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The Irony of Silicon Valley

January 29, 2010

This is a post I’ve been wanting to write for a while, but until now I was not sure how or what to write exactly. It’s a bit long, but I think it is important.

Silicon Valley is the center of innovation and home to giants of industry. It’s the place companies like Cisco, Google, Facebook, Apple, and HP call home. These local companies and thousands more have helped build and shape the internet and so many other technologies which now play an important role in our daily lives.

When it comes to technology, it’s therefore pretty ironic that cell coverage is still spotty in many local areas, and Verizon’s FIOS service is still not available here. After all, there is a very good chance that Silicon Valley companies have played a role in the development of both of these technologies.

Commercial real estate brokerage in Silicon Valley really is not much different. Take Cornish & Carey commercial for example. You have a commercial brokerage set smack dab in the middle of a region which has brought you some of the biggest names in social media: Facebook, LinkedIn, Twitter, and Google. Yet you have a company that is ironically against what many of these firms embrace: social media, transparency, and open data sharing. Heck, C&C even represents Facebook and LinkedIn!

But while the rest of the world has been evolving and becoming more transparent, Cornish & Carey has decided to take a step backwards. Several months ago, the firm¬†apparently¬†made a decision to limit the amount of data that they made readily available to the public and other brokers. Whereas before you could search their listings on their site and get asking rates and available square footage, they have now replaced all that data for their lease listings with the ever useful “Contact Agent”.

I’m not quite sure I understand the reasoning behind this so let’s think about how this affects the different stakeholders:

  • The Tenant Rep Broker: This extra step of having to call or email the broker to find out what the asking rate is makes my life more difficult. Simple as that. I suppose it’s not a whole lot of work to call or email the broker, but often times the response is slow and occasionally doesn’t even come at all. That’s just the nature of it. I could also look at their exclusive listings file they send out monthly, but again, why put up a roadblock or assume everybody has that document. At a time when vacancy is through the roof and there is plenty of property available to satisfy most requirements, it seems counterintuitive to make it difficult for brokers to get the information they need. If I can’t get the data quickly, I’ll just leave the listing off the market survey. I don’t have time to wait to find out what an asking rate is.
  • The Tenant: It makes the tenant’s life more difficult. It puts up a roadblock to them calling and asking what the rent is. Again, it may not seem like a lot of work for the tenant to call, but it’s a roadblock in that they might not want to deal with the hassle of talking to a broker just to find out what the rental rate is.
  • Cornish & Carey: I’m speculating here, but my guess is they’ve decided to replace their rent and square footage data with “Contact Agent” to get more calls, and perhaps use it as a means to drum up some business for themselves. They might spin it as them trying to find out who has interest and follow up with them, or make sure people aren’t turned off by asking rents, but in reality I think it’s designed to limit the flow of information to the outside world, and help them get more tenant business.
  • The Landlord: Ah, the one that really matters. This is the one to whom Cornish & Carey owes their fiduciary responsibility. Were I landlord who had given a listing to Cornish & Carey, I would be very upset by this practice. Dare I say it, but I personally would go so far as to fire them. Here’s why: First of all, virtually every single one of their For Lease listings in this region says “Contact Agent”. Now I find it hard to believe that every landlord agreed to this, therefore it was a unilateral decision that was made without bothering to ask the landlords what they thought about it. I know because I’ve talked to several of them. At the very least I know any landlord that has cheap space would want to make sure that the rent was advertised. Secondly, as I indicated above, this policy of not publishing rental rate data may lead other brokers to not show my building. The more you show a space, the more likely it is to get leased. Why would you want to give other the brokers a reason not to include your building on a property survey or market tour?

This is a company who calls themselves the “Dominant real estate force in Northern California” and whose Mission and Value statement emphasizes things such as “C&C’s focus is our clients”.

Like I indicated above, I’m speculating as to why exactly they are doing this, but from what I can tell, the focus of the policy is misplaced – at least when you run through the logic. Who knows, maybe I’m just not seeing it.

But regardless, this is a bigger issue really than just Cornish & Carey. Fortunately the other local firms have not embraced the same practice. Overall however, commercial real estate brokerage in Silicon Valley, despite it being in the middle of the region that is driving social media and the way people and companies communicate, is either standing still or in some cases as noted above headed in the opposite direction. We’re seeing signs that the CRE industry is opening up, but to actually see some firms regressing is pretty ironic when you consider where they are doing business.

