed the “Gateway” — featuring detailed information for all types of properties — that could be governed by brokers, owned by NAR and accessible to varying degrees by consumers, real estate professionals and others.

Oh. Wow.

I don’t know how to feel.

On the one hand, anything that could get the Galactic Empire and the Keystone Kops to focus on serving their customers instead of suing each other is a real positive. On the other hand, is NAR the organization to challenge either behemoth — nevermind both of them — in the extraordinarily tricky commercial real estate space?

Even if NAR is the right group to bring reform to CRE, is ePropertyData the vehicle to use?

I mean… look at this:

The value of the ePropertyData acquisition was not disclosed. According to B121.com, a business information Web site, ePropertyData has fewer than five employees and annual sales of $500,000 to $1 million.

Um, okay…. I know a deli in my town that has more employees and has more sales.

In comparison (well, more contrast), CoStar’s market cap is $774M, and in 2007, it did $192.8M in revenues. Loopnet’s market cap is $435.7M and its 2007 revenues were $70.7M.

NAR really ought to have thought this one through more, methinks. All that CoStar needs to do here to crush this nascent problem is to go to the five guys who work at ePropertyData and offer them $150K a year jobs working at CoStar. They’d be fools to turn that down. And that’s if CoStar were even remotely worried about ePropertyData instead of more pressing problems, like whether to have the corporate retreat in Las Vegas or in Orlando.

Here’s a tip for NAR: if you were going to buy any small company that has a reasonable shot at competing with the Two Big Boys, you should have bought Catylist. At least Catylist has experience working with some major institutions that are respected in the CRE space, like CCIM. And Dustin Gellman at Catylist is one of the really smart guys in CRE who really gets the web.

But really… you’re the frikkin National Association of Realtors, with a technological marvel of a building that looks like this in Washington DC:

You couldn’t get Google or Microsoft to talk to you about doing something in commercial real estate?

And yet… I can’t help but cheer the efforts of NAR. The online commercial real estate space is desperately in need of an alternative to the really-smart-but-evil guys on the one hand and the bumbling-simpletons on the other hand.

I look forward to seeing the reaction of the commercial real estate industry, as well as CoStar and Loopnet and Xceligent and everyone else in that business.

-rsh

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Rob Hahn
Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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