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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- YoY Local Transaction Volumes
- GVA Kidder Mathews Acquires Wayne Mascia Associates
- Sobrato Nabs McAfee for 240K SF and What It Means For The Market