For their sake, I hope they come to their senses before their landlord and tenant clients opt to go with a more progressive firm.

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Comments
Cap Rate January 29, 2010


Interesting take. One consideration I can see from the landlord side: if you have cut your rates fairly dramatcially, but you are still trying to retain tenants in the project that are paying above that rate (market) – it could make your renewal process very difficult. That being said, that tenant should know what market is (by engaging a broker or doing a little homework) but you might be surprised how often that is not the case. Although that uninformed tenant group usually doesn't include the large companies you have sited here.

Full Service Broker January 29, 2010


Preach on, brudda!!!

joshua January 30, 2010


im not advocating wat theyre doing. but the benefits would be to increase traffic to their brokers (for a number of reasons, but mainly so the broker can sell the deal and provide alternatives), to get better contacts (the callers actually want to know) and to stop exposing the level of need at individual properties. i see some emails come across with asking rates that obviously show distress or bullshit intro rates. that being said, the wholesale change of all flyers is lame. with the amount of publicly available data instances of that should only be for special instances. its kind of like the companies that provide incorrect data to costar. you already have to double check all their data to make sure its reliable (after they "verify" it). its bullshit. making data available to others is of the most importance because you need them to share their data. its not like were handing out phone #s and emails to principals. just be honest about the deal.

squarefeet January 30, 2010


I’m not disagreeing with you, there are probably benefits to what they are doing. My issue is that a) the benefit is to Cornish & Carey, not the Landlord to whom they owe a fiduciary responsibility, and b) it’s just a regressive business practice. The question is what is this protectionism stemming from? Are they being hurt by the increasing public availability of data? If so, then unless everybody takes their data into hiding, and goes back to announcing everything by fax, this policy ends up defeating itself.

If people think that commercial brokerage is immune from some of the same forces that have changed the residential landscape, they are in denial. The pace of change is slower but it doesn’t mean change is not happening to the business landscape. It’s all about adding value, and any fat will be cut off by the market over the long term.

notmyrealname January 30, 2010


this is the same company that protects all their PDF files. Everybody has the $20 piece of software that can circumvent this so every time i want to combine a bunch of PDF files I have to spend 2 minutes to open up another piece of software and remove the useless protection C&C slaps onto their PDF files.

Little things like this tell a person a lot about a company.


John Yandle January 30, 2010


Part 1 of 2
I saw this blog Friday morning and got a good chuckle from it. It's not often your company is mentioned in the same paragraph as spotty cell phone coverage. The blog, unfortunately, went down hill from there. Most of the rest of the text was completely inaccurate…..I guess that's the beauty of the internet….you don't have a publisher checking the article for facts. Freedom of speech is a great right, the right to gossip inaccuracies without even identifying yourself, is not……..sorry for being so transparent. My response will come in a couple of following responses.
My name is John Yandle. I'm a manager/agent in the Santa Clara office of Cornish and Carey. I'm a Stanford graduate with a degree in Economics. I have been in the business for 25 years and with Cornish and Carey for 7 of those years. My phone number is 408 987 4154. I mention all this only because the credibility and identity of any "author" is important in determining the validity and accuracy of what's written. It becomes more important when the article is nagative and there is a chance people may actually believe it.

See Part 2 of 2 for the facts

mfong January 31, 2010


the data is either there or it's not. it's pretty simple.

yabadabadoo January 31, 2010


John….meet the internet!

Square Feet January 31, 2010


Hi John….still waiting for Part 2, but nowhere in the article did I indicate Cornish & Carey was not an established organization or that it didn't have some of the most seasoned brokers in the valley. I made it pretty clear that I don't know the exact reason why your firm is doing this and that I was speculating. I did this on two different instances in the post.

I look forward to hearing why the data has been replaced with "Contact Agent". I know I'm not the only one.

Sandy R January 31, 2010


This is clearly a blog, not the Wall Street Journal. See the wikipedia entry for a definition of a blog: http://en.wikipedia.org/wiki/Blog

John Yandle February 1, 2010


Eric
Thanks for posting the first part of my "blog" ….and yes, I do know the Wikipedia definition of a blog….but got a little carried away. With that said, I'm going to go with the rest of my lengthy explanation and will cut it down.

