RealCentric Seeks Sharp Reductions in Leasing Process

Interview... Jim Stuart is the CEO of RealCentric.com, headquartered in Los Gatos, CA, and Las Vegas, NV. RealCentric, which aims "to simplify and dramatically reduce the time involved in finding, leasing and outfitting office space," launched its service on June 19, 2000. Stuart responded to three e-mailed questions on June 17, 2000.

Pike: What is your business model and how will it generate revenue?

Stuart: It starts with a simple principle: tenant needs are paramount. RealCentric has optimized the process of finding, leasing and outfitting space, to serve the needs of tenants. That means that when there is a choice about what to do, we always strive to optimize tenant needs first. Our mission is to get tenant businesses up and running as quickly as possible, with as little pain as possible. Ironically, we take no money from tenants. Our revenue comes in several ways, including marketing fees from property suppliers (note: not commissions); alliance agreements with best of class service providers such as architects, contractors and law firms; and finally, national business relationships with world class product companies such as Steelcase, OfficeMax, Microsoft, American Express, Nortel, etc. In the end, we will only make money by creating value for customers by bringing them a more efficient process with better decisions.

Pike: How do you gather information on space available?

Stuart: RealCentric, through its professional sales team, is dedicated to building tight relationships with the top building owners and brokers in every market. Every member of the sales team brings a deep understanding of local markets. This group includes professionals from the best commercial real estate companies in the world, companies like Insignia/ESG, Colliers International, Grubb & Ellis, CB Richard Ellis, Binswanger, Trammel Crow, and others. Our sales team has contracted with most, if not all, of the major landlords in our launch markets to supply inventory and to maintain their data. We also have been very successful in getting the support of the major brokerage firms that are anxious to bring velocity to the leasing process.

Pike: Do you expect most transactions to involve brokers?

Stuart: Yes. However, some businesses will feel comfortable completing the leasing transaction directly with landlords as is the case today. Others will desire the assistance of a broker. Our goal is simply to provide all the information and resources necessary to the tenant to complete the lease transaction as fast as possible. Keep in mind, we are here to serve the tenant. They will choose whom to bring into the transaction, not us. The "one size fits all" approach associated with commissions will not work in the future. Customers require choice and are the only group that will decide when a broker's value best intersects their needs. The skilled broker that brings value to customers will have a bigger role in the future, serving more customers and creating more obvious value. Generally, I predict two macro impacts of online tools on the brokerage industry: brokers will continue to become more specialized experts and customer service expectations will rise.

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--Peter