Hartung Sees a Green Future

Wall Street Likes Real Estate Dot-coms... About a year ago, I began to get calls from investment bankers and securities analysts seeking my opinions about real estate dot-com players. Cool. Aside from Wall Street's romance with REITs, I'd never heard of much interest in the real estate sector. Hey, maybe real estate dot-coms would become the next Big Thing. (Perhaps not coincidentally this interest first blossomed as CoStar's stock rocketed above its offering price.)

One of those calls was from Chris Hartung, a securities analyst with Banc America Securities in San Francisco, and it led to a long lunch where we covered a wide range of real estate e-commerce issues. Having been in the real estate industry for 25 years, it was fun to talk with an outsider who brought a fresh perspective. For me, the complexity of the real estate industry provides huge opportunities for existing players to reinvent themselves. For Hartung, it provides huge opportunities for new players to create different value chains and possibly disintermediate traditional players.

Now you can read Hartung's vision yourself in his March report, "E-commercial Real Estate's Untapped Land of Opportunity: A Consilience of Real Estate Internet Theories." Wow, that's a mouthful. Here are a few quotes, "We believe the combination of e-commerce applications and the value inherent in reintermediation control could add 15-20% to the value of commercial real estate in the United States with the value creation occurring disproportionately to the multifamily and office sectors." ... "Using the quick application of e-commerce to other industries as well as a fast and furious pace of IPOs (and the subsquent price increase) [Remember, this was March], we would not be surprised if the market capitalization of e-real estate companies increases seven-fold by 2002 and exceeds $100 billion." ... Yep, that's a big opportunity.

--Peter