John Yandle February 1, 2010


.Cornish and Carey has its own data base of property information, not a 3rd party software program. We share all of our listing (Landlord) information with every other brokerage company. We send out our listings individually through e-mails daily, and through a data exchange system I helped develop 8 years ago along with the Association of Silicon Valley Brokers. We are full disclosure, accurate, and yes, we discuss our business through social media channels as well as socially with our clients. We are open book, communicative, and in many cases, interesting. We further list all of our properties on our website which is primarily used by Tenants outside of the area who are not already working with a real estate agent, or by those few local brokers who do not have a data base. (see last and final Part 3 of 3

John Yandle February 1, 2010


This is the only part of your article that is accurate. Yes, we absolutely would like to talk with these people to help educate them on pricing that fluctuates daily. We also want to be able to discuss other spaces potentially coming up in the buildings in the future. We want to talk to them about the other building and area amenities that are hard to convey in electronic format. We want to find out their needs regarding tenant improvements, discuss with them their current financial position, which also may affect pricing. I admit……….it would be much easier to put a bar code on our flyers, and call it a day, but it's not like a supermarket……and we found out it didn't work. This is a marketing concept called qualifying. This is part of our business, and Cornish and Carey does it well, and our clients understand, and agree with our approach.

joshua February 2, 2010


John, do not mistake this for rudeness. i get why youre doing it. but talking down to a bunch of brokers and possible clients via a blog comment is silly ("its called qualifying" – thanks for the education). I dont think anyone here called out C&C for being underhanded. they simply said they dont appreciate the "call broker" non-sense. you see, as a broker, you know full well that when you call in and say youre a broker you get a line of bullshit. thats why when you qualify me i give you a made up load of shit about my business and when im leasing. so i can pull the best info out of your agents. its a waste of my time to do that. its a waste of you/your agents time. no one is saying you shouldnt qualify leads or that your solution isnt effective for qualification purposes. what were saying is that a wholesale change of marketing pricing info and having to call an agent to try to get them to give us 2.5 minutes of their time to feed us a bullshit line about the property with #'s that are different from what a principal gets is lame. that said, that is why we like having prices clearly advertised. so, thanks for the info, im not suggesting your firm does these things consistently, but hopefully you can see the other side as well.

JoeShmoe Broker February 2, 2010


I think I'm going to puke. Haven't heard that much crap since I called the Cornish office today to get some basic info from a broker (I had no choice but to CALL!!!)…and guess what, I didn't get that call back (even though I left a vm), and had to call back 2 more times to get a response. Real efficient. And no surprise there. And yes, I easily heard a load of BS, while it took more effort to find out the OpEx's on a certain project.

"We are full disclosure, accurate, and yes, we discuss our business through social media channels as well as socially with our clients. We are open book, communicative, and in many cases, interesting."

What social media channels?? I'm not aware of them. Facebook? NO. Twitter? NO. SquareFeetBlog??…now there you go–you're learning!!! Keep it up. Maybe you can try email soon!!


JoeShmoe Broker February 2, 2010


Part 2:

As for being open book, communicative and interesting??? Open book would be good if that was true. Communicative–true, assuming a broker actually picks up the phone or returns a call/voicemail. Interesting???….um….what makes you so special??? Oh wait, you must've hired another jock in the office. Hire that man!!! He's a "people person"!!! (that "interesting" comment made me laugh…couldn't believe my eyes)

And here's the big point in which I completely disagree with: Tenants are the not majority of users on your website. Brokers are. And in order to gather accurate information, going to the source's site to obtain this info is much better than going to outdated databases such as CoStar, LoopNet, etc. So if that is now taken away, it wastes time and discourages brokers from calling other brokers per the BS that Joshua alluded to below.


JoeShmoe Broker February 2, 2010


Part 3:
As for posting the pricing and saying it didn't work…….last time I checked, C&C has dominated the Valley for many, many years. So just how hasn't been working??? Is it because firms like JLL are handing it to Cornish in the marketplace and therefore, Cornish refuses to post basic market info to slow down the competition??? It won't work and it's a waste of everyone's time. You're just deterring brokers from doing their job by putting up another roadblock. More activity, regardless of brokerage house, helps ALL. And if I was your client (a Landlord)….I would be pissed!!! Don't be surprised if Cornish starts losing marketshare in its agency biz if this keeps up. I know of at least a couple LL's that recently heard of this and are very upset. Ha…good luck.


