Where can you find out about commercial real estate for sale or lease? I hear that question all the time. Never from anyone in the real estate industry, mind you, but from casual neighborhood observers or curious business owners. If you ask Google (or Bing if you work for Microsoft) it will tell you: LoopNet.
The problem is that only some of the listings are available to non-subscribers. You can pay for the upgrade to a “premium searcher” to see the full list of listings. Otherwise, you can only see the list of properties from paid “premium listers.” This is LoopNet’s business model and so far it worked well, thanks in part to the listings it gets from its research counterpart CoStar.
The CoStar Group has been able to be the main listing site for commercial properties by giving some of the listings away for free. But what if another site came along and decided to make all of the listings free of charge, making everyone a “premium user?”
That is exactly what the startup Biproxi wants to do. They have recently launched their listing and transaction platform that is free to use. One of the company’s co-founders, Gordon Smith told me about this decision, “When we started going about creating an end-to-end ecosystem that can benefit the entire industry, we realized that a key part of collecting the greatest number of listings would be to make that portion of the site entirely free.”
While Biproxi aims to be an end-to-end marketplace, the comparison between Biproxi’s listings service and LoopNet is really apples to apples. Biproxi gives users dashboards and analytics to help with their listings or searches. It also has the ability to submit and receive letters of intent for potential properties. The company’s revenue comes from a marketing service product that actively connects buyer and sellers and the charge for this service comes only after the deal has closed.
A free marketplace brings the most benefit to buyers and sellers that are not full-time commercial real estate professionals. The Biproxi team has seen adoption of their platform by what they like to call “resi-mercial” brokers or residential brokers who occasionally do commercial deals. Smith said, “We offer a particularly strong value proposition to the resi-mercial brokers, who are not as firmly entrenched in the commercial real estate world. Biproxi gives them immediate access to a greater number of buyers, sellers, brokers and tenants and helps them supercharge their marketing.”
One of Biproxi’s largest partners is the National Association of Realtors or NAR the trade association of real estate agents and brokers with around 1.3 million members. Now a NAR membership will come with special discount to Biproxi’s services. Smith told me, “NAR is a very enthusiastic partner of ours, and they will be promoting the platform at their national convention in Boston next month, as well as on their website and in their publications. We will also be offering their members attractive discounts on Biproxi Marketing Services and our other premium services like professional photography.”
Biproxi is focusing on “middle-market” commercial properties. They define this as sales transactions under $25 million and leases under 50,000 square feet. They see this as a large yet underserved market and hope to become the go-to portal for these types of listings. When I ask Smith about how he saw the future of the commercial real estate digital marketplace ecosystem, he had a bright vision for his company’s position in it, “Right now, the environment is fragmented. There is a wide range of listing sites, but very few platforms are able to offer a complete end-to-end solution from listing to closing. Although the market opportunity is large, from a user’s perspective, there is a real benefit to having one go-to platform instead of multiple sites. We are obviously new to the market, but our founding team has a lot of experience in this space, and we’re already seeing enthusiasm from the industry. There are no guarantees, but based on our broad network of industry partnerships, deep technology team and extensive industry experience, we think that we are poised to gain market share very quickly.”
Only time will tell if creating a free listing platform will help Biproxi become one of if not the go-to place for people to search for commercial real estate. There is evidence that this strategy works, though. In the U.K. a company called Realla had a very similar approach, giving away the marketplace and charging for advanced marketing tools. They were recently acquired by, who else but,In o The CoStar Group. While a CoStar acquisition is likely not on the minds of Smith and his co-founders they no doubt noted how Realla was able to grow in a short amount of time by offering free listing and searching. I guess it turns out that, even in the cut-throat world of real estate technology, sometimes you have to give to get.