Looking Ahead -- Three Important Trends for 2000

Clicks and Mortar... I believe that David Pottruck, co-CEO of Schwab, coined this phrase in a speech in July 1999. Since then it has spread like wild fire because it so accurately reflects the strategy of combining "the power of the Internet with the ability to operate effectively in the offline world." So in 1999 we saw the rise of sites like GMBuyPower.com, Macys.com and OfficeDepot.com. And on Jan 1, 2000, Wal-Mart launched its new mega site, featuring tens of thousands of store items, online, travel services, online digital photos, a gift registry -- the whole enchilada. Meanwhile, dot-com companies like Amazon.com, eToys.com and Webvan.com are leasing millions of square feet of warehouse distribution space.

New Services... Although the big fish will get bigger (see paragraph below), there will be dozens, or even hundreds, of new real estate information services focused on narrower markets, as the Internet embeds itself in the fabric of transactions and management. Here are a dozen to keep your eyes on:

BroadBandOffice.net ... High speed access and e-commerce.
CityFeet.com ... Listing service for space under 10,000 sf.
Comro.com ... Online marketing service for commercial properties.
eProperty.com ... Commercial property auctions.
EquityCity.com ... Equity for development projects.
i-scraper.com ... Web-based project management.
LipseyTV.com ... Online, real-time training.
NAIdirect.com ... Transaction and project management services.
Redbricks.com ... Online financing and transaction management.
SiteStuff.com ... Online marketplace for property owners and managers.
StoreTrax.com ... Retail space listing service.
Viador.com ... Develops e-business portals for customer relations.

Access to Capital... Look for even more fundings in 2000. Clearly, 1999 saw commercial real estate information providers appear on the radar screen of the capital markets. In May, COMPS.COM conducted its Initial Public Offering, raising $62.2 million at a share price close to $15. In May, the CoStar Group conducted a secondary offering raising $97.4 million. Then in November, the CoStar Group reached an agreement to acquire COMPS.COM for $102 million, based upon a COMPS.COM share price of $7.50. In November, PropertyFirst.com announced the close of a $44.3 million round of private financing. Finally in December, LoopNet announced that it had closed a $20 million round of mezzanine financing. ... Wow, that's a total of almost $225 million in cash raised in 1999. Welcome to the Internet Age.

PikeNet 2000. ... The three CEOs that raised all that money -- Dennis DeAndre of LoopNet, Andy Florance of the CoStar Group and John Stanfill of PropertyFirst.com -- will participate in a roundtable discussion, "The Future of Internet Listing Services," at PikeNet 2000, Apr 5-7, 2000, in San Francisco. Click the link at the top of the PikeNet home page or go to www.pikenet.com/pikenet2000. Register before January 5 for the early-bird rate.

-- Peter Pike ppike@pikenet.com