JoeShmoe Broker February 2, 2010


Part 4:
Take this as advice rather than a gang-tackle, John….CHANGE IT and go back to the way it was and the way every other house operates their site. They know that brokers are the majority of end-users (FYI, that refers to someone like me going on your website), and post prices and availability for a reason. In fact, I'm willing to bet most of your own brokers find this a pain in the ass and are behind in returning calls (per my experience today!!!).

Square Feet February 2, 2010


John, I appreciate your comments. Here's mine:

Databases are only as good as the people who maintain them and the frequency with which it is done. Sadly, in commercial real estate information is not as real-time as it should be. Cornish agents have called me about my listings in the past for the purpose of updating your database. But those calls came once every 2 months.

As I'm sure you've noticed, things happen and change more often than every 2 months, so having a database is great, unless it's updated once every 2 months. I'm not doubting that it's hard and tedious work to keep an up-to-date database, and that it is an ongoing effort, but I personally think the industry should and could do a lot better. As an example, I recently got contacted by a Cornish agent about a listing I had that I leased 4 months ago. If his data came from your database, then I'm not sure what that says about it.

I hope this explains why I believe making real-time data available on your website is crucial, regardless of whether somebody has CoStar, Loopnet, their own database, or just prints and keeps on their desk a list of the monthly exclusive listing reports that are generated by the brokerage houses. To assume that your website is only used by those few local brokers I think is a mistake. Every broker with a tenant requirement matters, particularly in this market!

This is a discussion that I think needs to be had amongst ASVB and commercial brokerages everywhere. The intention of this post was to elicit discussion, comments, and perhaps even get Cornish to reverse its practice of hiding the data on its website.

Given everything which has happened with the internet in the past 24 months alone, using and relying on some system developed 8 years ago I think says more about the industry and way things are done than I could say even if I rambled on for another 5000 words.

mfong February 2, 2010


wow, I was hoping that you had a better explanation that what you just indicated.

also love the comment "we discuss our business through social media channels as well as socially with our clients. "

You talk socially with your clients? Funniest thing I've heard today. You really have no idea what you are talking about, do you?

John Yandle February 4, 2010


There may be 2 sides, but the one point I will disagree with is agents ever giving you information that differs from what we give clients. If that ever happens, or they won't give you the 2.5 minutes of time you say you are not getting, please give me a call. I don't usually get that complaint, and those issues would go to me. I will also send you all of our listings if you give me your information as we do every other brokerage house. Most of our deals are co brokered and we freely send our information out to all agents. It does get tricky for those who don't have a data base. I'd be happy to see what we can do to help you out.

John Yandle February 4, 2010


Dear Joe
Hope you're feeling better. I'm starting to feel like Dear Abby here but if you can be more specific on names, I will address it……..any media is fine.

John Yandle February 4, 2010


Well written.
This discussion is ongoing with the ASVB. I sit on the Board. The data exchange works great for 90% of the brokers out there…..even after 8 years. I agree with you, it doesn't work great for the independent brokers or those without their own data bases. I've always been with larger brokerage companies so I admit, I may be a disconnected. I assume you have to call look up all the different brokerage companies and independent brokers who may potentially have a listing about the size of your tenants needs to put together your tour. Give me a call and let's see how we make it better for you.

Square Feet February 4, 2010


Two points. First one being that you made my point for me and that is that I don't need to call up all the different brokerage companies — just Cornish & Carey. Virtually everybody else makes all their data available so I can quickly go on their website to cross reference any listings to make sure I have the updated rental rates and availability. This not only saves their brokers' time and lets them focus on real deals, but it saves me time and gives the other brokerage's properties a better chance of making it onto my survey or tour.

The second point is in regards to the data exchange you mention. The complaint I have about the data is shared by brokers at the biggest firms that are out there (they too use your website search). That is what prompted me to actually write a blog post about it. I admittedly don't know all the details about the data exchange, but if people at some big shops are complaining, then either they don't know about the data exchange or it's not working.

John, this really isn't about making it better for the "other 10%". It's about making brokerage better, period.

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